A statewide grand jury has indicted a financial adviser, alleging he fraudulently transferred $1.6 million of his clients' money out of Colorado PERA's 401(k) plan so he could get management fees for it.

According to the indictment, Gordon Robert Moore, a former employee of AXA Equitable Insurance Co., forged documents to say his clients had terminated their employment and were eligible to roll over their money to a new account.

Money can't typically be transferred out of a 401(k) unless investors are retirement age or have left their jobs.

The indictment claims Moore submitted the forged documents to CitiStreet, the company that manages PERA's 401(k) plan. He then logged on to the PERA Web site to request a withdrawal check. The money would then be put into his clients' accounts at AXA.

The indictment charges Moore, 30, with 45 counts that include theft, forgery and computer crimes for acts between July 2004 and June 2007. It claims Moore made $102,805.86 in commissions on the transfers and the subsequent investment gains.

Moore, reached Tuesday night, said his attorney had advised him not to comment.

PERA, the Public Employees' Retirement Association, is a defined-benefit plan with more than 400,000 active, retired and inactive members.

It's the primary provider of retirement funds for state employees, school workers outside Denver and many other government workers.

The vast majority of its $40 billion in assets are for its defined-benefit plan, which pays retirees a set amount each month. But about $1.5 billion of its assets are in its 401(k) defined-contribution plan, in which 73,000 workers set aside a portion of their pay and retain the right to take it with them when they switch jobs.

PERA staff members found the problem in April while examining some of the 401(k) rollover requests. PERA turned over the information to the special prosecutions unit of the Colorado attorney general's office and contacted the Internal Revenue Service.

The problem made it into the audit by Clifton Gunderson, an accounting firm hired by the state auditor's office, as it performed the annual evaluation of PERA's internal controls. PERA said it will begin randomly sampling 401(k) rollover requests to make sure they comply with the plan and IRS rules.

In a statement, PERA General Counsel Greg Smith said the pension plan "works to ensure the integrity of all its programs, and this is an effort that demonstrates PERA's commitment to providing safe and secure retirements to our members."

Finance Editor David Milstead can be reached at milstead@RockyMountainNews.com or 303-954-2648.