Embezzlement of 401(k) alleged
Businessman who shut Lockport firm is indicted in $69,000 pension theft
Published: November 20, 2009, 12:30 am
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A businessman whose Lockport company shut down in 2007 was indicted by a federal grand jury Thursday on charges that he stole money from an employee pension plan.
The indictment of Thomas J. Barnes, 53, of Soldiers Place in Buffalo, was announced by the U. S. attorney’s office.
Barnes, who is also an attorney, is the former owner of Franbilt, a steel-fabrication company on Akron Road whose January 2007 closure cost 45 jobs.
Between April 2005 and January 2007, Barnes allegedly embezzled about $69,000 from the 401(k) plan for company workers, Assistant U. S. Attorney Aaron J. Mango said.
The prosecutor said Barnes is accused of “failing to remit employee contributions deducted from their paychecks and misappropriating an employee distribution payment from the plan.”
The alleged theft was investigated by agents from the U. S. Labor Department.
In May, the Labor Department announced that Michael Burns, Franbilt’s former chief financial officer, had settled a lawsuit filed by the federal government by agreeing never to serve as a fiduciary of any employee benefit plan covered by federal law.
In making that announcement, an official of the Labor Department’s Employee Benefits Security Administration said that its lawsuit against Barnes was still pending.
The actions of Burns were called a “cavalier and reckless misuse of employee benefit funds” by Jean Ackerman, regional director of the benefits administration.
Efforts to reach Barnes by telephone were unsuccessful late Thursday. He is scheduled to appear for arraignment on a felony embezzlement charge this afternoon before U. S. Magistrate Judge Jeremiah J. Mc- Carthy.
dherbeck@buffnews.com
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