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Two former trustees plead guilty to providing illegal loans to scheme employer

Two former trustees plead guilty to providing illegal loans to scheme employer

Andrew Kyprianou and Colin Werb were trustees of the Eastman Machine Company Limited Superannuation Scheme. They were also employees of the scheme employer, Eastman Staples Limited. 

The Pensions Regulator (TPR) has brought successful prosecutions of the former trustees, who pleaded guilty to two counts of making prohibited employer-related investments, on 17 August 2022 at Leeds Crown Court. They had initially pleaded not guilty to all charges. 

The former trustees had unlawfully facilitated payments to the scheme employer. These payments amounted to £236,000 having been paid in the form of two loans, the first being in 2017 (£96,000) and the second in 2018 (£140,000). Such loans are prohibited by s.40 of the Pensions Act 1995 and the Occupational Pension Schemes (Investment) Regulations 2005. Breach of s.40 is a criminal offence and can lead to an unlimited fine and/or imprisonment. 

They were also charged with providing false or misleading information to TPR. It is alleged that in breach of s.80 of the Pensions Act 2004, the former trustees fabricated minutes of trustee meetings with a view to disguising the loans as investments. These charges will lie on file. 

TPR replaced the defendants, as trustees of the pension scheme in December 2020, with Pi Consulting Trustee Services, who are independent professional trustees.  

Sentencing is due to take place on 7 October this year, at Leeds Crown Court.

Pensions

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We will help you find an appropriate solution for documentation, re-designing benefit structures or managing auto-enrolment. We work alongside our employment, corporate, banking and restructuring teams to ensure you get a complete pensions service.