Less than a year after the Securities and Exchange Commission seized control of $300 million in retirement assets at American Pension Services, the firm’s owner has agreed to settle claims that he misappropriated $24 million.
The SEC sued Curtis DeYoung, founder and CEO of the Riverton, Utah-based third-party administrator, after an investigation revealed that $22 million in assets could not be accounted for.
Under the terms of the settlement, DeYoung accepted liability for repaying $19.8 million plus $3.5 million in interest, though it appeared unlikely the sale of his assets would yield any amount close to that figure.
APS’s alleged fraud dates back to 2005, when DeYoung purportedly forged client signatures authorizing investments from cash in clients’ IRA and 401(k) accounts into a friend’s failed business, according to a complaint filed by the SEC in U.S. District Court for the district of Utah.
DeYoung continued to make the unauthorized investments into 2013. The SEC’s complaint further alleged APS invested clients’ money in other bankrupt ventures, and that DeYoung concealed the losses, issued inflated account statements, and ultimately charged fees on assets that did not exist.
The settlement agreement has yet to be accepted by the SEC. The court-appointed receiver of the company’s assets has said that liquidation of DeYoung’s personal assets will do little to cover the losses.
In a recent hearing, U.S. District Judge Robert Shelby indicated he would approve a plan that would spread the loss among the 5,500 clients at APS. Each would see the value of their accounts reduced by 10 percent to cover the shortfall, according to reporting in the Salt Lake Tribune.
DeYoung started the third-party administrator with his wife in 1982.
Under the terms of the settlement agreed to by DeYoung, he would be prohibited from denying wrongdoing in public. His attorney said DeYoung is anticipating that criminal charges will be brought, pursuant to an FBI investigation, according to the Salt Lake Tribune.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
