Legal Ethics

'100s and 100s' of N.Y. Lawyers Involved in Pension Scheme, AG Says

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Updated: “Hundreds and hundreds” of New York lawyers will be implicated in a statewide scheme in which non-employees have improperly been enrolled in the public pension system, the state attorney general says.

The situation was initially reported by Newsday as involving several lawyers in private practice representing Long Island school districts yet getting state pension credit—and, in some cases, pension payments—because they were being paid as school district employees. But the scheme also involves lawyers in private practice in other areas of the state who are working as independent contractors but are claimed as employees of other government entities, according to Andrew Cuomo, the New York attorney general. He says his investigation so far has exposed only the “tip of the iceberg,” reports the New York Law Journal.

Cuomo described a widespread system of such practices that dates back close to 20 years, at least, according to the New York Times. “You’ll see state connections between high level state officials, with county connections, village connections,” he says. “It is a form of low-level political patronage governmental fraud.”

As discussed in an earlier post, another prosecutor, Ellen Biben, said at a press conference yesterday that no-show school district jobs were a “perk of partnership” for some lawyers at one Albany, N.Y.-area firm specializing in education law. A $50,000 settlement by a former partner of the firm was announced at the press conference, but Cuomo says a a criminal and civil investigation by his office continues against the law firm, Girvin & Ferlazzo, and the settlement involves only that one former partner, Maureen Harris, the New York Law Journal reports.

Last month, Newsday reported at that least 12 present and former Girvin & Ferlazzo attorneys are under investigation in the state pension probe, as discussed in another previous post.

Jeffrey Honeywell, the firm’s managing partner, is among the lawyers who received state pension credit while classified as school district employees, according to Biben, and he said yesterday that Girvin & Ferlazzo is cooperating with Cuomo’s investigation and has done nothing wrong. The firm’s contracts were approved by the state education department, and a former state comptroller, H. Carl McCall, determined approximately a decade ago that state pension rules permitted lawyers employed at multiple school districts to be enrolled, according to Honeywell.

“The rules and regulations covering the area of employment in this area are at best confusing and not universally applied,” Honeywell states. “Our hope is that the review by the attorney general and comptroller will result in clarity for the future to guide our clients and all municipal entities.”

In addition to Cuomo’s office, other state and federal agencies are also investigating.

While “there will be people beyond lawyers” who will be determined to be involved in the pension scheme, “the predominant class will be lawyers,” Cuomo says.

Updated at 11:15 a.m., May 12, 2008, to include New York Times coverage.

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