Home Retirement Local financial advisor accused of embezzling millions of dollars from retirement accounts – WPXI

Local financial advisor accused of embezzling millions of dollars from retirement accounts – WPXI

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SEWICKLEY, Pa. — A federal lawsuit that was filed last week accuses a financial advisor in Sewickley of embezzling millions of dollars from retirement and profit-sharing accounts.

According to the lawsuit, Paul Palguta is the owner of RiversEdge Advanced Retirement Solutions.

The lawsuit said that since January 2017, RiversEdge has made multiple transfers from a corporate custody account, titled #RERREBTE, which can only hold cash awaiting further disbursement instructions into its own account at PNC Bank. It was later revealed that the account hadn’t received any outside money since the transfers.

The lawsuit said RiversEdge transferred cash from its own account into plan accounts and transferred cash from one plan trust account to another.

The company also used that account to supply a retirement plan in Beaver County with insufficient funds the money it needed so RiversEdge could buy shares from them. The lawsuit specifies that RiversEdge misappropriated money from six different plans in this situation.

An internal audit revealed approximately 13 ERISA Plans and 4 non-ERISA plans had experienced suspicious transactions, including RiversEdge’s own Profit Sharing Plan.

Palguta is also accused of transferring $1,812,487.77 from the RiversEdge #RERREBTE account to a RiversEdge bank account at PNC Bank through a series of transactions seemingly structured to avoid detection. During this period, RiversEdge made 84 separate transfers of less than $25,000. On Dec. 27, 2023 alone, RiversEdge initiated 14 separate transfers totaling $308,306.70, the lawsuit said.

The U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) determined RiversEdge and Palguta had transferred a total of $23,635,176.16 in assets from the ERISA and non-ERISA plans to the #RERREBTE account from Oct. 2022 through Jan. 2024, the lawsuit said.

During the same time period, RiversEdge and Palguta transferred $18,753,862.20 to different retirement plans, the lawsuit said. EBSA also determined that RiversEdge and Palguta had transferred at least $5.5 million in ERISA and non-ERISA plan assets from the #RERREBTE account to PNC Bank from Oct. 2022 through Jan. 2024.

The U.S. Department of Justice issued preservation letters to MATC and PNC asking them to freeze RiversEdge’s accounts on Jan. 11.

The lawsuit claimed more than $5 million is still missing when statements were comapred. When asked about it, Palguta said it was due to a “system trading error.” Two other accounts were found to be missing around $2 million.

The lawsuit said it seeks to have RiversEdge and Palguta removed as fiduciaries to their own RiversEdge 401(k) Profit Sharing Plan and replaced by an independent fiduciary. It also seeks a final judgment to undo RiversEdge’s and Palguta’s fiduciary breaches and prohibited transactions, to recover any residual losses to the plans, to permanently bar RiversEdge and Palguta from acting as ERISA fiduciaries or service providers in the future and to provide for other remedial and equitable relief.

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