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Fiduciary Embezzler Comes Up Short

Christine Bodouva was the Chief Operating Officer and Senior V.P. of William N. Bodouva & Associates, an architecture firm. According to a blog post by Stinson, Leonard Street LLP, she was the plan fiduciary responsible for remitting employee salary deferrals to the 401(k) plan custodian.

However, for reasons not explained, she apparently decided to keep some of those deferrals for herself, and in March 2016, she was indicted under ERISA’s criminal statutes for embezzling $127,854.22 from the plan. That indictment called for a “forfeiture” of the amounts wrongfully converted to her personal use.

As it turns out, prior to that trial Bodouva had restored $126,979.63 to the 401(k) plan and, at her sentencing (following conviction), she asked the court to offset her forfeiture by the amount already paid back to the plan.

The district court ruled that it had no discretion to do so.

The Appeal

So Bodouva appealed the district court decision to the 2nd U.S. Circuit Court of Appeals (U.S. v Christine Bodouva, Case 16-3937, 2nd Cir. 3/22/17), which ruled that:


  • restitution and forfeiture are authorized by separate statutes with different purposes;

  • the court could not find any statutory authority to reduce a criminal forfeiture by restitution paid or payable; and

  • “Criminal forfeiture is a form of punishment” and distinct from civil remedies to make victims whole.


The bottom line? Bodouva had to pay the amount embezzled from the retirement plan… twice.

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