The Securities and Exchange Commission has banned a California adviser who admitted to stealing more than $1.2 million from a pension plan he established for employees of his own RIA.
David Bonuccelli, 68, led the independent real estate consulting and RIA firm David L. Bonuccelli & Associates in Sacramento from 1996 to 2021. The company sponsored retirement plans for its employees, including a benefits pension plan defined for which Bonuccelli was the sole administrator. It is not known how many people were employed by the company.
In August 2017, Bonuccelli was charged with one count of theft or embezzlement of benefits plan funds, a Class D felony that carries a maximum sentence of 5 years in prison. He was also charged with four counts of making a false statement or concealing facts relating to documents required under the Employees Retirement Income Security Act of 1974 (ERISA).
The indictment revealed that in 2012, Bonuccelli withdrew approximately $517,000 from his company’s defined benefit pension plan. Later that year and throughout 2013, he repeatedly misrepresented the plan’s total assets and lied about the occurrence of non-exempt transactions on the documents required under ERISA. ‘he filed with the Department of Labor,’ the indictment says. He also created documents falsely documenting the withdrawal as a loan.
The court later found that Bonuccelli made unauthorized transfers totaling $1,243,154 from the retirement account between 2011 and 2014.
Bonuccelli pleaded guilty without contest to the theft. The court dismissed the other charges.
“No one was financially harmed”
Court documents filed by Bonuccelli’s defense characterize the theft as an illegal attempt by Bonuccelli to manage the cash flow fluctuations that accompanied his business model.
Beginning in 2001, the public pension fund California State Teachers’ Retirement System, or CalSTRS, became Bonuccelli’s main client. His firm did not deal with benefits for retired teachers, but rather provided advice on equity investments and real estate debt for the fund. Since the majority of the company’s business came from CalSTRS, it did not receive regular payments. The fund routinely took “between 90 days and 18 months” to pay Bonuccelli, according to a sentencing memorandum filed by the defense. As a result, Bonuccelli began “borrowing” from his company’s defined benefit pension plan to fund payroll and other corporate expenses. He will later “repay” the funds when he receives checks from CalSTRS, the memorandum says.
Moreover, the defined benefit pension plan was not the only pension plan offered to the company’s employees. In 2007, Bonuccelli had frozen the defined-benefit plan due to high costs and instead set up a profit-sharing plan for him and his employees. Since pension plan money could not be paid out until an employee retired, Bonuccelli treated it as a temporary line of credit.
The memorandum, which argued for excluding prison time from Bonuccelli’s sentence, continues: “Mr. Bonuccelli definitely did not deprive anyone of his funds. He never intended to harm anyone financially, and no one was ultimately financially harmed by his actions as he repaid all borrowed money.
The court ultimately sentenced Bonuccelli to “time served”, referring to the time he had already spent in custody pending sentencing, plus 16 months of supervised release. Bonuccelli was also ordered to pay mandatory restitution of $10,922.
Bonuccelli’s business closed in 2021, but not before he received two separate coronavirus-related PPP loans of $25,470 and $11,372, respectively, which he would have used for payroll. Curiously, the business was flagged as a “woman-owned business” in the loan information.
Today, Bonuccelli works as a consultant for Security Contractor Services, a security fencing company, according to court documents.