Deals & People June 18, 2010

Adviser Who Misused Pension Funds Sentenced to Nine Years

John Orecchio, a former investment adviser accused of misusing funds from six union pension plans, was sentenced to nine years and four months in prison and ordered to pay $26.4 million in restitution.
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The DoL filed a lawsuit on April 10, 2008 against AA Capital Partners, its co-owner and president Orecchio, chief financial officer Mary Elizabeth Stevens, and affiliate AA Capital Liquidity Management, LLC for allegedly misusing plan assets and charging the plans excessive fees on investments.   The suit claims that at various times from 2002 to 2006, the defendants improperly used $25.9 million of the plans’ assets to pay for, among other things, the operating expenses of the firm, renovations to a horse farm, and a strip club owned by Orecchio.     

In addition, the DoL said they caused the plans to pay unauthorized fees to AA Capital.  

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In August 2009, the U.S. Department of Labor obtained a consent judgment and order requiring Orecchio to restore $50 million in losses to five Michigan pension funds as restitution for misuse of the plans’ assets (see Former AA Capital Partners President to Pay $50M to Pension Funds).  

In 2006, the Securities and Exchange Commission filed a complaint against AA Capital Partners Inc. and Orecchio, accusing him of misspending $10.7 million of investments by Detroit area pension funds, on things such as political donations and sporting events.
Deals & People June 18, 2010

SevenHills Benefit Partners Joins United Benefit Advisors

SevenHills Benefit Partners has joined United Benefit Advisors (UBA), an alliance of more than 140 independent benefit advisory firms located in over 165 offices throughout the U.S., Canada and the U.K.
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According to a press release, UBA is one of the nation’s top five employee benefits advisory organizations.

SevenHills Benefit Partners is a locally owned, independent firm located in Saint Paul, Minnesota “with a history of helping companies and their employees with insurance, employee benefits and retirement plan needs that trace back over 80 years”, according to the firm.

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“It is essential that we continue to identify new ways to remain competitive in the employee benefits arena. Becoming a UBA member presents our agency with the opportunity to enhance our services and better serve our clients’ needs during this time of tremendous change, while providing us with the resources that help support and maintain our independence,” said Christopher Schneeman, President of SevenHills Benefit Partners.

“To qualify for UBA membership, an agency must meet stringent financial and professional credentialing requirements and commit to the most thorough code of ethics in the benefits industry. SevenHills Benefit Partners is recognized as one of the top independent employee benefit advisory firms in the country, and we are proud to have them as a member,” said William J. Howell, UBA president.

UBA members provide benefits consulting, brokerage services, and best-in-class products to over 40,000 private corporations and public employers. As trusted advisors, UBA members help their clients manage nearly $16.5 billion annually in employee benefit expenditures on behalf of over 4.8 million employees and their families.

More information is available at http://ubabenefits.com.

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