|Nashville, TN –– Craig S. Morford, United States Attorney for the Middle District of Tennessee, announced that a federal grand jury in Nashville has returned a 78-count superseding indictment against Barry R. Stokes, 49, of Dickson, Tennessee. The superseding indictment charges Stokes with 29 counts of embezzlement of ERISA funds, 21 counts of mail fraud, 11 counts of wire fraud, 11 counts of money laundering, four counts of criminal contempt, and two counts of bankruptcy fraud. Stokes was arrested on October 13, 2006 and has been detained since that time. He was previously indicted on November 8, 2006, at which time he was charged with six counts of embezzlement of ERISA funds.
According to the superseding indictment, Stokes was the sole owner and Chief Executive Officer (CEO) of 1 Point Solutions, LLC, a company that was engaged in the business of third party administration for various types of employee benefit plans such as 401(k) retirement plans, Flexible Spending Accounts (FSAs), Health Savings Accounts (HSAs), Health Reimbursement Accounts (HRAs), and Dependent Care Plans (DCPs). Stokes solicited over fifty-five companies to entrust their retirement plans to 1 Point Solutions and agreed to act as investment advisor, funds custodian, and third party administrator for each retirement plan.
The superseding indictment alleges that from about January 1, 2002, until approximately October 13, 2006, Stokes devised a scheme to steal money and property from clients of 1 Point Solutions. The indictment states that Stokes stole over $15 million in employee pension benefit plan assets from over 1,092 participants. Instead of investing funds for the benefit of the 401(k) retirement plans, Stokes used plan ssets for his own personal use by pooling the plan assets in several accounts over which he had control and authority.
The indictment charges that the stolen funds were used for: the purchase of an extensive collection of Japanese art insured for approximately $2 million; the purchase of real estate, including two buildings in Dickson, Tennessee, and a piece of property in Austin, Texas; the payment of overhead costs and operating expenses of 1 Point Solutions; funding of an allowance for Stokes’; the payment of personal credit card bills; investments in a Nashville restaurant; throwing fund-raising parties and events; establishing a charitable foundation; psychic readings; political campaign contributions; jewelry; and numerous personal Pay Pal purchases made over the Internet.
The indictment also states that Stokes caused employees of 1 Point Solutions to prepare and distribute false quarterly 401(k) account statements to employers and participants. Additionally, Stokes allegedly caused 1 Point Solutions employees to create and maintain a website through which plan participants could access their individual accounts on a daily basis to check on performance and balances. Both of these participant resources falsely represented that the plan assets had been invested as instructed when, in fact, the funds had been misappropriated by Stokes. During this time, Stokes allegedly continued to receive and accept regular employer and employee fund contributions to the retirement plans without disclosing that the plan assets had been converted to his own use and not invested as directed.
Stokes was also charged with fraudulently hiding and concealing the $2 million art collection from the bankruptcy court considering 1 Point Solutions’ Chapter 11 Bankruptcy filing by moving the art collection from his residence in Dickson to a residence in Austin, Texas. The indictment further charges that on March 21, 2007, Stokes created a fake receipt, dated July 16, 2006, that falsely represented that a Chevrolet Malibu, an asset under the bankruptcy estate, had been paid for in full when, in fact, 1 Point Solutions had never been reimbursed for the vehicle.
Additionally, Stokes was charged with four counts of criminal contempt for disobeying a temporary restraining order issued on September 13, 2006, by U.S. District Judge William J. Haynes, Jr., which barred Stokes from dissipating any assets in his name or in the name of 1 Point Solutions. The indictment alleges that, between September 14, 2006 through September 16, 2006, Stokes cashed four checks for over $39,000.00. The checks were drawn on 1 Point Solutions accounts.
Mr. Morford commented on the new charges, saying, “The indictment reflects a continuing and protracted pattern of predatory fraud committed by Mr. Stokes upon thousands of the hardworking citizens of Tennessee, Georgia, Oregon, Texas, Massachusetts and elsewhere. “Given the fact that over 35,000 individuals had accounts with Mr. Stokes, the United States Attorney’s Office has established a website and a toll-free hotline for anyone who may have suffered losses in this matter.” The United States Attorney’s website for information related to this case can be found at: www.usdoj.gov/usao/tnm. The toll-free hotline for information related to this case is: 1-866-364-7557.
Sentencing ramifications of the offenses charged in the superseding indictment will be determined by the court in consultation with the Federal Sentencing Guidelines based on the ultimate factual findings of the court.
This multi-agency investigation was conducted jointly by the FBI, IRS Criminal Investigation, the U.S. Department of Labor, and U.S. Postal Inspection Service. Assistant U.S. Attorneys Courtney D. Trombly and Byron Jones will represent the government.
The United States Attorney’s Office also emphasized that an indictment is merely a form of accusation and is not evidence of guilt. The defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.