“The DOL concluded that Knowlton had deposited over $311,000 of the Plan’s cash into Ascent’s checking accounts and then used it to pay Ascent’s business expenses.”

💡 This shows the CEO directly transferred retirement money into corporate accounts for business use rather than preserving it for employees.

“The investigation also revealed that a former Ascent employee had requested—but never received—a distribution from his retirement account, even though the Plan’s custodian, AllianceBernstein, had issued a distribution check at Knowlton’s request.”

💡 This proves an employee was denied his retirement money even though the custodian sent the funds at the trustee’s direction.

“Knowlton admitted that Ascent had only two to three remaining employees, and former employees reported that Ascent was no longer operational.”

💡 This establishes the company was essentially defunct when the CEO allegedly diverted retirement funds to cover expenses.

“Although the investigation up to this point put Knowlton on notice about the earlier unlawful handling of the Plan’s funds, in April 2023 he contacted AllianceBernstein and asked to withdraw the remainder of the Plan’s cash, which Knowlton estimated to be around $130,000, and to close the account.”

💡 This shows the CEO tried to take the last of the retirement money even after being investigated for misusing plan assets.

“AllianceBernstein relayed this request to the DOL, which in turn asked AllianceBernstein to freeze the account.”

💡 Only direct intervention by federal regulators stopped the complete liquidation of employee retirement funds.

“The DOL then filed this action, alleging that Knowlton and Ascent had violated ERISA’s fiduciary-duty standard and prohibited-transaction rules.”

💡 The government formally accused defendants of breaking federal laws designed to protect employee retirement money.

“Moreover, Ascent and Knowlton were then being sued by an insurance company, which later obtained a $26 million dollar judgment against them.”

💡 This massive judgment shows the extreme financial pressure that may have motivated the alleged retirement fund diversions.

“In a later order, the district court concluded that defendants willfully failed to engage in the litigation process and comply with the court’s orders, prejudicing the DOL and interfering with the judicial process.”

💡 The court found defendants deliberately refused to participate in their own defense, obstructing justice.

“And as warned, it entered a default judgment against defendants under Federal Rules of Civil Procedure 16(f)(1)(C) and 37(b)(2)(A)(vi) in the amount of $288,873.64.”

💡 The court imposed nearly $289,000 in damages against defendants for their ERISA violations and litigation misconduct.

“It also entered a permanent injunction that superseded the preliminary injunction at issue in this appeal, permanently barring Knowlton and Ascent from serving, respectively, as trustee and administrator of the Plan.”

💡 The CEO and company are now permanently banned from controlling any aspect of the employee retirement plan.

“It also entered a permanent injunction… authorizing the appointed fiduciary to terminate the Plan and commence a claim-submission process.”

💡 The court gave an independent fiduciary authority to wind down the retirement plan and process employee claims for their missing money.

“In its complaint, the DOL requested… an order offsetting Knowlton’s individual account balance against any amounts owed for his and Ascent’s breach of their fiduciary duties to the Plan’s participants.”

💡 The government asked to take money from the CEO’s own retirement account to compensate the plan for his alleged theft.

“We dismissed defendants’ separate appeal of the default judgment and permanent injunction for lack of prosecution.”

💡 Defendants filed an appeal but then abandoned it, showing their litigation strategy was to delay rather than defend.