Someone is playing a cruel hoax on Thrift Savings Plan I Fund investors at a time of steep losses.

Over the weekend, a bogus story emerged on the Internet claiming that an I Fund manager named Samuel Hoeffler was arrested for fraud involving the TSP fund. The story claimed the I Fund had become insolvent and that fund transfers would be frozen.

But Hoeffler doesn't exist and no fraud had ever occurred, according to TSP.

"Be assured that the TSP's I Fund has not suffered from account irregularities and is not insolvent," said a statement posted today on the TSP Web site.

Upon learning of the hoax March 2, the Federal Retirement Thrift Investment Board launched an investigation into its origin. TSP spokesman Thomas Trabucco declined to comment on the investigation.

The I Fund is a so-called "passive investment" meaning it is "not managed by any individual actively selecting securities in an effort to outperform the market," the TSP statement said. Rather, the I Fund invests in an index of international stocks and is managed by Barclays Global Investors, a large investment management firm, according to TSP. In the last 12 months, the I Fund has lost more than 50 percent of its value.

The bogus story first appeared on a blog that appeared to be written by someone stationed overseas with NATO. The story sparked discussion on a popular TSP message board, TSP Talk, but the thread has now been deleted.

This is the second hoax TSP has been the target of this year. In January, the Justice Department ran a cybersecurity phishing exercise that promised employees they would recover their losses if they entered their TSP account information on a fake Web site. That exercise was meant to gauge how savvy Justice employees were about phishing schemes to better protect the department's networks.

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