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Hate to be the bearer of bad news, but the ERISA actually protects her benefit. There is a 'bad boy rule', but that doesn't apply to salary deferrals or benefits that are vested under the maximum allowable vesting schedule (e.g. 6 year graded). It's been a long while since I read that rule. So, I'm not even sure if it's still applicable. Even then, the employee would've had 10 years of service. So, the bad boy rule would be a mute point. That aside, you may have a civil case and sue for damages. In all likelihood, those plan assets will remain protected; even should you win and get awarded millions from that individual. Good Luck!