Minnesota Biz Owner Stole More Than $755,000 from Employees: Feds

United States Attorney Andrew Luger announced Monday an indictment charging Wallace David Gregerson, 65, of Plymouth, for operating an embezzlement scheme to defraud his employees and steal more than $755,000 from their pension plans. Gregerson was the president and sole owner of Lighting Affiliates, Inc. (“Lighting Affiliates”), a corporation based in Golden Valley that sold lighting fixtures and related products.

According to the indictment and documents filed in court, Gregerson used his position to withdraw funds from his employees' pension plans and deposit those funds into Lighting Affiliates bank accounts.

According to the indictment and documents filed in court, Gregerson used the majority of the funds to either pay for Lighting Affiliates’ expenses or for personal expenses such as country club membership dues, sports tickets, clothing purchases, and tuition payments on behalf of his daughter.

The Lighting Affiliates 401(k) Profit Sharing Plan was established as an employee benefit for eligible employees’ retirement savings, according to a news release. The plan was funded by three types of contributions: voluntary salary reduction 401(k) contributions the Lighting Affiliates employees had deducted from their paychecks; 401(k) matching contributions made by Lighting Affiliates; and profit sharing contributions made by Lighting Affiliates, according to a news release.

Between February 2011 and July 2013, Gregerson drained the profit sharing portion of the plan by withdrawing a total of approximately $675,233.55, and drained his former employees’ individual 401(k) accounts by withdrawing a total of approximately $80,667.23, according to police.

According to the indictment and documents filed in court, as part of the scheme, Gregerson persuaded the financial institutions holding the Plan’s assets to provide him with funds belonging to the Plan and its participants by making false representations. Gregerson provided written statements falsely affirming that the funds would be re-invested in another qualified plan or that the withdrawals were at the employee’s request, according to the charges.

The case is being prosecuted by Assistant United States Attorney Kimberly A. Svendsen. This case is the result of an investigation conducted by the U.S. Department of Labor Employee Benefits Security Administration and the U.S. Department of Labor Office of the Inspector General.

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