Judge Slaps Pension Theft Defendant with Jail Sentence

December 22, 2004 (PLANSPONSOR.com) - A man hired to upgrade the city' of Milwaukee's pension system was sentenced to 18 months in prison and five years of extended supervision for bilking the plan out of more than $300,000.

Milwaukee County Circuit Judge Mary Kuhnmuench on Tuesday denied a request from Paul Claybaker’s defense attorney to let him begin serving the term in 10 days and instead ordered him immediately taken into custody, the Associated Press reported.

Court records show Paul Claybaker’s former employer, Charter Consulting, was hired in August 1999 to upgrade the pension system. Over the next 30 months, Claybaker skimmed money from the system through schemes such as creating a fake software company to bill Charter for its nonexistent services, according to testimony.

According to the Associated Press, he also was accused of submitting inflated hotel bills and other altered invoices in the pension system, and billing the system for hours allegedly worked by other Charter employees.

Claybaker, 42, had pleaded no contest to two counts of felony theft in what Assistant District Attorney David Feiss called the largest theft of public money in Milwaukee in years. “He really had no need for this money,” Feiss told reporters. Claybaker had an annual salary of $160,000 and legitimately bought at least three homes, a 1979 Porsche and a 1999 Mercedes-Benz, Feiss said.

Claybaker’s attorney, Stephen Glynn, said his client never spent the money taken from the Milwaukee Employees’ Retirement System. Two months ago, he paid $372,540 in restitution to the retirement system, which included the money he stole and the cost of investigating the crime, according to the Associated Press report. He also paid $138,372 to his former employer, Charter Consulting Inc., Glynn said.

The retirement system has 27,000 members, 10,000 of them active in the pension system.