A former Lockport businessman pleaded not guilty Friday afternoon to federal charges that he stole money from his employees’ retireement funds.

The attorney for Thomas J. Barnes, 53, of Soldiers Place, Buffalo, alleged that his client has been unfairly targeted by the U. S. attorney’s office.

Barnes, who also is a licensed attorney, is the former owner of Franbilt Inc., a steel fabrication company on Akron Road that eliminated more than 45 jobs when it closed its doors in January 2007.

U. S. Labor Department investigators found that Barnes embezzled about $69,000 from the 401(k) plan for company workers, Assistant U. S. Attorney Aaron J. Mango said.

Those allegations are untrue, said Barnes’ attorney, Mark J. Mahoney, after his client’s arraignment in federal court. Mahoney said government lawyers should have pursued the case as a civil matter against Barnes.

“Barnes never took any of this money. He used [the $69,000] and hundreds of thousands of dollars of his own money to try to keep the company from going under,” Mahoney said. “The rewards for his efforts are that he was forced into personal bankruptcy and lost virtually all his assets, and now faces criminal charges.”

Barnes offered to pay the money back, but federal prosecutors decided to indict him rather than accept that agreement, Mahoney said.

Mahoney also alleged that other individuals who ran the company’s retirement plans have not been charged in the case “because they agreed to point the finger at Barnes.”

Responding to Mahoney’s statements, U. S. Attorney Kathleen M. Mehltretter said a grand jury examined the evidence in the case and “clearly determined that a crime had been committed.”

She added that the investigation arose from complaints made by former employees of Barnes’ company who were unable to access their 401(k) funds.

Barnes was released on his own recognizance after arraignment before U. S. Magistrate Judge Jeremiah J. McCarthy. A grand jury Wednesday indicted Barnes on a felony embezzlement charge.