News Brief

US Department of Labor obtains emergency court order to protect retirement plan assets; alleges Pittsburgh company, owner embezzled over $5.5M from plans

Date of action: February 5, 2024

Type of action: An emergency temporary restraining order issued by the U.S. District Court for the Western District of Pennsylvania in Pittsburgh, Pennsylvania. The action follows a complaint and motion filed by the U.S. Department of Labor on January 26, 2024.

Defendants: RiversEdge Advanced Retirement Solutions LLC, a Pennsylvania company                                                                                     Paul Palguta, an individual

Background: RiversEdge is a third-party administrator of at least 240 retirement plans that hold millions of dollars in plan assets and acts as an agent to manage and administer plan assets. At least 229 of these retirement plans are covered by the Employee Retirement Income Security Act of 1974.

An investigation by the department’s Employee Benefits Security Administration determined that RiversEdge Advanced Retirement Solutions LLC and its owner Paul Palguta violated ERISA. EBSA alleges that from October 2022 through January 2024, the defendants embezzled at least $5.5 million in retirement plan assets from 17 retirement plans by transferring them from retirement plan trusts into their own corporate accounts.

EBSA additionally found that the defendants allegedly attempted to conceal the embezzlement when they issued fraudulent account statements to the retirement plans causing them to file false reports with the department that overstated the amount of assets in the trust accounts. When retirement funds lacked sufficient assets to process transactions, the defendants transferred plan assets from other trusts to cover the shortfall.

Relief: The temporary restraining order obtained by the department:

  • Forbids the defendants from any further involvement with trust assets.
  • Enjoins them from serving as fiduciaries or service providers to any ERISA plans.
  • Forbids the defendants from withdrawing any funds from their two corporate accounts into which they had illegally transferred the plan assets, except court-ordered payment of  independent fiduciary fees.
  • Requires the defendants to preserve all relevant records for the purpose of transferring to an independent fiduciary appointed by the court.
  • Requires the independent fiduciary to oversee an accounting of the 17 mismanaged plans.

In addition to the temporary restraining order, the department is pursuing litigation seeking a permanent injunction and order that requires the defendants to restore the missing plan assets to the retirement plans and forbids them from serving as fiduciaries to any plan in the future.

Affected plans to the above action may have standing to participate in this proceeding presently pending, including the injunctive relief being requested. Affected plans should immediately consult with legal counsel to obtain advice and make decisions relative to your interests. 

Quotes: “The U.S. Department of Labor will take emergency legal action when fiduciaries violate the law by embezzling retirement plan assets,” said Acting Regional Solicitor of Labor Samantha Thomas in Philadelphia. “The department is determined to protect the assets of employee benefit plans and to hold fiduciaries responsible for failing to discharge their legal duties to protect these assets.”

“We will act vigorously to protect plans from a service provider who violated the trust of plan participants by intentionally breaking the law,” said EBSA Regional Director Cristina O’Brien in Philadelphia.

Su v. RiversEdge Advanced Retirement Solutions, LLC., a Pennsylvania company; Paul Palguta, an individual.

Case No.: 2:24-cv-00104

Employee Benefits Security Administration
February 6, 2024
Release Number
Media Contact: Joanna Hawkins
Media Contact: Leni Fortson
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