NY Lawyer to Pay $240K to Settle Pension Fraud Charges

November 6, 2009 (PLANSPONSOR.com) - A New York lawyer accused of fraudulently receiving state pension benefits from as many as six school districts while also maintaining a private law practice has agreed to pay $240,000 as part of a settlement agreement.

State Attorney General Andrew Cuomo announced the deal with Long Island attorney Lawrence W. Reich to repay $180,565 of improperly received pension payments and to pay an additional $60,000 to the state.

Cuomo said from 1978 to 2008, Reich was improperly carried as an employee at the districts – sometimes simultaneously – even though he was actually retained as outside counsel and not technically entitled to pension benefits.

Also as part of Reich’s settlement agreement, Reich agreed to forfeit all pension credits he accrued as a result of being on the payrolls of the six school districts.

“This lawyer epitomized the systemic waste and abuse in a state public pension system that routinely paid out millions in public funds to private-sector professionals who weren’t entitled to them,” said Cuomo, in a news release.

Before the investigation began, Reich was receiving approximately $62,000 annually in pension from the state pension system. As a result of the settlement, Reich now is only entitled to receive approximately $4,400 annually from the state pension system in connection with his prior full-time employment with the New York State Department of Education, Cuomo said.

Cuomo has been pursuing a wide-ranging investigation into similar issues at other public employers (see More Settlements Announced in NY Attorney Pension Probe ). The state has recovered $2 million from 70 people who received improper pensions.