Ex-Tennessee stock broker sentenced to 78 months in prison for embezzling $5.7 million from employee pension plan | USAO-MDPA

WILLIAMSPORT — The United States Attorney’s Office for the Middle District of Pennsylvania announced that Memphis, Tennessee-based former stockbroker John Sherman Jumper, 56, of Eads, Tennessee, has been sentenced to 78 months in prison followed by three years on probation by Chief District Court Judge Matthew W. Brann, for embezzling $5.7 million from the pension plan for employees of Snowshoe Refractories, a brick manufacturer refractories located in Clarence, Center County, Pennsylvania. CJ Brann also ordered Jumper to pay restitution to the pension plan in the amount of $2,426,550, reflecting partial financial recoveries obtained by Snowshoe Refractories on behalf of the plan.

According to U.S. Attorney John C. Gurganus, on April 9, 2021, Jumper forged signatures on fraudulent documents that allegedly authorized him to transfer pension plan funds three times between March 2015 and April 2016. Jumper used the funds misappropriated to make unauthorized loans and investments for the purchase of a tube mill in Arkansas and three other businesses, to repay $1.2 million of his personal loans and to cover his personal legal expenses . Additionally, Jumper received a personal interest in the businesses purchased with the embezzled pension funds, and his securities firm, Alluvion Securities in Memphis, received over $1 million in fees for the sale of the plant. of Arkansas tubing.

The indictment said the Snow Shoe Refractories Employee Retirement Plan for hourly employees included approximately 129 active and retired employees. At the time the alleged embezzlement of $5.7 million began, the pension plan assets were worth approximately $9.8 million.

As a result of his fraudulent misappropriation of pension funds, Jumper has been subject to civil and regulatory penalties obtained by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA), a private company that acts as than auto-entrepreneur. regulator of member brokerage firms and securities markets. On November 1, 2018, a federal district judge for the Western District of Tennessee granted the SEC’s motion for default judgment against Jumper, and the court entered final judgment regarding Jumper and its companies and businesses. The final judgment permanently barred Jumper from violating securities laws and ordered him to return $5,700,000, representing profits made as a result of the fraudulent conduct, plus prejudgment interest in the amount of $726,758.79. On February 3, 2017, FINRA permanently debarred him, with his consent, based on allegations that he misappropriated funds from the Snowshoe Pension Plan for his personal use and to inject capital into his member firm, Alluvion. Securities.

The matter was investigated by the Federal Bureau of Investigation, with assistance from the Employee Benefits Services Administration of the United States Department of Labor, the Financial Industry Regulatory Authority (FINRA) and the United States Securities and Exchange Commission. Assistant U.S. Attorney George J. Rocktashel prosecuted the case.

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