NORFOLK, Va. – The owner and president of Freedom Mechanical, Inc., Harry Paul Jr., pleaded guilty Thursday to charges of embezzling funds from an employee pension fund.
According to a plea agreement, the company maintained an employee benefit retirement account plan known as the Freedom Mechanical Simple IRA Plan.
The plan was funded by nine employees who chose to contribute to the plan, and employers matched employee’s contributions.
From around April 2013 and June 2016, Paul, with the help of the company’s vice president, embezzled and unlawfully converted $47,056 from the fund.
W-3 Wage and Tax Statements submitted by the company to the IRS included an amount for “deffered compensation” that falsely representated employee contributions to the company.
During that same period of time, Paul did not make employer contributions he owed to the plan.
The embezzled and unlawfully converted money was used to cover the company’s operating costs when the company experienced economic difficulties.
Paul waived indictment by a federal grand jury and pleaded guilty. He will be sentenced on March 7 and faces up to five years in prison.