The founder of a New Jersey-based vending machine company operating in New Jersey and New York was sentenced to two and a half years in federal prison for embezzling $368,783 from the company’s pension fund.
Howard Preschel admitted to the embezzlement last August. His operations spanned the course of eight years, whereby he extracted the money from the CMG Vending Inc. Pension Trust in a series of 52 withdrawals. Most withdrawals were just a few thousand dollars, but on May 5, 2015, he pulled $136,786.93 from the pension, according to court documents.
To cover up his theft, Preschel “did knowingly and willfully fail to file the annual report for the last fiscal year” for 2013, 2014, and 2015, the documents stated. He also allegedly did not inform employees that insufficient funds were being forwarded to the plan and failed to distribute the annual funding notice to plan participants.
As part of the illegal withdrawals, the pension lost an additional $93,267 in interest, according to the US Attorney’s Office website. He will be ordered to pay this back as well, creating a total of $462,050 owed, in addition to serving his 30-month sentence.
“As part of the plea agreement, Preschel agreed to make restitution to the trust fund in the amount of $462,050,” the office’s website states. “Preschel also agreed to a debarment which prohibits him from acting as a fiduciary on behalf of any employee benefit plan for a period of 13 years.”
The complaint also alleged that when a beneficiary of CMG’s pension plan inquired about distributing an annual funding notice to other employers, Preschel instructed the employee not to do so.
The embezzlement charges each carry a maximum penalty of five years in prison and a fine of up to $250,000. Failing to file an annual report charges each carry a maximum penalty of 10 years in prison and a fine of up to $100,000.
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Tags: CMG Vending, Embezzlement, Fraud, indictment, Pension Fund, Pension Plan, Retirement System, Theft