Financial Coup d’Etat & Your 401(k)

[Omaha Steve]

http://themancommon.blogspot.com/2009/01/financial-coup-detat-your-401k.html

Catherine Austin Fitts

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In 1997, I had approximately $500,000 of assets sitting in a 401(k) at T. Rowe Price. The funds represented a portion of the money I saved while working on Wall Street. After I left the Bush Administration, I used these funds, along with the proceeds of the sale of my house, to start a company called the Hamilton Securities Group.

It was not long before Hamilton Securities was successful and repaid my 401(k) the funds that had given it life.

A few years later, the federal loan sale program for which Hamilton served as financial advisor was the target of a highly politicized “investigation” by the federal government. A new Housing Secretary was eager to assist the Federal Reserve and Treasury in engineering a housing bubble: honest people had to go.

After a year of beating back false allegations, the government put my 401(k) under audit. My company’s chief financial officer and I looked at each other and said, “Uh-oh.” Somebody was trying to prevent me from borrowing the money.

Sure enough, a few months later the U.S. Department of Housing and Urban Development (HUD) created a pretext to withhold monies owed to Hamilton and demanded several hundred thousand dollars of contract close-outs. Our bank received anonymous tips which persuaded them to pull our credit line. Our insurance company breached its obligation to fund our attorneys. And (surprise, surprise) our auditors said that the audit meant I could not arrange a loan from my 401(k) to Hamilton Securities. We were to learn in time that the auditors were quite dirty in the affair.

Fearless by nature, I closed out my 401(k) without blinking an eye, paid $225,000 in taxes and penalties, and loaned the remaining money to Hamilton Securities for contract compliance and legal expenses. I hired an excellent attorney on contingency and sued the federal government for the monies owed.

And we eventually won.

FULL story at link.

[Skink]

1. Shouldn't tax exempt 401k's be used for retirement.?

Instead of a tax shelter.