A “third party administrator fee” was used to skim more than $3.3 million from employees’ paychecks.
From 2013 through 2017, some 300 workers at Plainville, CT-based Ferguson Electric and Ferguson Mechanical Ferguson had deductions of some $1.60 to $3.15 per hour taken from their fringe benefits package as a "third party administrator fee" for the employees' pension plans. These funds (some $3,357,516) were mailed to TPA of Connecticut which, in turn, sent the monies to DJS Associates.
However, the “third party administrator fee” scheme had nothing to do with a TPA. It was all the handiwork of one Lee Ferguson, 62, who not only owned the two Ferguson enterprises that bore his name, but who also, according to a federal indictment, “exercised control over DJS Associates, a Florida company that was formed at the behest of the defendant for the purported purpose of performing business-consulting services for FERGUSON and his companies,” though not only were “no such services were performed,” Ferguson never intended that any such services be performed, as well as TPA of Connecticut, a Connecticut company, which acted as the purported third party administrator for the pension plans.
Last week Ferguson pled guilty to one count of money laundering before Judge Michael P. Shea in the U.S. District Court for the District of Connecticut.
That indictment noted that, “in furtherance of the scheme and artifice to defraud, Ferguson used and caused to be used the United States mail by causing checks, which included the monies wrongfully deducted from the employees' fringe benefits package, payable to TPA of Connecticut to be sent in the United States mail to TPA of Connecticut. In addition, and in furtherance of the scheme and artifice to defraud, Ferguson also used and caused to be used the United States mail by causing documents relating to the employees' pension plans to be sent in the United States mail to TPA of Connecticut.”
Ferguson will face up to 10 years in prison when he is sentenced on October 24. He was released on a $50,000 bond pending sentencing.