Attorney General Cuomo Announces Long Island Lawyer Lawrence W. Reich To Pay More Than $240k To Settle Pension Abuse Case


ALBANY, N.Y. (November 5, 2009) - Attorney General Andrew M. Cuomo today announced that Long Island attorney Lawrence W. Reich will pay more than $240,000 for his nearly 30 years of abusing the state’s public pension system.

Reich will pay to the State of New York and the state pension system a total of $240,565.74 to end Attorney General Cuomo’s investigation into his nearly 30 years of improper employment arrangements with six Long Island school districts where he was on the payrolls from 1978 through 2006, at times simultaneously. For the entire period, Reich worked as outside retained counsel and was not entitled to benefits reserved for public-sector employees. The settlement includes reimbursing the state pension system all pension funds he received as a result of his improper employment arrangements with the districts, totaling $180,565.74, plus an additional payment of $60,000.00 to the State.

Also as part of Reich’s settlement agreement with the Attorney General, Reich is agreeing to forfeit all pension credits he accrued as a result of being on the payrolls of the six school districts. In addition, Reich must withdraw his demand for a hearing with the state pension system and is waiving any rights he has with respect to certain determinations made by the state pension system regarding him. These terms ensure that Reich no longer has any rights to pension payments in connection with his arrangements at the school districts going forward.

“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 Attorney General Cuomo. “His claims defied logic; at one point he was reported working full time for five school districts simultaneously. In fact, he never should have claimed himself as a legitimate employee of any one of them to begin with. Taxpayers have rightfully grown increasingly frustrated with the rampant waste and abuse and my office will continue working to put a stop to these schemes.”

Reich applied for membership with the state pension system in 1966, while he was a full-time employee at the New York State Department of Education. In 1978, Reich went into private practice, and worked full-time as an attorney in private practice at various firms in Long Island.

While Reich was in private practice, he was improperly listed as an “employee” at the Baldwin Union Free School District from 1978 through 2006, at the Bellmore-Merrick Central School District from 1984 through 2006, at the East Meadow Union Free School District from 1985 through 2001, at the Copiague Union Free School District from 1988 through 2006, at the Freeport Union Free School District from 1990 through 1991, and at the Harborfields Union Free School District from 1995 through 2006. Reich’s placement on the payrolls of those school districts often occurred upon his explicit request, so that he could accrue additional credits with the state retirement system to which he was not entitled.

At all times, Reich was providing services to those school districts as an independent contractor and not as an employee as defined by law. Therefore, he was not entitled to the pension benefits he accrued in connection with his placement on those school districts’ payrolls.

Before the Attorney General’s 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.

Attorney General Cuomo’s ongoing statewide investigation of pension fraud and abuse includes more than 4,000 local governments and special districts across New York State, all school districts and the 37 Boards of Cooperative Educational Services (“BOCES”). The investigation has already revealed that many lawyers and other professionals had improperly remained on public payrolls for such extended periods of time, or were included on the payrolls of so many public sector employers simultaneously, that they accumulated substantial credits in the state retirement system.

To date, Attorney General Cuomo’s investigation into fraud and abuse in the public pension systems has returned nearly $2 million to taxpayers through actions involving the conduct of more than 70 attorneys and other professionals.

The Attorney General’s Office urges individuals with knowledge of any questionable arrangements between any BOCES, local governments, or school districts and their outside professionals to contact the Public Integrity Bureau by telephone at 212-416-8090 or by e-mail at public.integrity@ag.ny.gov.
The settlement announced today was handled by Assistant Attorney General Renée L. Jarusinsky under the supervision of Special Deputy Attorney General for Public Integrity Ellen Nachtigall Biben.

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