U.S. Department of Labor Investigations Help Retirement Plans Recover Nearly $16 Million After Losses from Fraudulent Loans

Today’s post was shared by US Dept. of Labor and comes from www.dol.gov

CHICAGO, IL – The U.S. Department of Labor has entered into a settlement agreement with U.S. Fiduciary Services and three of its subsidiaries that provides for payment of more than $7 million to 42 retirement plans that suffered losses as a result of investments in fictitious loans made by Florida-based First Farmers Financial LLC (FFF).

The agreement and anticipated future payments from a pending Receivership Estate case involving FFF are expected to compensate the retirement plans fully for approximately $16 million in losses.

FFF created the fictitious loans and forged documents stating that the loans were guaranteed by the U.S. Department of Agriculture. Forty-two retirement plans invested in a fund exposed to the fraudulent FFF loans through subsidiaries of U.S. Fiduciary Services.

EBSA’s Chicago and Atlanta regional offices conducted investigations of the subsidiaries – Salem Trust Company, Pennant Management Inc., and GreatBanc Trust Company – for potential violations of the Employee Retirement Income Security Act of 1974 (ERISA) in connection with the plans’ investments in a fund exposed to the fictitious FFF loans.

After its investigations, the Department entered into the settlement agreement with U.S. Fiduciary Services and the three subsidiaries, resolving its claims of ERISA violations. Representatives of the ERISA-covered retirement plans that are due to receive settlement proceeds were also parties to the settlement agreement….

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