Since the FBI closed down Vantage Benefits on November 1, we haven’t heard much.
Here is an update:
- MBA Engineering, Inc filed sued against Vantage Benefits, Jeff Richie and his wife, Wendy Richie, for the $2,269,653.43 that is missing from the MBA Engineering, Inc. Employees 401(k) Plan. The suit alleges that the Defendants falsified pan participant account statements and participant account website information to make it appear that participant account balances were whole and accurate. Unnamed people named DOES 1-10 were sued as well as MBA is trying to identify who is involved in the fraud. From my experience in the Matt Hutcheson disaster (as detailed in my forthcoming book), I expect that further suits will be filed and other plan providers in connection with this matter may be sued as well. Any provider entity that might have accepted an order from Vantage to liquidate and transfer plan assets for corporate and personal use maybe sued as well.
- Jeff Richie is still not under arrest. I’ve talked to some of his former employees and even a plan participant in one of the plans where Vantage stole money and everyone is surprised no arrest has been made. A civil lawsuit is easy to file and there might be multiple shots at litigation by multiple plaintiffs. A criminal action allows the prosecutor only one shot at the apple, so expect the Department of Justice and the Department of Labor to act a lot slower than plan sponsors who want to track down plan assets. Again from the Hutcheson case, it took several months for a criminal complaint to be filed and an arrest made. I remember talking to Matt after the media disclosed the allegations against him and civil litigation filed against him. Matt was a little arrogant that he wasn’t under arrest and it wasn’t soon after, that he was arrested for his theft.
- A concern for me is that there hasn’t been word as to the full amount of the possible fraud committed against Vantage’s plan sponsor clients. I’m concerned about the liability exposure for plan sponsors who hired Vantage and plan providers that referred Vantage or worked with Vantage in any connection with a transfer of plan assets to Vantage or the Richies.
- If this situation is related to the theft of plan assets, I’m interested in whether other Vantage employees were involved in this disaster. If statements and website information were manipulated, assume that other employees might be involved as well. I just remember Bernie Madoff and how it was impossible to keep a Ponzi Scheme running without more help.