ComplianceFebruary 16, 2010

Plan Sponsor Sentenced for 401(k) Theft

A plan sponsor charged with stealing from her company’s 401(k) plan has been sentenced to more than two years in prison.

Reported by Nevin E. Adams

Cynthia Curran, who plead guilty last year to two counts of theft from an employee benefit plan and two counts of making a false statement, must spend 30 months behind bars and pay full restitution for stealing from Barrington Systems’ 401(k) over a nine-year period, U.S. District Judge Phyllis Hamilton said during a hearing this week in Oakland, California.

According to the San Francisco Chronicle, from 1997 to 2006, Curran misappropriated $241,208 in employee contributions and vested employer contributions for her own use while she was vice president of the company and trustee of its 401(k) plan. The company, which she founded with her husband, developed software for climate-control systems until it went out of business in 2006, according to the report.

Investigators at the U.S. Department of Labor learned of the crime after employees who were laid off by the company were unable to recover their retirement accounts because their contributions had been stolen.

Curran lied to department investigators about the balance in the 401(k) account to cover up her theft, authorities said, according to the news report. Curran also suggested that computer hackers may have stolen the money, which Assistant U.S. Attorney Owen Martikan wrote in a sentencing memorandum was “implausible.”