An executive at an investment advisory firm who allegedly ran an adult escort business on the side has been accused by federal investigators of pilfering nearly $400,000 from his company's 401(k) plan.
Mark Harrington, a former vice president and controller at Anchor Capital Advisors LLC of Boston, was charged with embezzlement this week after federal agents in Massachusetts discovered that he had withdrawn $368,000 from Anchor's 401(k) plan during the second half of 2008.
According to court documents, he said he used the money from the plan to help cover gambling and divorce costs, and also to purchase a home for his girlfriend.
Anchor, which is a subsidiary of Boston Private Financial Holdings Inc., terminated Mr. Harrington last month after conducting its own investigation into activity in its 401(k) plan. He had been responsible for winding down that plan after Boston Private acquired Anchor in 2006.
Federal investigators charge that Mr. Harrington, who separately presided over an adult escort operation, had one of his associates from this side business set up a bank account under the name Anchor Capital Advisors at the end of last year.
He and his adult escort associate used this account to fraudulently deposit checks that Anchor's 401(k) custodians, which were
Fidelity Investments of Boston and State Street Bank & Trust Co. of Quincy, Mass., issued at his request, according to court documents.
When Mr. Harrington was eventually confronted by Anchor executives over the whereabouts of missing checks, he claimed that they “disappeared from his desk,” according to court documents.
He then contacted the Boston Police Department two days later and filed a report claiming that a pair of checks had been lost or stolen, and subsequently deposited into an account at Danversbank, the Danvers, Mass.-based bank where federal agents said that Mr. Harrington and his escort associate had previously set up their fraudulent account.
William Rice, Anchor's president and treasurer, declined to comment and referred calls to an outside public relations firm on the matter. Anchor's press representative wasn’t immediately available for comment.
A call to a spokeswoman for Boston Private wasn’t immediately returned.
Mr. Harrington, who resides in West Roxbury, Mass., doesn’t have a listed number, and his contact information couldn’t immediately be obtained.
Anchor manages $5 billion in assets, according to the company's website.
