The suit alleges that AA Capital Partners, its co-owner and president, chief financial officer, and affiliate AA Capital Liquidity Management LLC, violated the Employee Retirement Income Security Act (ERISA) by "imprudently misusing plan assets and charging the plans excessive fees on investments." Specifically, the suit claims that AA Capital improperly used $25.9 million of the plans' assets to pay for, among other things, renovations to a horse farm and a strip club managed by AA Capital's president, and allegedly caused the plans to pay unauthorized fees. The five Michigan pension funds covered more than 60,000 participants and had total assets of approximately $3.1 billion, according to DOL.

The suit, filed in a federal district court in Chicago, was the result of an investigation conducted by the Chicago Regional Office of the Labor Department's Employee Benefits Security Administration (EBSA).

"This case involves gross abuse of the trust that workers and their families placed in the management of these pension funds," said Secretary of Labor Elaine L. Chao in a press release announcing the suit. "We are seeking full restitution to the pension plans, including the illegal profits that the defendants realized at the expense of workers and their families."

According to DOL, the suit seeks a court order to require that the defendants restore to the plans all losses, return illegal profits and correct transactions prohibited by law and also asks that the defendants be permanently barred from serving as fiduciaries to any plan governed by ERISA in the future.