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News & Policy

Former Eastmet Pension Trustee Sentenced for Embezzlement and Perjury

January 24, 2000

Robert E. Baker will serve three years in federal prison for embezzling funds from a pension trust and lying about it to the Pension Benefit Guaranty Corporation (PBGC). Baker was sentenced Friday in U.S. District Court in Baltimore after pleading guilty to embezzlement and later perjury connected with his handling of a trust to pay benefits under the Pension Plan for Management Group Employees of Eastmet Corporation and Eastern Stainless Steel Co.

Baker's criminal conviction last September followed a civil judgment in the Baltimore federal court last March, ordering him to pay nearly $300,000 to PBGC for pension trust funds he embezzled. While pursuing the civil action, PBGC contacted the U.S. Attorney for the District of Maryland and the Federal Bureau of Investigation so that Baker's embezzlement could be the subject of a criminal investigation. The investigation resulted in Baker's indictment by a federal grand jury.

In funding the pension trust to make up for the embezzled monies and pay benefits, PBGC incurred financial losses for which Baker owes restitution. The pension plan terminated following the company's bankruptcy and PBGC set up the trust to pay certain benefits under the plan.

PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974 to guarantee payment of basic pension benefits earned by about 42 million American workers and retirees participating in more than 44,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and investment returns.

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PBGC No. 00-12