Oct 19

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Embezzler’s 401k is off limits to victim employer

Recently, in the matter of Richard Todd Thomas v. James S. Bostwick, the Northern District of California rejected a motion to dismiss, allowing a convicted embezzler to pursue retirement funds retained by his former employer (the victim of his crimes).

Thomas was an employee of James S. Bostwick, a Professional Corporation (“Bostwick, Inc.”) from 1996 to 2005. During this time, the employer made contributions to the retirement plan for the employee’s benefit.  In December 2005, Bostwick Inc. filed a civil action against Thomas for embezzlement.  In October 2006, the court awarded a judgement of almost $20 million.  This was followed by a criminal proceeding against Thomas, during which approximately $9 million was awarded for restitution of the embezzled funds.  When the plan was terminated, the company retained Thomas’ $22,000 account balance as a partial payment against the outstanding judgment.  In refusing to grant the defendant’s motion to dismiss, the court rejected the argument that the employer could appropriately seize the funds under the arguments set forth.


About the author

Renee Howdeshell

Renee Howdeshell is a founding member of Fulcrum Inquiry, an accounting, finance and economic consulting firm that performs damage analyses for commercial litigation, forensic accountings, royalty & distribution audits, financial investigations, and business valuations. Ms. Howdeshell holds a degree in Finance and Marketing from the University of Virginia's McIntire School of Commerce and is a Certified Public Accountant (CPA) and a Certified Fraud Examiner (CFE). She has testified as an expert witness in federal court, CA state court and arbitration regarding the results of her work. She can be reached at (213) 787-4112 and her resume is available at www.fulcrum.com.

Permanent link to this article: http://betweenthenumbers.net/2013/10/embezzlers-401k-is-off-limits-to-victim-employer/

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