Court Approves $7.8M Settlement with AA Capital Partners

<span>June 22, 2010 (PLANSPONSOR.com) - </span><span>The U.S. District Court for the Northern District of Illinois has approved a global settlement agreement providing for recovery of an additional $7.8 million for the pension plan clients of AA Capital</span><span> Partners</span><span>.</span>
Reported by Rebecca Moore

A Department of Labor news release said the money will be restored by the investment firm’s insurance providers, Indian Harbor Insurance Co. and Federal Insurance Co.  In a separate consent order entered into with the DoL, the defendants are barred from serving as fiduciaries or service providers to any employee benefit plan subject to the Employee Retirement Income Security Act (ERISA).   

John Orrechio, the former president of AA Capital Partners, was sentenced to nine years and four months in prison after pleading guilty in a related criminal case to theft of approximately $24.2 million in assets from pension plan clients and wire fraud (see Adviser Who Misused Pension Funds Sentenced to Nine Years).  

Last August the DoL obtained a consent judgment and order requiring Orrechio to restore $50 million in losses to five Michigan pension funds as restitution for the misuse of the plans’ assets (see Former AA Capital Partners President to Pay $50M to Pension Funds).
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