A man who took $340,000 from Dominican University over eight months pleaded guilty last month in federal court in Peoria to mail fraud and money laundering.
The university found out from an investigator in March that Timothy J. Roth had been transferring money out of an account Dominican had with Hickory Point Bank, a small, independently owned Central Illinois bank, said Amy McCormack, senior vice president of finance and administration for the university.
The News-Gazette of east central Illinois reported that Roth, 56, of Stonington, began removing money from the investment plan accounts of mutual fund clients for his own use in 2004. In 2006, he began transferring, liquidating and removing shares from accounts of seven mutual plan option clients for his own use.
According to a complaint filed in U.S. District Court in central Illinois, Roth had devised a scheme to defraud and obtain money or property worth at least $16 million between May 2004 and March 2011 using false pretenses.
Roth admitted he defrauded 12 victims, both companies and individuals, in the scheme.
He began working for New Jersey-based Comprehensive Capital Management in 2002, where he managed mutual fund option plans for client companies. That same year, he started providing services to Dominican University. The university was the first to be victimized.
Roth was an investment advisor for the Dominican account, which had been held at the bank for 10 years. But Roth was “not authorized to withdraw any funds,” McCormack said. Funds in the account were set aside as part of an employee retirement plan, but employees were not vested in the account. Roth was transferring the funds using fictitious paperwork, likely forging signatures.
McCormack said the school’s attorney anticipates the school will be fully reimbursed from the trustee now overseeing Roth’s assets. However, last spring, the News-Gazette quoted the court-appointed trustee, a lawyer named Timothy Bertschy, saying it seemed unlikely at that point that adequate funds could be recovered from Roth or the multiple shell companies he controlled to provide full recovery to those victimized.
The Securities and Exchange Commission filed a civil complaint against Roth in March claiming he stole more than $6 million of mutual fund shares from several employee deferred-compensation plans he advised. The complaint alleged Roth took money from plans of companies that were clients of his employer, according to the News-Gazette.
The matter was being investigated by the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigations Division, the U.S. Postal Inspection Service, the Securities Department of the Illinois Secretary of State and the Champaign Police Department. The investigation began in March when an investment advisory company to the Champaign Police Department called police.
Roth will be sentenced in July 2012.