Mississippi Plan Trustee Pleads Guilty To Embezzling Plan Funds

Archived News Release — Caution: Information may be out of date.

A trustee of an employee benefit plan in Jackson, Miss., pleaded guilty to one count of embezzling nearly $95,000 of the plan's money and converting it to his own use.

John Francis Schmelzer pleaded guilty to charges stemming from a May 14 indictment that he embezzled $94,833.00 from the Professional Staffing Service CA Money Purchase Plan, an employee benefit plan governed by the Employee Retirement Income Security Act (ERISA).

The Professional Staffing Service CA Money Purchase Plan had assets of approximately $317,000 in 1993 and 237 participants in 1991, the most recent date in which Schmelzer filed plan documents with the department. The plan was established in January 1983 in San Francisco, Calif., to provide pension benefits for employees of Professional Staffing Services, an employment service, of which Schmelzer was also owner. In 1990, Schmelzer sold the business, which eventually became defunct. He continued to manage the pension plan, however, and the plan assets were transferred to Jackson, Miss., where he relocated.

From Dec. 7, 1993 until Jan. 30, 1995, Schmelzer embezzled, stole and willfully converted to his own use money, property and other assets of the Professional Staffing Service, according to a plea agreement reached with the U.S. Attorney's Office in Phoenix, Ariz.

In pleading guilty on Feb. 9, the defendant agrees to make restitution to the plan in an amount that will be determined by the court but not greater than $153,833.00. Sentencing is expected to take place in March.

In a prior civil action by the department in July 1996, Schmelzer also was removed as plan trustee.

U.S. v. Schmelzer
CR No. CR - 98-003PHXSMM

U.S. Department of Labor news releases are accessible on the Internet. The information in this news release will be made available in alternate format upon request (large print, Braille, audio tape or disc) from the Central Office for Assistive Services and Technology. Please specify which news release when placing your request. Call 202.693.7773 or TTY 202.693.7775.

Archived News Release — Caution: Information may be out of date.

Contact Name: Rita Ford
Phone Number: 202.219.8921