Attorney General Cuomo Uncovers And Ends Improper Law Firm Abuse Of Public Pension System

ALBANY, N.Y. (May 8, 2008) – Attorney General Andrew M. Cuomo today announced settlement agreements with a western New York law firm and a Capital Region attorney ending improper employment arrangements with school districts and various Boards of Cooperative Educational Services (“BOCES”).  The agreements also rescind all public benefits wrongfully received.

The settlements are with the Buffalo firm of Hodgson Russ LLP and Capital Region attorney Maureen Harris, a former partner with the Albany firm Girvin and Ferlazzo, P.C.

“In recent months my office has uncovered long-term and systemic fraud on the public pension and benefits systems which have potentially wasted millions of taxpayer dollars,” said Attorney General Cuomo. “Lawyers representing school districts and BOCES across the state were given public benefits they were not entitled to. Some lawyers have received illegal perks for years and were improperly put on district payrolls. My office will continue to follow this investigation wherever it leads, and we will put an end to this abuse.”

The settlement with the Hodgson firm ends all agreements they had with five BOCES from Monroe County to Buffalo in which their lawyers were improperly listed as employees.  A BOCES provides services to multiple school districts that individual school districts cannot afford to provide themselves.  

The Harris settlement rescinds pension benefits she received while at Girvin & Ferlazzo when she was listed as an employee at the Hamilton-Fulton-Montgomery BOCES. The settlements represent a significant step toward ending improper employment arrangements between lawyers, school districts and BOCES.

Both Hodgson Russ and Harris will also pay $50,000 under the settlements.

As detailed in settlement papers, the Attorney General’s investigation also found that Girvin & Ferlazzo, P.C, (“the Girvin Firm”) arranged to have several of its attorneys appointed as payroll employees at the HFM BOCES for nearly 20 years.  As a result, the Girvin lawyers were reported as employees to the state pension program and received benefits reserved for public employees, even though several were doing no work or almost no work for HFM BOCES. The firm generally regarded BOCES payroll placement as a perk of membership in the Girvin firm instead of a benefit of actual state employment This arrangement also enabled the HFM BOCES and its component school districts to improperly obtain state aid.

Harris, who was appointed in 2005 as a BOCES Labor Relations Specialist, received a $30,000 salary from HFM BOCES and pension credits, despite the fact that she did not provide any labor relations
services to the HFM BOCES.  Harris will pay $50,000 under the settlement, forfeit the pension credits she earned and accurately represent the nature of her employment arrangements in the future. Her employment arrangement with HFM BOCES ended in 2006 when she left the Girvin firm.

The Hodgson Russ firm allowed five BOCES — covering 112 school districts across Western New York — to list their attorneys as employees, even though they were outside legal counsel.  The deal allowed the BOCES’ component school districts to receive reimbursement from the state for a portion of the cost of the lawyers even though they did not qualify for this aid.

Unlike the Girvin firm, none of the Hodgson lawyers received public pension benefits as a result of their employment agreements. Hodgson Russ LLP will pay $50,000 under the settlement and end the practice of allowing their attorneys to be listed as BOCES employees. 

The five BOCES included the Cattaraugus-Allegany-Erie-Wyoming BOCES in Olean, Erie 1 BOCES in West Seneca, Erie 2 BOCES in Angola, Orleans-Niagara BOCES in Medina and Monroe 2 BOCES in Spencerport.

Cuomo’s ongoing investigation of pension fraud includes reviews of employment practices at all school districts across the state and all 37 BOCES, and has expanded to include more than 4,000 local governments and special districts across New York state.  The investigation has already revealed that many lawyers had remained on school districts’ or BOCES’ payrolls for such extended periods of time, or were included on the payrolls of so many school districts or BOCES simultaneously, that they accumulated substantial credits in the New York State Employees’ Retirement System. 

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.


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