White Collar Crime Impact on Businesses and Employees-Kentucky – David Denton

W. David Denton, Attorney Lawyer, Paducah, Kentucky W. David Denton
Denton Law Firm
555 Jefferson Street
Suite 301
Paducah, Kentucky 42001
(270) 450-8253

White Collar Crime Impact on Businesses and Employees: Employer Theft and Remedies

Part Two

Imagine it. You wake up in the night with chest pain and call an ambulance to take you to the emergency room. You go through many medical tests including blood tests, EKG’s, chest x-rays, and more. Final diagnosis: Indigestion. It is a relief to know your heart is in good shape.

Then, you get the bill for the emergency room services. Instead of being billed for the reasonable copay you expected, you are billed thousands of dollars. You discover you have no health insurance coverage. Your employer is one of thousands of employers across the country who instead of paying premiums, keep the withheld money for their own benefit.

Employer Workplace Theft: Employers Steal from Employee Benefit Plans

Appropriating for the employer’s own use healthcare premiums that were withheld from the employee’s salary is just one of many ways in which employers steal money from their employees. The American Institute for CPAs (AICPA) has identified several other ways employers commit workplace fraud against their employees.

Employers surreptitiously dip into 401(k) plans to a degree that no money is left for the employees’ retirement pension. Meanwhile, they falsify the plan’s annual report so that the fraudulent activity cannot be detected.
Employers divert funds paid by employees for medical, dental, and death benefits. Employers make false statements to employees concerning coverage. The employer may use funds to pay for operating expenses, bonuses, and have even been known to use the funds to pay for their own country club memberships.

A Kentucky environmental contractor was recently indicted for both of these types of fraud. He allegedly stole thousands of dollars from 401(k) retirement plans he had set up for his employees as well as stealing money that had been withheld from monthly paychecks that was earmarked for employee health benefits.

Warning Signs Your 401(k) Contributions are Being Misused

The U.S. Department of Labor suggests that you keep close tabs on your individual 401(k) statement and watch for discrepancies. The Department has published a list of warning signs that your contributions to your pension fund are being misused. A few of those signs include:

  • Your 401(k) account statement comes at irregular intervals or is late.
  • The balance seems to be inaccurate.
  • You notice your employer did not transfer your contribution to the plan on a timely basis.
  • You notice a significant drop in your balance and there is no reasonable explanation for it.
  • The account statement does not reflect your contribution that was withheld from your paycheck.
  • You did not authorize the investments that are noted on your statement.
  • You discover that former employees are not receiving their benefits on time and not in the correct amounts.
  • You notice there are unusual transactions that you did not authorize and that do not make sense, like payments to the employer.
  • There is a frequent turnover in investment managers.
  • You know your employer is experiencing financial difficulty.

Possible Remedies for Employer Theft

There are many other ways in which employers steal from their employees. The remedies available depend on the type of theft and the state and federal laws in place to punish and prevent such practices. These are all criminal offenses, but even if the employer is charged with a crime and sent to prison, this does not solve your problem of getting your money.

You may be able to file a civil lawsuit against your employer to have the stolen money restored to you. In addition, you may be able to recover other losses. For example, if you incur unexpected medical expenses due to the failure of your employer to pay health insurance premiums, you may also be able to collect all medical expenses that the health insurance you thought you had would have covered.

More to Come

At the Denton Law Firm, we are concerned about the losses suffered by both employers and employees when they discover they have been victims of this type of theft. Contact us for assistance. We will review the facts of your case and determine if we can help you recover funds that were wrongfully taken from you.  Call our office and speak to Mr. William Pinkston, Mr. Ron Jackson, or Mr. Cody Walls for more information about workplace theft and remedies.

Read Part One:  White Collar Crime Impact on Businesses and Employees: An Overview of Workplace Theft

Read Part Three:  White Collar Crime Impact on Businesses and Employees: Employee Theft and Remedies 

This article is designed to provide general information prepared by the professionals at Denton Law Firm in regard to the subject matter covered. It is provided with the understanding that the author is not engaged in rendering legal, accounting, or other professional service. Although prepared by professionals, these materials should not be utilized as a substitute for professional service in specific situations. If legal advice or other expert assistance is required, the service of a professional should be sought.