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Irotas owners charged with theft

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Feds: They embezzled nearly $500,000 from pension fund

By Lisa King

Two Finchville residents are up on federal charges of embezzling nearly half a million dollars in employee benefits from a company they owned in Shelbyville.

Officials from the Office of the United States Attorney say that William Kiser, 73, and Mary Sue Kiser, 70, owners of the now-closed Irotas Manufacturing Company in Shelbyville, were indicted Thursday in federal court for conspiring to defraud the United States and embezzling from an employee benefit fund.

The indictment charges that the Kisers embezzled $487,138 from their employees’ profit-sharing plan during a 6-month period, from March through August, in 2008.

The Kisers owned Irotas, which had been located on Pearce Industrial Drive and closed down last year, officials of the Shelby County Industrial and Development Foundation said.

The last time the Kisers provided The Sentinel-Newswith a company profile was in 2009, when they listed the company as being established in 1977, being a manufacturer of printing cylinders, and employing 60 people. Bill Kiser was listed as the owner, with Sue Kiser given the title of personnel director.

The investigation preceding the indictment was conducted by the Department of Labor, said Kyle Edelen, spokesperson for the U.S. Attorney’s Office, who added that U.S. Attorney Kerry B. Harvey did not wish to comment on how the situation came to light.

“He typically does not comment on a case until sentencing,” Edelen said.

The Kisers could not be reached for comment, either. Phone numbers listed for family members in Finchville no longer were in service.

Edelen said he did not think they had retained an attorney.

The indictment document says that the Kisers were the sole owners of the company, for which they established a 401 (k) plan in 1980, of which they were sole administrators.

The indictment states that on Dec. 6, 2007, the Kisers transferred the plan’s funds into a checking account at Commonwealth Bank. Then, on March 24, 2008, they transferred the funds into a money market account in the company’s name at the bank.

Then, from June through August 2008, the indictment says the Kisers conspired with one another to commit offenses of “embezzling, stealing and unlawfully and willingly abstracting and converting to their own use, any of the moneys, funds and assets of any employee pension plan…resulting in a loss of $487,138.”

The indictment says that summer the Kisers took the following amounts from the plan:

On June 17, William Kiser transferred $129,376 to the (NTC) National Tube Supply Company, a supplier of raw materials for the company’s manufacturing process.

On July 8, William Kiser transferred $127,761 from the plan to the NTC.

On July 25, William Kiser withdrew $60,000 from the plan and deposited it in an Irotas checking that same day.

On July 31, William Kiser withdrew $60,000 from the plan and deposited it into an Irotas checking account the next day.

On Aug. 14, Mary Sue Kiser withdrew $110,000 from the plan and deposited it in an Irotas checking account that same day.

The indictment says the Kisers must forfeit to the government any property that they obtained through their scheme, including the money, $487,138.

Also, if they do not refund the cash, the court intends to “seek the forfeiture of any property in which the defendants have an interest in, up to the value of the currency described above.”

The penalties the Kisers could incur if found guilty include up to 5 years in prison, with 3 years supervised release, a $250,000 fine, criminal forfeiture of assets, a mandatory special assessment of $100 per count, and restitution, if applicable.

Shelbyville attorney John Robinson, who handles local bankruptcy cases, said he has not encountered a case involving Irotas.

The Kisers will be arraigned at the federal courthouse in Lexington on June 27 at 10 a.m. before federal judge Danny Reed.