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New York AG reaches $600k settlement with law firms accused of pension fraud

[JURIST] New York Attorney General Andrew Cuomo [official profile] announced [press release] Wednesday that the state had settled with two law firms accused of defrauding the state pension system. For years the two firms, Girvin & Ferlazzo, PC and Hogan, Sarzynski, Lynch, Surowka & DeWind LLP [firm websites], had arranged for some of their attorneys to be placed on the employment rolls of New York school districts in order to qualify for pension benefits, even though the attorneys had only performed contract work for the schools. The firms agreed to pay a combined $600,000 in restitution for the illegitimate benefits, and in return those attorneys included in the deals will not face criminal charges for their involvement. Commenting on the outcome, Cuomo said:

The Girvin firm considered it a perk of partnership to collect public pension benefits they weren’t entitled to. Some partners collected benefits as purported ‘employees’ while not providing any of the services for which they were being compensated. This settlement will make New York’s taxpayers more than whole while holding the firm accountable for this egregious conduct.
It is unknown whether the attorneys will face any additional disciplinary measures from the bar. The Business Review has more. News 10 has local coverage.

Cuomo's investigation began in February [Newsday report] as a response to a report that one attorney, Lawrence Reich, had been illegitimately placed on the employment rolls of five New York school districts. In April, he announced [press release] that as many as 90 attorneys and 180 school districts had been involved in similar agreements, with some attorneys recieving hundreds of thousands of dollars in inappropriate benefits. The New York Times has more.

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