Former Franklin Homebuilder Pleads Guilty To Theft From Employee Benefit Plan
Custom Homebuilder Used Employee 401(k) Contributions for Personal Use
Nicholas Psillas, 58, of Houston, Texas, formerly of Franklin, Tenn., pleaded guilty today in U.S. District Court to theft from an employee benefit plan, announced David Rivera United States Attorney for the Middle District of Tennessee.
Psillas was indicted in April 2012 and faces up to five years’ in prison, a fine of $250,000, and a term of 3 years of supervised release. He will be sentenced on June 13, 2014.
According to the plea agreement, Psillas was the president and owner of Corinthian Custom Homes (“CCH”), located in Franklin, Tenn. In January 2005 Psillas established a 401(k) plan for CCH employees, of which he was the trustee. Eligible employee participants contributed funds to the plan, which were deducted from their bi-weekly compensation. CCH was responsible for making mandatory “safe harbor” contributions, required by the plan. CCH was also required to remit employee contributions and safe harbor contributions to a financial institution, which was responsible for managing the funds through employee-directed investments.
From approximately March 2006 through October 2007, instead of remitting the contributions as required, Psillas converted to his own use approximately $62,529 in employee contributions and $22,366 in safe harbor contributions. Psillas allowed funds to be withheld from participating employees’ paychecks and then to be deposited into and comingled with the company’s general operating account, which he used for his personal use and the use of CCH.
Psillas’s failure to make the required remittance for the employee and safe harbor contributions resulted in lost earnings of over $12,000.
This case was investigated by the U.S. Department of Labor. Assistant United States Attorney Kathryn Ward Booth represents the government.