The onetime operator of a Golden Valley lighting fixtures company has been sentenced to prison and ordered to make restitution for stealing more than $750,000 from his employees’ retirement plans and using some of that money for country club dues and other upper-class comforts.
Wallace D. Gregerson, 66, was sentenced in federal court in Minneapolis to 3½ years in prison after pleading guilty in March to mail fraud.
“Over the course of several years, Wallace Gregerson stole from his own hardworking employees, some of whom had decades-long careers with the company,” Acting U.S. Attorney Greg Brooker said in a statement announcing the punishment. “Mr. Gregerson ended his fraud scheme only because there was no more money to steal.”
A man who worked 28 years for Lighting Affiliates told authorities that Gregerson’s stealing pushed back his and his wife’s retirement by eight to 10 years, the prosecution pointed out in its presentence court filing.
Gregerson, who lived in Plymouth at the time of the thefts and now resides in Duluth, pointed out in his presentence argument that the nation’s economic downturn in 2008 and a business deal that went awry contributed to him using some of the pension plan money to try in vain to prop up his company.
“Although I put most of the money back into the company to try to keep the company afloat and keep [the employees’] jobs, that is an excuse and does not justify my illegal behavior or the harm I have caused,” Gregerson wrote in the defense filing.
The company’s 401(k) Profit Sharing Plan was funded by three types of contributions: employees’ own 401(k) contributions that were deducted from paychecks; 401(k) matching contributions made by the company; and profit-sharing contributions made by the company.
Gregerson also used some of the money to buy tickets to sports events, meet youth sports sponsorship obligations, buy men’s clothing and cover tuition payments for his daughter, according to prosecutors.
He duped the financial institutions holding the plans’ assets — U.S. Bancorp, Charles Schwab and Wells Fargo — to provide him with the money by pledging that he was reinvesting in another qualified plan or that the withdrawals were at the employee’s request.