NORFOLK, Va. (WAVY) — The president of a Virginia Beach-based company pleaded guilty Thursday to embezzling money from an employee pension fund.
65-year-old Harry Paul, Jr., of Grandy, North Carolina, waived indictment by a federal grand jury and pleaded guilty to a charge of criminal information.
Prosecutors say Paul is the owner and president of Freedom Mechanical, Inc. The company maintained an employee benefit retirement account plan known as the Freedom Mechanical Simple IRA Plan. The plan was funded by employees who elected to contribute to the plan, as well as mandated matching contributions made by the employer.
Court documents say between about April 2013 and June 2016, Paul, helped by the company’s vice president, who acted at Paul’s direction, embezzled and unlawfully converted $47,056 worth of monetary contributions to the plan.
During that period, W-3 Wage and tax statements transmitted by the company to the IRS included an amount for “deferred compensation” that falsely represented that employee contributions to the company had been made. Also during that period, Paul failed to make the employer contributions. The contributions embezzled and unlawfully converted were used to cover the company’s operating costs during a period when the company experienced severe economic difficulties.
Paul faces a maximum penalty of five years in prison. He’s set to be sentenced on March 7, 2017.