The former owners of Lunde Electric in Ballard now face the penalty for two felony charges of Embezzlement or Conversion from an Employee Pension Benefit Plan, and one felony charge of Falsification of Records of an Employee Pension Benefit Plan.
Sigmund G. Eriksen and Raymond A. Eriksen were sentenced on Friday to two years of probation, a $20,000 fine each and they must perform 240 hours of community service.
The Eriksens were convicted in October 2009. A jury acquitted the two of nine counts and couldn’t reach a verdict on the other charges. At the sentencing on Friday, “U.S. District Judge John C. Coughenour said that any businessman who talks with the Eriksens will realize that they would be a fool to engage in similar conduct and run the risk of a felony prosecution and conviction,” the press release from the Department of Justice states. Here are details from the release:
According to testimony at trial and records filed in the case, Lunde Electric adopted a 401(k) retirement plan for their non-union employees in 1995. Employees could pay a portion of their salary into the plan, and the company would match 50% of the employee contribution. By law, employee contributions are to be paid into the trust fund as soon as deducted from employees’ paychecks and in no case later than the 15th day of the following month. Beginning in January 1999, and continuing into 2003, the Eriksens failed to forward the employee contributions to the 401(k) trust fund. Employees received 401(k) account statements that failed to disclose that their contributions had not been paid into the trust fund.
The Eriksens were advised by their attorney and accountant to begin forwarding the employee contributions to the trust fund, but failed to do so. In October 2004, some 18 months after the U.S. Department of Labor subpoenaed the Lunde Electric 401(k) records, the Eriksens paid just over $90,000 to the trust fund, more than $65,000 of that was employee money. The Eriksens were indicted in December 2008.
Prosecutors wrote to the court asking for prison time because the men, “…stole their employees’ retirement contributions month after month over a four-year period and used these funds to meet the financial obligations of a company that they, and only they, owned and controlled. They did so despite their fiduciary obligations to their employees as the plan trustees; despite the repeated input from their bookkeeper; despite the advice and warnings they received from their ERISA attorney and plan accountant; and despite having no need for their employees’ contributions. They stopped taking their employees’ money only after they were served with grand jury subpoenas in early April 2003, i.e., only after the Department of Justice intervened.” Judge Coughenour decided that prison time for the two was not necessary. (Thanks Todd for the tip!)
I guess that's as tough a sentence as it gets around here.
The first thing should have been to force them to make those 401k's whole, plus the lost interest.
The fines won't do that.
I wonder if the civil suit is next…
Rob a convenience store for a couple hundred, do hard time (unless 18 or younger). Rob your employees for tens of thousands, do no time.
As stated above “Only the Department of Justice” attorneys could intervene for the benefit of the criminals. This is normal proceedure for DoJ attorneys and Assistant US attorneys in that they try to find every way to not prosecute the guilty and/or if they prosecute then they get plea agreements that reduce crimes from felony to misdemeanor charges and/or they agree for very light sentences for convicted criminals at trial. This is part of the reason there is not real true justice in the criminal system. Why do you think there are so many wealthy defense attorneys and Government attorneys that leave the government and work to defend the criminals. They know the truth about the Justice Department and how they can get substantially reduced charges on their clients and/or no jail time (self probation, etc.) I realized this years ago when I worked for the government and was involved in criminal cases and prosecutions.
WOW! The rich get richer by breaking the law and STEALING from their hardworking employees and there is still no justice. Tragic.
Eat the rich!
Seriously?
I don't think that the rich get richer by breaking the law.
But if it makes you feel better…
Enron of Ballard –
They will probably pay/bribe somebody to go to their probation office and pay/bribe somebody to do their community service for them……..
Some “upstanding citzens & pillars of Ballard”…….what a joke
So the rich don't get richer by breaking the law??!! Talk to Bernie Madoff for just one example!!!!
So the rich don't get rich by breaking the law??!! Try Bernie Madoff!!
Interesting how the rich always seem to get off and are not held accountable for what they do. If one of the employees would have taken money from the employer they would no doubt be in jail. What does that say for our justice system.
I agree with Bob – if one of their loyal employees had taken any money, they would be in jail now.
They continue to think they are above the law………sooner or later they will have to answer
hey onederfullone seems like most of us disagree with your reference that rich people don't break the law to get richer, but what do we know?
Finnes ikke! Slem! Despite the advice of their attorney AND their CPA – and still continued to steal from their employees up until the time they were investigated? Skam deg!!
These men are good upstanding citizens that employed and served many people in this community for over 25 years!! The only crime they are guilty of is hiring and trusting incompetent office staff and so called professionals that did not make the appropriate deposits when instructed to do so. Upon finding out that she (the alcoholic bookkeeper) could be prosecuted for not making the payments, she claimed she was told not to make the payments by the owners. Which was a blatant LIE to protect herself.
The employees were actually paid back every cent plus interest.
The government (prosecution) confused the case with an incredible amount of irrelevant information, extending the case and causing the jury to rush through the verdict so they could finally go home. The real shame is what you people fail to see here; to conduct a trial like this in Federal court costs taxpayers millions of dollars per day. Who are the real criminals here? The total delinquent amount of the “employee contribution portion” of the plan that was not forwarded to the plan within the 15 day requirement over the 3 years was only $2,200. , hardly worth stealing!
BULL SHIT !!!!!!!
Speaking as a former employee the interest was NEVER PAID !!!!!!!!!! We have no idea how much was lost, because they did not pay it until they were caught!!!
AND FURTHERMORE the owners were ALWAYS telling their employees to not make the payments,lie to the vendors, hold the checks, say “the check is in the mail” etc etc etc
Speaking of lies……only $2,200.oo ?, try thousands & thousands………