By: Scott Morgan
A Millstone businessman faces up to 10 years in state prison after being convicted in state Superior Court in Freehold Nov. 2 of bilking more than $600,000 from his employees’ pension program, the Monmouth County prosecutor’s office announced last week.
According to the prosecutors, Frank Knight, 55, president of Knight Contracting, was convicted of second-degree theft by a Monmouth County jury in Freehold on Nov. 2.
Prosecutors say Mr. Knight, over a period of 17 months, failed to deposit money withheld from his employees’ pension program into the fund. According to prosecutors, Mr. Knight established a pension program for his employees all of whom were required to participate in 1999, and designated himself as the sole trustee of the fund.
However, prosecutors said, Mr. Knight failed to deposit any of the money that he withheld from his employees from July 26, 2002 through December 20, 2003. During this period, he failed to deposit $606,762.37 of wages withheld from 122 employees, prosecutors said. Federal law required that the money be deposited into the pension fund within 15 days.
In March 2004, the U.S. Department of Labor opened an investigation when it received complaints from Knight Contracting employees and plan participants. In July 2004, the Monmouth County prosecutor’s office, Special Prosecutions Bureau, opened a separate investigation after receiving complaints from several current and former employees.
Mr. Knight was indicted on Aug. 8, 2005 by a Monmouth County grand jury on a charge of second-degree theft by failure to make required disposition.
At his trial, which ran from Oct. 31 to Nov. 2, Mr. Knight contended that he failed to make the pension fund payments because he was never paid for change order work performed on a contract for the New Jersey School Construction Corp., prosecutors said.
However, public records revealed that he received $6,552,548.24 in payments from the New Jersey School Construction Corp. between October 2001 and April 2004. This included $1,841,271.24 on the disputed Camden contract. While Mr. Knight has made direct payments to 10 of the plan participants, the USDL has determined that the pension plan is still underfunded by approximately $560,771, prosecutors said.
In a written statement, Monmouth County Prosecutor Luis A. Valentin said Mr. Knight "not only violated his employees trust and the fiduciary obligation that he owed to them, but he committed an egregious theft of the employee retirement benefits."
Mr. Valentin stated that his office would pursue the maximum penalty, which is 10 years in state prison.
Sentencing has been scheduled for Feb. 16, 2007.

