Union Pension Manager Gets Light Sentence for Kickbacks

A N.Y. pension fund consultant received a lighter-than-requested sentence for paying kickbacks to a union pension trustee without performing any services for the two funds involved.

The U.S. Attny. for the Dist. of Mass. had requested a sentence of one year, six months for George W. Philipps, ex-president and owner of Pension Fund Evaluations, Inc. (PFE) in Centerreach, NY. But U.S. Dist. Judge Nancy Gertner (D. Mass., Clinton) sentenced Philipps to two years probation on Oct. 10 for his role in a scheme carried out with William V. Close, then a trustee of the pension funds of Intl. Bhd. of Teamsters Local 710 and Intl. Assn. of Machinists Local 701, both based in Chicago.

On Feb. 6, 2002, Philipps admitted to paying kickbacks totaling $55,000 to Close between Sept. and Nov. 1997. In return for the payments, Close used his influence to cause the two funds’ investment mgr., Fiduciary Mgmt. Associates, to execute the funds’ asset trades through PFE brokers. Philipps’ firm then agreed to let the brokers keep 70% of the commissions. At Philipps’ sentencing, the U.S. Attny. argued that PFE did nothing to earn its commissions other than pay kickbacks to Close, the trustee. [U.S.A.O. D. MA  10/15/02]