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December 5, 2008

Attorney General Cuomo and Comptroller DiNapoli
Return More Than $104,000 in Retirement Settlement Money
to the State Pension Fund and Local Governments

ALBANY, N.Y. (December 5, 2008) – Attorney General Andrew M. Cuomo and State Comptroller Thomas P. DiNapoli today announced that $104,231.15 collected by the Attorney General has been returned to the New York State and Local Retirement System.

The funds come from settlements Attorney General Cuomo reached with Long Island, Capital Region and St. Lawrence County attorneys who were wrongly classified as employees at school districts and Boards of Cooperative Education Services (BOCES) and thereafter erroneously received pension payments.

“Taxpayers shouldn’t have to pay for these mistakes,” Comptroller DiNapoli said. “Attorney General Cuomo acted swiftly to reach these settlements. Now my office can get this money back to local governments. Every dime counts when every level of government is facing cutbacks. We’ll continue to work with the Attorney General to return this settlement money to the public.”

“For years there has been waste, fraud, and abuse of taxpayer-funded public benefit systems by lawyers and other professional consultants. We are holding them accountable and are starting to return some of their ill-gotten public funds,” said Attorney General Cuomo. “Working together with Comptroller DiNapoli we will continue to identify anyone receiving public funds they are not entitled to and take the necessary actions to recoup the money.”

Attorney General Cuomo’s ongoing statewide investigation of pension abuse includes more than 4,000 local governments and special districts across New York State, all school districts, and the 37 BOCES. The investigation has already revealed that many lawyers had improperly remained on public payrolls for such extended periods of time, or were included on the payrolls of so many public sector employers simultaneously, that they accumulated substantial credits in the New York State pension system. To date, Attorney General Cuomo’s investigation into fraud and abuse in the public pension systems has resulted in more than $1.5 million in settlements involving the conduct of more than 65 attorneys.

Comptroller DiNapoli’s office has now revoked membership or retirement service credit for 40 individuals. Comptroller DiNapoli recently announced the establishment of a Retirement Compliance Unit to actively monitor participating employers’, members’ and retirees’ compliance with regulations and reporting requirements. The unit, headed by former City of Albany Comptroller Thomas Nitido, will correct past abuses of the Retirement System and work to prevent abuses in the future.

Attorney General Cuomo’s investigation also led to a new state law that increases government accountability at all levels, curbs fraud and abuse in the state retirement system with tough new penalties, closes “double dipping” loopholes for retirees, and increases transparency and accountability in school spending plans.

Comptroller DiNapoli said the $104,231.15 will be used to make whole the pension fund and, where appropriate, pay back local governments for contributions made to the pension fund on behalf of these attorneys. Employers will see a credit for the money on their 2010 Retirement System invoices, which will be mailed in November 2009.

The funds that have already been returned to the Retirement System include payments by three attorneys who had retired and were receiving pension benefits from the State of New York: John D. Elmer of St. Lawrence County, E. Michael Ruberti of the Capital Region, and Gilbert Henoch of Long Island. Elmer and Ruberti collectively will repay the Retirement System another $119,795.96 for past benefits erroneously received. Ruberti, who was deemed eligible to receive reduced pension payments going forward based on his employment with the Hamilton Fulton Montgomery BOCES, has agreed to forgo forthcoming pension payments of another $126,505.04 over the next several years until the pension fund can be made whole for past overpayments he erroneously received.

In March, DiNapoli announced regulations clarifying long-standing requirements for inclusion in the Retirement System and providing guidance for local governments seeking to determine the difference between employees and independent contractors.

Click here to view a timeline of DiNapoli’s actions.


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