Ex-owner of Poconos resort ordered to pay back former employee pensions

SCRANTON Pa. Tue Sep 2, 2014 4:53pm EDT

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SCRANTON Pa. (Reuters) - A federal judge on Tuesday ordered a former honeymoon resort owner in Pennsylvania's Pocono Mountains to pay more than $2 million for illegally dipping into his employees' pensions.

Charles Poalillo Jr. was also given three years' probation but avoided prison time under the sentence handed down by U.S. District Judge Edwin Kosik.

Poalillo, 80, the former owner of Penn Hills Lodge in Analomink, in northeastern Pennsylvania, had faced the possibility of up to five years in prison.

He suffers from dementia, according to his attorney. He did not speak at his sentencing.

Poalillo pleaded guilty in September 2013 to charges of filing false statements and concealing facts in documents involving the resort's profit-sharing and pension plans.

He was trustee for his employees' plans but borrowed about $1 million from them, prosecutors said.

The judge ordered Poalillo to pay about $300,000 and relinquish his interest in two pension plans for himself that total more than $2 million in restitution to his former employees, said his attorney, George Westervelt Jr.

Most of the money will go to reimburse 11 long-term former employees and to rebalance the pension plans, he said.

Twenty-six other former employees who did not work at the resort long will each receive $1,000 or less, he said.

The former resort owner is "embarrassed, sorry and remorseful," Westervelt said in a written statement attributed to his client.

Poalillo never intended to harm his workers and had planned to repay the money, his attorney said.

The resort, once popular in the honeymoon vacation market, fell into disrepair and closed about five years ago.

(The story is refiled to fix headline)

(Editing by Ellen Wulfhorst and Peter Cooney)

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