Ponzi Scheme Involved Theft of Nearly $2 Million from Employee Benefit Plan

A multi-agency federal and state investigation has led to the guilty plea and imprisonment of Ohio businessman William M. Apostelos, who orchestrated a Ponzi scheme that included the theft of $1.9 million from an employee benefit plan. The U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) and Office of Inspector General (OIG) participated in the investigation and prosecution led by the Justice Department.

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“This case shows what can be accomplished when state and federal agencies work together on the behalf of American taxpayers,” said Director of the EBSA Cincinnati Regional Office, Joe Rivers, quoted in a press release. “Workers and employers invest far too much time, effort and money into saving for the future for criminals to come along and defraud retirement plans.”

The FBI, the IRS, and the OIG began investigating Apostelos, 55, in October 2014, and EBSA joined the investigation in November 2014, based on employee benefit plan investments. Apostelos pleaded guilty to conspiracy to commit mail and wire fraud and theft or embezzlement from an employee benefit plan in February; he has been sentenced to 180 months in prison and ordered to pay more than $32 million in restitution.

Apostelos and his wife, Connie, were indicted in October 2015. Over the course of at least 5 years, the couple and others orchestrated a Ponzi scheme in the Dayton area in which nearly 480 investors lost more than $20 million. Apostelos received $70 million in investment funds in total, including $1.9 million in plan assets. Connie Apostelos pleaded guilty to one count of mail fraud on April 4, 2017, and is scheduled for sentencing on August 2, 2017.

Specifically, the EBSA investigation revealed that a benefit plan, covered by the Employee Retirement Income Security Act, invested roughly $1.9 million of plan assets from July 2010 through December 2011 in an investment company, Midwest Green Resources, formed and controlled by Apostelos. Within days of the investment, Apostelos diverted the plan assets for his and his wife’s personal use, the use of other entities controlled by Apostelos, and to pay previous investors, including personal investments of plan participants. In August of 2012, plan participants received investment payouts from certain monies received from other Apostelos’ investors not related to the plan.

Apostelos operated and oversaw multiple purported investment and asset management companies in the Dayton area, and falsely reported that he held a degree in mathematics and was a registered securities broker. His wife operated several companies in the area that were allegedly funded by the Ponzi scheme.

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Author: HR Daily Advisor Editorial Staff