DOWNTOWN ‚Äî The former Santa Monica-based publisher of Starscroll, which provided horoscopes in five languages for decades before going under in 2009, has agreed to pay back money he took from the company‚Äôs pension plan to help cover payroll and other operating expenses, federal officials said Tuesday.
Richard Housman of Twelve Signs Inc. mismanaged the pension assets resulting in $617,389 in losses. A consent judgment secured by the U.S. Department of Labor requires Housman to restore all losses, less his share, which amounts to $363,913.
The pension plan was provided by Housman as a benefit and no employee contributed to it out of their own pockets, he said.
Housman, acting as the sole fiduciary to the pension plan, violated the Employee Retirement Income Security Act, federal officials said.
“Workers should not have to worry about whether their pension funds are secure in the hands of their pension plan‚Äôs fiduciaries,” said Ty Fukumoto, deputy director of the labor department‚Äôs Employee Benefit Security Administration, Los Angeles Regional Office, which investigated the case.
“Pension plans help those who have worked and saved to remain secure long after they leave the workforce,” he added. “To ensure funds are there, the department holds those entrusted with looking after workers‚Äô retirement savings to the highest legal standard.”
To ensure repayment, Housman must attempt to secure a life insurance policy that provides no less than $150,000 and names the plan as the sole beneficiary. Housman will no longer serve as the plan‚Äôs fiduciary and is permanently enjoined and restrained from future service as a fiduciary of, or service provider to, any federally-covered employee benefit plan.
Receivership Management Inc. will manage the plan.
Housman must also report his financial status annually to the department until the plan losses are fully recovered.
Twelve Signs was a private corporation incorporated in California in 1967, which published the print magazine Starscroll. The company ceased operating in 2009 and filed for bankruptcy protection in January 2010.
For many, Starscroll was their first introduction to astrology. The publication could be found in small grocery or liquor stores and was distributed overseas, Housman said. It was the most widely read monthly astrology magazine in the world, according to acclaimsubscriptions.com
Federal officials said more than a dozen employees were impacted by Housman, who made 41 separate loans totaling $496,000 from the plan to the company, officials said. The loans, which were not repaid, were used to cover operational expenses, including payroll. The plan also lost $122,000 in estimated interest, which Housman had guaranteed to be included upon repayment of the loans.
Housman said Starscroll closed because of a “distribution problem” and competition from the Internet.
“It‚Äôs a sad story,” he said.