Plan Compliance Group Update
starbulletin.com | News | /2007/04/28/
Update on Plan Compliance Group
Man guilty in UH, DOE pension scam
Question: What ever happened to Plan Compliance Group, the California company accused of losing nearly $2.3 million from retirement accounts of Hawaii Department of Education employees and $420,000 from the accounts of University of Hawaii workers?
Answer: Education officials are still trying to have the company, which filed for bankruptcy in December 2005, pay back the money. The DOE and UH have reimbursed some 10,000 affected employees.
The university used risk-management money to replace the funds missing from the retirement accounts of its workers, said spokeswoman Carolyn Tanaka. The university is now managing the accounts, she said. The DOE also used state funds to make up for the money lost, said spokesman Greg Knudsen.
The owner of Walnut Creek, Calif.-based PCG, Francis William "Bill" Reimers, pleaded guilty last month to six counts of mail fraud and one count of money laundering in federal court, according to the U.S. Department of Justice. In a deal with federal prosecutors, Reimers admitted to carrying out a fraud scheme that caused more than $7 million in losses to more than 250 investors.
Reimers, 62, faces up to 20 years in prison for each of the seven counts, plus substantial fines and restitution. His sentencing has been scheduled for Aug. 3.
Reimers, who also owned Advisory Services Group, a financial investment services company, admitted to using money from investors to pay his mortgage and to buy luxury cars, vacations and hunting trips. Meanwhile, he would give individual investors false account statements and divert the money to run PCG and Univest Capital Management, which managed benefits for federal employees.
In 2005 the DOE sued PCG for fraud, negligence and breach of contract over the disappearance of the money. UH has also filed a lawsuit to retrieve the funds, said Darolyn Lendio, the university's vice president for legal affairs and general counsel.
When it filed for Chapter 7 bankruptcy, PCG estimated its assets at less than $500,000.
This update was written by Alexandre Da Silva
Scott Dauenhauer, CFP, MSFP, AIF