More On Legal & Compliancefrom The Advisor's Professional Library
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- RIAs and Customer Identification Just as RIAs owe a duty to diligently protect their clients privacy and guard against theft, firms also play a vital role in customer identification. Although RIAs are not subject to an anti-money laundering rule, securities regulators expect advisors to address these issues in their policies and procedures.
Matthew D. Hutcheson, an Idaho-based trustee and fiduciary for a number of employer pension plans, was sentenced on Thursday to a jail term of 17 ½ years and ordered to pay his victims $5.3 million in restitution.
A federal jury in Boise on April 16 had convicted Hutcheson, 41, of Eagle, of 17 counts of wire fraud, according to the FBI’s Salt Lake City Division. During the eight-day trial, the government presented evidence that beginning in 2010, Hutcheson perpetrated schemes to defraud the Tamarack Resort in Donnelly, Idaho, on behalf of a limited liability corporation he controlled, called Green Valley Holdings LLC.
The FBI arrested Hutcheson at his home on April 11, 2012.
The indictment states that Hutcheson was a trustee and fiduciary for the G Fiduciary Retirement Income Security Plan, National Retirement Security Plan 401(k) and the Retirement Security Plan and Trust. It accused him of perpetrating schemes to defraud the plans and misappropriate more than $5 million of plan assets.
According to the indictment, from January 2010 through December 2010, Hutcheson misappropriated approximately $2 million of G Fiduciary assets for his personal use. On 12 occasions, it alleged, Hutcheson directed the plan's record keeper to make wire transfers of plan assets from an account at Charles Schwab to bank accounts controlled by Hutcheson and to other bank accounts for his personal benefit.
“Pension plan fraud represents not only a violation of the law but a betrayal of trust,” said Phyllis Borzi, assistant secretary of labor for the Employee Benefits Security Administration, in a statement at the time of the indictment. “Those who provide services for workers saving for retirement must serve the best interests of those workers. The Department of Labor will continue to pursue all possible avenues to root out fraud in employee benefits management.”
The indictment alleged that Hutcheson used these assets to renovate his home, to repay personal loans, to purchase luxury automobiles, motorcycles and all-terrain vehicles and for other personal expenses. When plan record keepers and others requested information about the location and status of the plan assets, Hutcheson misrepresented that they were safely invested.
Hutcheson was also accused of misappropriating about $3 million of Retirement Security Plan and Trust assets to pursue the purchase of the Tamarack Resort.
Read more details about the Hutcheson case at ThinkAdvisor.