Matthew Hutcheson, an Idaho independent fiduciary who advises companies on retirement plans and has testified before Congress, pleaded not guilty to charges that he took more than $2 million from a fund he oversaw and spent it on himself and his family.
Hutcheson, 41, used the money to remodel his house in Eagle, Idaho, build a 4,100-square-foot barn, a swimming pool, a hot tub and a dog house, according to an indictment filed in federal court in Boise on April 10. He also bought a BMW convertible and a Land Rover.
Hutcheson, indicted on 31 counts of wire fraud and theft, entered a not guilty plea yesterday. Before his arrest, he was a critic of 401(k) managers and trustees who don’t act in the best interests of their clients.
“The fiduciary duty is the highest duty known to the law,” Hutcheson said in testimony before the House Ways and Means Committee in October 2009. As an independent fiduciary, Hutcheson helped manage company retirement plans, picking investments and monitoring their operations.
Hutcheson was arrested at about 7 a.m. on April 11, said his lawyer, Dennis Charney. He spent one night in jail and was released without bail.
“He was treated very differently than other people in similar cases,” said Charney. “We deny that any investor funds were used for personal gain.”
In addition to the $2 million he allegedly took for personal use, Hutcheson also used $3 million from another 401(k) fund to buy a mortgage note on the golf course at Tamarack Resort, near McCall, Idaho, according to the indictment.
Hutcheson had founded a company, Green Valley Holdings, to try to purchase all of struggling Tamarack. The resort defaulted on a $250 million loan in December 2007, and the founders sought bankruptcy protection.
Hutcheson misrepresented the purchase, telling the retirement plan’s administrator that the golf course note was a one-month transaction, and that it would be done in the name of the plan participants, according to the indictment.
Instead, he bought the note in the name of Green Valley Holdings. Later, he used the note as collateral to borrow $425,000 from a private lender in Virginia. That lender then held first lien on the property, according to the indictment.
Hutcheson’s bid for all of Tamarack collapsed.
Hutcheson didn’t violate any laws by using investors’ 401(k) funds to buy the mortgage note on the golf course at Tamarack Resort, Charney said.
“He saw a golden opportunity to buy a note at a fraction of its value, backed by an asset that was worth ten times what he paid,” Charney said.
The case is U.S. v. Hutcheson, 12-00093, U.S. District Court, District of Idaho (Boise).