Violations of 18 USC § 664

[Guest Bearlee]

I know of an unsophisticated fiduciary thought it was OK to borrow some money from its own ERISA plan, to keep the company viable. He now has the money to pay it back with lost earnings. He obviously didn't know about 18 U.S.C. § 664 and that it is not OK even if you think you are just borrowing the money, not intending on keeping it. Conversion, embezzlement -- has been perfected, basically. While there is no excuse and this is serious, you know that many unsophisticated plan sponsors justify their use of plan assets with the "keep the business afloat, I am doing this for everyone's sake not just mine" rationale.

Is there some kind of DOL or IRS amnesty program that would work? I know the DOL has the VFCP and could this be finessed under the "below market interest transaction with a party in interest" listed transaction? Any ideas would be welcomed. Thank you.