MARION, OH – John Richard Blazer, 68, of Marion, Ohio, walked away with a lenient sentence – probation and a $2,800 fine – after admitting to a calculated scheme to siphon funds from a company 401k plan. The conviction, handed down by Senior U.S. District Judge James G. Carr, reveals a blatant disregard for the financial security of hardworking employees at Neo-Wood Manufacturing, Inc., in Alvada, Ohio.
According to court documents, Blazer, in concert with Neo-Wood owner John E. Werner III, orchestrated a series of fraudulent transactions beginning around January 28, 2008. Blazer allegedly induced Werner to remove $28,000 from the employee 401k plan and transfer it directly to him. While a portion – $25,200, or 90% – was eventually kicked back to Werner, Blazer pocketed the remaining $2,800 as illicit profit. This wasn’t an isolated incident; prior to this scheme, Blazer had already secured a total of $140,000 in funds from the same 401k plan through similar maneuvers.
The pair then attempted to cover their tracks. On April 30, 2009, Werner submitted a Form 5500 to the U.S. Department of Labor, falsely reporting that the $28,000 remained as an asset within the plan. Crucially, the form omitted any mention of the prohibited transaction involving the transfer of funds to Blazer and then, partially, back to Werner. The scheme effectively left the 401k plan virtually empty, jeopardizing the retirement savings of Neo-Wood employees.
Federal prosecutors, Assistant U.S. Attorneys Thomas Karol and James V. Moroney, built a case against Blazer, revealing the full extent of the fraudulent activity. Fortunately, before entering a guilty plea, Blazer agreed to pay $221,649 in restitution to the custodian of the Neo-Wood plan, effectively restoring almost all of the improperly removed funds to the employee 401k accounts. While the restitution offers some relief, the lenient sentence raises questions about accountability for those who prey on the financial futures of working Americans.
The investigation was led by the Employee Benefits Security Administration of the U.S. Department of Labor, highlighting the agency’s commitment to protecting employee benefit plans. The case serves as a stark reminder of the vulnerability of these plans to internal fraud and the importance of rigorous oversight. While Blazer has been ordered to pay a fine and serve a term of probation, the damage to employee trust and the potential loss of retirement savings remain a significant consequence of his actions.
U.S. Attorney Steven M. Dettelbach announced the sentencing, signaling a commitment to prosecuting those who violate ERISA regulations. However, critics may argue that a term of probation and a relatively small fine are insufficient penalties for a crime that directly impacts the financial well-being of hardworking individuals. The case of John Richard Blazer is a sobering example of how easily 401k plans can be exploited and the challenges of securing justice for those affected.
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Key Facts
- State: Ohio
- Agency: DOJ USAO
- Category: White Collar Crime
- Source: Official Source ↗
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