Employee Gets Jail Time for Embezzling 401(k) Funds

The Employee Benefits Security Association participated in a multi-agency investigation related to a theft from a 401(k) plan that has resulted in a criminal conviction.

John Hairabet, Jr., a former office manager of New England Anesthesiologists, Inc., and president of Anesthesia Management Consultants, was found guilty of embezzling $120,313 in employee deferrals to a 401(k) fund, as well as $587,218 from New York Anesthesiologists’ bank accounts.

The U.S. District Court for the District of Rhode Island has sentenced Hairabet to 37 months in federal prison. After he has served this three-plus year prison term, Harabet will serve three years of supervised release. He has also been ordered to pay restitution to the victims in this case; that amount has yet to be determined.

Last July, Hairabet pled guity to one count of pension fund theft, six counts of wire fraud and two counts of money laundering.

“Theft from pension funds violates the law and cheats plan participants,” says Employee Benefits Security Administration Acting Regional Director Carol Hamilton, in Boston. “The U.S. Department of Labor will continue to investigate and take action to counter any activity that threatens employees’ hard-earned retirement benefits.”