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The United States Attorney's Office
Middle District of Tennessee
September 9, 2008
CEO OF 1POINT SOLUTIONS PLEADS GUILTY TO EMBEZZLING OVER $19 MILLION IN RETIREMENT FUNDS
Nashville, TN - September 09, 2008 - United States Attorney Edward M. Yarbrough announced today that Barry R. Stokes, the former CEO of 1Point Solutions, an employee pension benefits program administration company based in Dickson, Tennessee, has plead guilty to over thirty counts related to his embezzlement of over $19 million in employee benefit plan funds from over 1,000 victims.
In a hearing before Senior United States District Judge Robert L. Echols, the defendant entered pleas of guilty to twenty-nine counts of embezzlement of ERISA funds, in violation of Title 18, United States Code, Section 664; one count of mail fraud, in violation of Title 18, United States Code, Section 1341; two counts of wire fraud, in violation of Title 18, United States Code, Section 1343; six counts of money laundering in violation of Title 18, United States Code, Section 1957; and four counts of criminal contempt, in violation of Title 18, United States Code, Section 401(3). The defendant also entered a guilty plea to a forfeiture count pursuant to Title 18, United States Code, Section 981(a)(1)(C), which allows for forfeiture of any and all assets that were proceeds of the defendant's offenses, and Title 28, United States Code, Section 2461(c), which allows for forfeiture of substitute property for proceeds that were transferred, sold or diminished by the defendant. Specifically, the defendant agreed to the forfeiture to the United States of over 200 pieces of Japanese art that were located and seized by federal agents in Austin, Texas in June 2007, and a money judgment equal to the amount of court-ordered restitution to victims.
According to the terms of a plea agreement with the government, the defendant agreed to a minimum base offense level of 35 levels according to the United States Sentencing Guidelines (U.S.S.G.). This calculation would result in an advisory sentencing guidelines range of 168-210 months. From there, according to the terms of the agreement, the government is free to petition the court at the sentencing hearing to argue for an additional upward enhancement of 2 levels on the grounds that the defendant committed bankruptcy fraud during the course of these proceedings. If the court finds that this additional enhancement is applicable based on the evidence presented by the government and the facts of the case, the result would be a U.S.S.G. offense level of 37, which would result in an advisory sentencing guidelines range of 210-262 months.
The defendant also agreed to waive appeals, and to be barred forever from any form of future employment in the financial industry. Said Mr. Yarbrough, "This case is a stark and painful example of what goes wrong when corporate officers are overcome with greed and self-interest instead of providing honest, faithful service to customers and investors. Let this be a message: our office will aggressively and vigorously pursue any white-collar criminal who causes such devastating and irreparable harm to victims while undermining consumer confidence in the marketplace. The Middle District of Tennessee will not tolerate such breaches of trust, and will be no haven for corporate criminals and fraudsters."
In the plea agreement between the United States and the defendant, the defendant also admitted to extensive and intricate details of how he devised, operated and concealed his sophisticated scheme to embezzle from hundreds of employee benefit plans. Most importantly, the defendant admitted that he never properly invested any of the 401(k) funds with which he had been entrusted, and instead embezzled approximately $14.5 million in 401(k) rollovers, conversions and contributions. Additionally, the defendant admitted to embezzling approximately $4.8 million in funds from other employee benefit programs, such as Flexible Spending Accounts (FSAs), Health Savings Accounts (HSAs), and Dependent Care Accounts (DCAs). In all, the defendant embezzled approximately $19.3 million while victimizing approximately 35,000 individual employees across the entire United States, many of whom resided in the Middle District of Tennessee. More specific details regarding the defendant's admissions can be found in the plea agreement, which has been posted on the website for the United States Attorney for the Middle District of Tennessee, at http://www.usdoj.gov/usao/tnm.
Judge Echols will schedule a sentencing hearing by subsequent order. At the time of sentencing, Judge Echols will decide whether to accept the parties' sentencing recommendations. If Judge Echols does not accept the parties' respective recommendations for a guideline range of either 168-210 or 210-262 months imprisonment, then either party would be permitted to withdraw from the plea agreement.
These charges were
brought following a large-scale and coordinated investigation conducted
by members of the Federal Bureau of Investigation, the Internal Revenue
Service, the Department of Labor and the United States Postal Inspection
Service. Assistant United States Attorneys Courtney D. Trombly and Byron
Jones prosecuted the case for the United States.