Trial Begins for Ohio Pension Leaders Accused in $65 Billion STRS Corruption Scheme

Allegations of Fiduciary Breach and Hidden Influence

During opening statements, Assistant Attorney General Chad Kohler accused the defendants of undermining transparency and fairness in their roles. “The defendants breached their fiduciary duties,” Kohler said. “They chose secrecy over transparency, deceived their fellow board members, and engaged in conduct that raised serious questions.”

The case focuses on an alleged relationship between Fichtenbaum, Steen, and a startup investment firm called QED Technologies, founded by former Ohio Deputy Treasurer Seth Metcalf and associate Jonathan (JD) Tremmel. According to court filings and whistleblower documents, QED—despite having no clients, registration, or track record—allegedly sought a $65 billion investment partnership with STRS.

Prosecutors claim Steen and Fichtenbaum, known advocates for “reform” within the pension system, helped promote QED’s proposal while failing to disclose the firm’s limited experience and potential conflicts of interest.

How the STRS Controversy Evolved

The controversy first surfaced in May 2024, when the governor’s office received an anonymous 14-page whistleblower memo alleging a massive corruption scheme within STRS. The memo, later confirmed to have been written by STRS employees, accused Steen and Fichtenbaum of collaborating with QED and the Ohio Retirement for Teachers Association (ORTA) to influence board elections and push the fund toward working with the startup.

Investigative reports revealed the following timeline:

• 2020–2024: QED founders Metcalf and Tremmel began courting STRS, pitching investment strategies to board members.
• 2024: The whistleblower memo alleged a concerted effort to steer STRS toward a contract with QED.
• September 2024: Following media investigations, STRS paused a proposal to hire another firm with similar ties to board leaders.
• April 2025: Governor Mike DeWine, responding to public outcry, addressed the scandal publicly for the first time.

At the heart of the debate is a fundamental disagreement over how the pension fund should be managed. Reform-minded members like Steen and Fichtenbaum favored index investing, which mirrors the stock market at lower costs, while other members supported actively managed funds, which employ advisors to outperform market benchmarks.

Texts and Emails at the Center of the Case

According to filings presented by the state, text messages and emails between Steen, Metcalf, and Tremmel show extensive behind-the-scenes collaboration. Investigators allege that QED representatives ghostwrote policy proposals, supplied board talking points, and even drafted questions for Steen to raise during meetings.

“You will see numerous instances where defendants passed off materials that they claim to have written themselves that were actually ghostwritten by Tremmel and Metcalf,” Kohler told the court. “They were spoon-fed what to say.”

Defense attorney Norman Abood, representing Steen, countered that the case misrepresents legitimate efforts to explore investment reform. “This whole case is about a claim that there was some secret deal to promote an investment solution proposed by QED,” Abood said. “It’s not supported by the facts.”

Competing Narratives in Court

During testimony, Steen defended his actions, insisting his only goal was to improve financial outcomes for Ohio’s retired teachers. He emphasized his long-standing advocacy for restoring promised benefits, including the cost-of-living adjustment (COLA) that had been suspended for several years.

“What I was trying to do was provide benefits that were promised to planned beneficiaries,” Steen testified. “We wanted to reduce excessive investment costs and return more money to retirees.”

However, Assistant AG Kohler and other state attorneys presented documentation showing that Steen had signed multiple fiduciary agreements requiring transparency and independence. Under cross-examination by Attorney Martin Cordero, Steen acknowledged that he did not recall attending the STRS fiduciary training designed to prevent conflicts of interest.

Potential Consequences for STRS and Retired Teachers

The STRS fund manages more than $100 billion in assets for current and retired educators. Even the perception of corruption or favoritism can shake public confidence in the pension system’s stability. State officials argue that the case is about protecting teachers’ retirement security and ensuring board members adhere to the highest ethical standards.

“This case is straightforward,” Kohler said during a recess. “The state is trying to protect teachers’ money. You’re going to see a lot of evidence and a lot of egregious conduct.”

If the court finds that Fichtenbaum and Steen breached their fiduciary duties, they could be permanently barred from serving on any Ohio pension boards. The ruling may also influence broader pension governance reforms aimed at strengthening oversight and transparency in large public funds.

Accountability and Investor Protection

Public pension systems hold enormous financial power, but that influence comes with an equally high duty of care. Cases like this one highlight the importance of robust compliance practices and independent supervision to prevent conflicts of interest and misuse of authority.

Meyer Wilson Werning continues to follow developments in the STRS case closely. The firm represents investors and retirees across the country in cases involving fiduciary breaches, financial negligence, and misconduct in the management of retirement assets.

If you have questions about the security of your retirement investments or believe your funds were mishandled, contact Meyer Wilson Werning through our official website to learn how we can help protect your financial future.

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