The agreement and anticipated future payments are expected to compensate the retirement plans fully for approximately $16 million in losses.
FFF created the fictitious loans and forged documents stating that the loans were guaranteed by the U.S. Department of Agriculture. Forty-two retirement plans had invested in a fund that was exposed to the fraudulent FFF loans through subsidiaries of U.S. Fiduciary Services.
The DOL conducted investigations of the subsidiaries—Salem Trust Company, Pennant Management Inc., and GreatBanc Trust Company—for ERISA violations.
After its investigation, the DOL entered into the settlement agreement with U.S. Fiduciary Services and the three subsidiaries. The retirement plans that are due to receive settlement proceeds were also parties to the settlement agreement.