A judge in U.S. District Court in Hauppauge, N.Y., sentenced Ralph Corace, trustee of Job Shop Technical Services Inc., Farmingdale, N.Y., to 37 months in prison, three years' probation, and a $60,000 fine for failing to deposit $2.7 million in employee contributions into the company's 401(k) plan for two years and using the money to run the financially troubled company instead.
The sentencing last month is a result of the largest criminal and civil cases brought through the Labor Department's enforcement actions against employers that misuse pension contributions by workers to company-sponsored retirement plans.
The U.S. attorney's office brought the criminal charges against Mr. Corace on a referral from the Labor Department.
At the time the Labor Department filed its lawsuit against Mr. Corace in October 1995, Job Shop's 401(k) pension plan had $4.3 million in assets and covered 755 participants.
As part of the settlement of the civil complaint, Mr. Corace was ordered to restore the money to the plan. Also as part of that agreement, Resource Management International Inc., which purchased Job Shop assets, agreed to restore $30,000 to the retirement plan.
