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SEWICKLEY, Pa. — The United States Department of Labor received an emergency court order to protect retirement plan assets owned by a Sewickley company that allegedly embezzled millions of dollars from those plans.
According to the Department of Labor, RiversEdge Advanced Retirement Solutions LLC and its owner, Paul Palguta, embezzled over $5.5 million from plans they administered.
>> Local financial advisor accused of embezzling millions of dollars from retirement accounts
The Department of Labor’s Employee Benefits Security Administration found through an investigation that RiversEdge and Palguta violated the ERISA from October 2022 to January 2024 and embezzled at least $5.5 million in retirement plan assets from 17 retirement plans.
RiversEdge is an administrator of at least 240 retirement plans that hold millions of dollars. At least 229 of these retirement plans are covered by the Employee Retirement Income Security Act of 1974, the Department of Labor said.
It was also found that RiversEdge and Palguta allegedly tried to conceal the embezzlement when they issued fraudulent account statements to the retirement plans, causing them to file false reports with the department that overstated the amount of assets in the trust accounts. When the retirement funds didn’t have enough assets to process transactions, RiversEdge and Palguta transferred plan assets from other trusts to cover the costs.
The temporary restraining order obtained by the department:
- Forbids the defendants from any further involvement with trust assets.
- Enjoins them from serving as fiduciaries or service providers to any ERISA plans.
- Forbids the defendants from withdrawing any funds from their two corporate accounts into which they had illegally transferred the plan assets, except court-ordered payment of independent fiduciary fees.
- Requires the defendants to preserve all relevant records for the purpose of transferring to an independent fiduciary appointed by the court.
- Requires the independent fiduciary to oversee an accounting of the 17 mismanaged plans.
In addition to the temporary restraining order, the department is pursuing litigation seeking a permanent injunction and order that requires the RiversEdge and Palguta to restore the missing plan assets to the retirement plans and forbids them from serving as fiduciaries to any plan in the future, the Department of Labor said.
“The U.S. Department of Labor will take emergency legal action when fiduciaries violate the law by embezzling retirement plan assets,” said Acting Regional Solicitor of Labor Samantha Thomas in Philadelphia. “The department is determined to protect the assets of employee benefit plans and to hold fiduciaries responsible for failing to discharge their legal duties to protect these assets.”
Affected plans should immediately consult with legal counsel to obtain advice and make decisions relative to your interests, the Department of Labor said.
Last week, Channel 11 told you of a federal lawsuit filed against RiversEdge and Palguta pertained to the embezzlement.
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