Former Owner of Construction Company Admits Embezzlement
CAMDEN, N.J. – The former owner of a construction company today admitted his role in defrauding a retirement plan set up by the company, U.S. Attorney Craig Carpenito announced.
Joshua Ferrell, 34, of Chatsworth, New Jersey, the former owner of Indian Mills Contracting Services Inc. (Indian Mills), pleaded guilty plea by videoconference before U.S. District Judge Joseph H. Rodriguez to an information charging him with one count of embezzlement and theft from an employee pension or welfare benefit plan or a fund connected with such plan established for the company’s employees.
According to documents filed in this case and statements made in court:
Ferrell admitted that, between 2011 and February 2017, he was the president and owner of Indian Mills, which was a construction company in Chatsworth. Indian Mills was a family owned construction company that worked on federal, municipal, state, commercial and industrial projects throughout New Jersey. Indian Mills employed machine operators, carpenters, cement masons and labors.
In 2015, Ferrell established the Indian Mills Contracting Inc. 401K Plan which was established as a single employer profit sharing and 401K plan. The plan was covered by the Employee Retirement Income Security Act (ERISA) of 1974. Ferrell was the plan administrator.
Under the ERISA regulations, employers are permitted to establish and maintain employer sponsored retirement plans for the benefit of their employees. Once these plans are established, both employers and employees have the option of making regular contributions of funds to them. The accumulated plan assets are generally invested for the benefit of the plan and the plan participants, and any capital gains or income earned through such investment are added to the accumulated plan assets. Upon retirement, or when otherwise eligible, a plan participant may request and receive disbursements from the retirement plan assets. These disbursements correspond to contributions made to the plan by the participant, plus any associated gains made during the term of employment.
Ferrell admitted that the 401K plan allowed employees to defer portions of their salary before taxes from their bi-weekly paychecks and have that money earmarked for contribution into the plan’s trust.
Ferrell admitted that between Jan. 1, 2015, and February 2017, money which was deducted bi-weekly from Indian Mills employees’ paychecks and which was supposed to be contributed to the plan was instead kept by Ferrell and spent by him.
The charges to which Ferrell pleaded guilty carry a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled Oct. 19, 2020.
U.S. Attorney Carpenito credited special agents of the U.S. Department of Labor, Office of Inspector General, under the direction of Special Agent in Charge Michael C. Mikulka in New York; and investigators of the U.S. Department of Labor, Employee Benefits Security Administration (EBSA), under the direction of Philadelphia Regional Director Michael Schloss, with the investigation leading to today’s guilty plea.
The government is represented by Senior Trial Counsel Jason M. Richardson of the U.S. Attorney's Office Criminal Division in Camden.