Five years after mounting debt ended his family's near 100-year run as the country's oldest manufacturer of paper box machinery, Hugh “Bud” McAdam III, former chief of International Paper Box Machine Co. was sentenced to one year of probation Wednesday, for embezzling more than $200,000 from the company pension fund.
Don Dube, 66, of Nashua, an IPBM employee for almost 40 years and one of about 75 employees who were stiffed on their last paycheck when the company folded in 2002, was in U.S. District Court in Concord to see his former boss get sentenced.
McAdam, of 106 Pepperell Road in Hollis, pleaded guilty in November to embezzlement and theft from an employee pension fund during the period of July 2001 through February 2002.
The great grandson of Elie Labombarde, who started IPBM in Nashua in 1903, McAdam admitted that while acting in his role as company president and trustee of the company's Salary Deferral Retirement Plan, he held back more than $350,000 in contributions and loan repayments to the employee pension benefit plan, using the money for general operating expenses instead.
The company closed Feb. 8, 2002, without paying its 72 workers in Nashua for their last two weeks of work. The company filed for bankruptcy and was later liquidated after which employees discovered that their 401(k) contributions had gone missing.
A U.S. Department of Labor civil lawsuit ensued, with McAdam and his wife named in the suit, but it was later dropped when Chubb Insurance, IPBM's insurance company, paid the missing $346,706 to Fidelity Investments, the company that handled the pension accounts.
The misappropriated funds included $202,850 in employee contributions, $87,486 in matching company funds, and $56,370 in participant loan repayments.
Although McAdam faced a possible five-year prison sentence, First Assistant U.S. Attorney Joseph Laplante said federal prosecutors recommended the probation sentence that DiClerico ultimately imposed.
Sentencing McAdam to jail also would have hindered his ability to pay restitution and would have complicated his duties as administrator of the various employee funds, Laplante said.
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