Federal employees indicted in retirement fund theft

A grand jury indicted a federal employee and four others on Monday in connection with the embezzlement of more than $2.8 million from a government pension fund.

The indictment on multiple counts of theft and conspiracy alleges that Agatha Malloy, a retirement benefits specialist at the Office of Personnel Management, funneled money from the civil service retirement trust fund to three Maryland residents who were not entitled to the benefits. The three residents then allegedly gave some of the money back to Malloy-who has worked at OPM for 22 years and is also known as Agatha Cobey-and transferred a portion to Anita Cary, a former OPM employee who retired in January 2002.

The embezzlement scheme unfolded over a seven-year period ending in December, according to a statement from the U.S. attorney's office in Greenbelt, Md. Investigations by OPM's inspector general and the FBI led to Malloy's arrest in mid-December.

OPM ordered the investigation after being told of apparent thefts in the Office of Retirement and Insurance Services. OPM Director Kay Coles James said in a statement that she is pleased the investigation resulted in arrests, but hopes the "misdeeds of a few" will not "tarnish the image of hundreds of thousands of honest and hardworking federal employees."

As a result of the incident, OPM has started to implement better safeguards and stringent quality controls to make sure that the retirement fund is protected, she added.

If convicted of conspiracy, the suspects will face a maximum of five years in prison. The maximum penalty for theft is 10 years in prison. Both crimes also carry fines.