ARGYLE, Texas — Agents with the FBI arrested Denton County Emergency Services District No. 1 Fire Chief Mac Hohenberger after he allegedly stole money from the fire department's pension fund, sources told WFAA.
According to sources, officers were waiting for Hohenberger at DFW Airport, where he was returning from Las Vegas.
Sources added that FBI authorities were at an Argyle fire station earlier Thursday, looking for evidence related to the theft of pension funds.
Hohenberger appeared in court Friday, where he pleaded not guilty to all the charges he's facing. He was then released by the judge on his own recognizance. The judge said a new court date will be scheduled in January.
Argyle Mayor Bryan Livingston said he is "shocked and dismayed something like this is going on in Argyle."
Livingston stressed that Station 511, or Denton County ESD No. 1, is not under the jurisdiction of the city of Argyle.
However, Hohenberger has been with the Argyle Fire District since 1991 and was promoted to chief of the volunteer fire department there in 2000.
Argyle Professional Fire Fighters released a statement following Hohenberger's arrest, stating they have strongly supported an independent investigation of allegations that the retirement funds were mismanaged.
"We are monitoring today’s developments with federal investigators and local law enforcement officials; and we look forward to finding answers to the troubling questions raised by this matter," the statement reads.
Hohenberger became District No. 1 Fire Chief after merging with the county.
A lawsuit was filed a year ago against Denton County ESD No. 1, where Hohenberger served as chief, and against Hohenberger himself by a former engineer with the district, Harold "Trey" Ring.
The suit stated Hohenberger maintained all of the department's finances, leading to problems like employees not being paid for several days after payday. He was also the sole administrator of the department's 401(k) plan.
The suit stated that this 401(k) plan held at least $3,478,428 in assets, with about 33 beneficiaries. Hohenberger had been listed as the plan administrator since at least 2010.
"As the 401K’s administrator and as AVFD’s sole financial manager, Hohenberger removed funds from each employee’s paycheck for the purposes of putting the funds in the individual employee’s 401K accounts," the suit stated.
"However, Hohenberger failed to maintain a habit and practice of properly and timely moving these funds to the employees’ individual accounts or timely providing AVFD’s matching funds."
A class-action certification hearing was supposed to be held Thursday in connection to the lawsuit but was postponed due to a "scheduling conflict."
Ring's legal counsel said if certification were granted, an outside auditor could review the 401(k) fund for any alleged financial impropriety.
A job posting on Denton County ESD ESD No. 1 shows the department is hiring for a new fire chief and stated Hohenberger retired after 30 years with the district.
Whistleblower comes forward
Ring filed his lawsuit against Hohenberger and the county in November of 2021.
The lawsuit, per court documents, was sparked by Ring's termination in April of 2020, which attorneys believe was for bringing up financial irregularities with his 401(k) account to Hohenberger.
Per court documents, "Sometimes payments were delayed for up to a month, and then an apparent catch-up payment was made. Sometimes payments were made in the wrong amounts. Sometimes the payments were too small, and sometimes they were too large."
When Ring confronted Hohenberger with questions, Hohenberger became enraged, per the suit, and loudly told Ring to "Mind your own f***ing business."
Ring's lawsuit also holds another major allegation surrounding the 401(k) fund stating, "there have been multiple times when beneficiaries have been marked as deceased, but no such death of a firefighter has occurred, nor has there been any recognition of a prior member of the AVFD passing away."
Ring's attorney, Eric Roberson, also alleges in his suit that evidence collected by his firm shows at least 18 payments for his client and other firefighters were missed from 2017-2020 prior to COVID.
"Defendants are wrong about their errors or wrong about fixing them," Roberson wrote.
Hohenberger's Response
Three days before his arrest, an attorney for Hohenberger and Denton County Emergency Services District No. 1 filed a response to Ring seeking class-action certification.
The response states that "401(k) payments were accurate and never missed."
Attorneys for defendants do admit that two months of 401(k) payments were missed due to financial burdens from COVID.
However, they also add that any issues were eventually cleared up.
"Fidelity undertook an analysis of each participant’s account for the time period from 2018 to September 2021 and informed Hohenberger that it used a DOL standard to calculate any effects of delays on each participant’s investments. The net result following that review was that any negative effect was remedied, and any shortfalls were paid by AVFD into the participant accounts, which Fidelity determined had been adversely affected by any delay, on the basis of their positive interim investment performance," attorney Lawrence McNamara wrote.
McNamara added that "AVFD’s accounting firm annually has compared participants’ paycheck deductions for 401k contributions with the sums transferred to Fidelity, and it has found no deficiencies."
"No 401(k) Plan participant has informed Hohenberger that he/she suspects any deficiencies or anomalies relating to their 401k account."