News nearby: Gaithersburg, Potomac Swindlers Guilty of Pension Fraud
Nikolaos M. Hepler, of Gaithersburg, and Robert Fulton Rood IV, of Potomac, pleaded guilty to conspiracy to commit wire fraud.
Two Montgomery County men have pleaded guilty to conspiracy to commit wire fraud for engaging in a scheme to steal more than $9 million from Vienna, VA-based Southern Management Corporation’s employee pension plan, according to the FBI.
Nikolaos M. Hepler, 32, of Gaithersburg, and Robert Fulton Rood IV, 45, of Potomac, were charged on Dec. 13, 2011, by a federal grand jury in a 16-count indictment of conspiracy to commit wire fraud, wire fraud and theft from an employee benefit plan.
Hepler faces a maximum penalty of five years in prison, and Rood faces a maximum penalty of 20 years. They entered their plea Tuesday. They will be sentenced on Feb. 1, 2013, and Jan. 25, 2013, respectively.
The FBI stated:
According to the statement of facts filed with their plea agreements, Rood and Hepler agreed to a scheme to defraud Southern Management Corporation Retirement Trust (SMCRT), a pension plan established by Southern Management Corporation (SMC) for its employees. Rood presented loan application packages to, and subsequently executed purchased agreements with, SMC’s loan committee. SMCRT used funds to invest in these loans to borrowers. The borrowers would use loaned funds to purchase real estate, finance construction, and make monthly interest payments. The loans were generally for one year. At the end of the loan period, the loans were to be repaid with funds ultimately paid to SMCRT.
According to court papers, Rood and Hepler concealed the re-routing of funds due to SMCRT into accounts maintained by Rood. Rood and Hepler also misrepresented that certain loans were active when, in fact, they either failed to settle or were paid off early. When SMCRT raised questions about certain transactions, Rood directed co-conspirators Hepler and Lloyd Mallory, Jr., a certified public accountant, to create a false report regarding loan files intended to mislead SMCRT about the true status of their investment. The government asserts that SMCRT suffered a loss of $9,574,853 as a result of the conspiracy.