Fiduciary backer Hutcheson found guilty of 17 counts of wire fraud

A federal court jury in Idaho has found famed 401(k) fiduciary advocate Matthew D. Hutcheson guilty of 17 counts of wire fraud. The jury in the U.S. District Court for the District of Idaho reached the verdict late Monday following an eight-day trial. The U.S. Attorney's Office initially pursued Mr. Hutcheson in federal criminal court last April, alleging that he had misappropriated about $5 million from his retirement plan clients. The adviser will be sentenced on July 23. A related civil case filed by the Labor Department in federal court in Idaho is still in progress. E-mails to Mr. Hutcheson's attorneys, Dick Rubin, Melissa Winberg and Robert Schwarz, were not immediately returned. A call to Mr. Rubin was not returned. The first 12 criminal counts involved a dozen wire transfers out of the G Fiduciary Retirement Income Security Plan's account in 2010, totaling to $2.03 million, according to court documents. Prosecutors said that while Mr. Hutcheson told the plan's record keeper to report on plan participants' account statements that the money was invested in a so-called “TDA Mid-Term Interest Bearing (Cash Equivalent),” the money was actually being used to renovate Mr. Hutcheson's home, make payments on three cars and pay down two motorcycles and a pair of all-terrain vehicles. The other five wire fraud counts involved assets belonging to another plan client, Retirement Security Plan & Trust, and a series of transactions from 2010 to about 2011. Mr. Hutcheson instructed that plan's record keeper to liquidate about $3 million in assets, according to prosecutors. He claimed that the point of the liquidation was to purchase on the behalf of plan participants a fixed-income bank note that was secured by an asset in foreclosure. Prosecutors said, however, that Mr. Hutcheson used the money to buy an interest in a golf course and lodge at the Tamarack Resort in Idaho in the name of Green Valley Holdings, an entity he had set up. Federal authorities alleged that Mr. Hutcheson set up phony documents and a fake proof-of-funds letter supposedly from the president of TD Ameritrade Trust Co. that said the firm had $40 million in accessible funds and could wire the money to Mr. Hutcheson to purchase the resort. The fake documents also had a phony screenshot of Green Valley Holdings' bank account, which showed a balance of over $40 million, prosecutors said. The account in reality had $55 in it, prosecutors said. During an audit of Retirement Security Plan & Trust, Mr. Hutcheson admitted to the auditor that there was no plan investment in a bank note, prosecutors said. They allege he told the auditor that about $3.2 million in plan assets were loaned to Green Valley, which Mr. Hutcheson has acknowledged was a prohibited transaction under the Employee Retirement Income Security Act of 1974. Prosecutors seek some $5.3 million in forfeitures from Mr. Hutcheson. Each count of wire fraud carries a penalty of up to 20 years in prison.