Judge OKs More Time for Defense in SD Pension Fraud Case

September 1, 2006 (PLANSPONSOR.com) - The judge in a pension fraud case involving four former San Diego pension officials and the system's former counsel, has agreed to push back the trial date from February to May 2007 after defense attorneys asked for more time.

According to the San Diego Union-Tribune, US District Judge Roger Beneitez acquiesced to the request by the defense, saying it was reasonable because the case was complex and would require leafing through millions of pages of documents and because one of the attorneys joined the defense team eight months after the indictments.

The pension city officials were indicted in January with criminal charges (See Five Indicted in San Diego City Pension Case ) – another step in what had been a two-year federal investigation into San Diego’s underfunded pension system that now has a $1.43 billion shortfall. The case rested on the approval of a plan in 2002 in which pension board members allowed the city to underfund the city’s retirement system in exchange for granting increased benefits to employees (See San Diego DA Kicks Off Pension Probe ). All of the defendants pleaded not guilty in the case (See Former SD Pension Officials Plead Not Guilty ).

The case has already has its share of stalls, as defendants tried to find lawyers that the government would give its nod to, according to the Union-Tribune, and the defendants lost their request for a change of venue (See Defendants in SD Pension System Trial Ask for Venue Change ).

An independent audit of the city’s pension system released in August focused even more heat on the issue when it found that pension officials flouted the law when they approved pension agreements that allowed withholding full contributions to the city’s pension plan and made false disclosures to investors (See Audit: SD Broke Law in Connection with Pension Debacle ). The auditors were hired to look into accounting irregularities and possible fraud by pension system employees.