No Prosecutions for State Pension Fraud Since 2001
Wednesday, November 17, 2010
The state retirement board investigator, Salvatore Lombardi, has not brought any pension fraud cases to prosecution and has handled only a dozen alleged cases of wrongdoing since 2001, according to state officials.
“I think it seems low,” said former General Treasurer Nancy Mayer, a Republican who served from 1993 to 1999. “Almost anybody who is on a disability [pension] should be periodically checked to see if they are disabled.”
State officials told GoLocalProv that applications for disability pension go through an exhaustive vetting process that can last six to eight months and involves extensive paperwork and review by state doctors. Those pensions have to be approved by a subcommittee of the retirement board. “I can assure you that the disability subcommittee is not a rubber stamp,” said Frank Karpinski, executive director of the Employees’ Retirement System of Rhode Island.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTAfter that, each year, a person on a disability pension must submit a form confirming that they are still disabled. It has to be signed by a doctor—their own doctor, not a state doctor. Lombardi reviews about 1,100 of those disability pensions each year and typically finds two or three cases where someone on a disability pension is earning more than they should be. Karpinski said those are “generally cases where someone lost count.”
That leaves a dozen cases of alleged fraud or wrongdoing that Lombardi has actively investigated. He found no merit to ten of the cases. The other two—which involve disability pensions—are pending, according to Karpinski.
Lombardi himself on a disability pension
Lombardi himself is on a disability pension—not from the state, but the city of Woonsocket, where he was a police officer from 1979 to 1987. The city has yet to respond to a GoLocalProv inquiry into the reason for the disability, but Karpinski said it has not affected Lombardi’s ability to do his job, which he has held for 23 years. He declined to discuss what the nature of the disability was.
Karpinksi denied that any conflict of interest arises from Lombardi having a city disability pension and investigating disability pensions for the state. He said Lombardi’s police background is an asset to the work he does as an investigator for the state.
Although state law does not bar municipal employees who retire from working for the state, Mayer still thinks it is inappropriate. “I think it is a great travesty that people who are on municipal disabilities themselves can then go and work for the state system and collect a full salary and all the benefits that accrue,” Mayer told GoLocalProv. “I think there should only be one publicly funded salary and it just makes no sense that the people of Rhode Island should do what is tantamount to two salaries for one person.”
‘We investigate everything’
Serving as a field investigator is the first responsibility listed in Lombardi’s official job description. Karpinski said investigations are triggered by anything from a formal written complaint to a phone call from someone who suspects a retiree of a wrongdoing. “We investigate everything,” Karpinski said. “We never discount. We never take it lightly.”
He said the retirement board does not keep count of how many tips it receives.
He said he and staff attorneys—rather than Lombardi—handle cases that don’t involve field work. Each month about two to three of those cases pass through his office—but none of those have led to prosecutions either.
Besides investigations, Lombardi has numerous other responsibilities, according to Karpinski. He also works in the Crime Victim Compensation Program, the Unclaimed Property Division, and the Investment Division. He also is charged with overseeing “internal security” for an office that handles lots of sensitive information. “Sal is around making sure papers aren’t out … open,” Karpinski said.
State system separate from cities and towns
Karpinski said the dozen investigations Lombardi has handled is a testament to the rigorous screening process the retirement board uses to ensure that people don’t get pensions they don’t deserve. Checking up front, he said, prevents cases of fraud and abuse down the road.
“If anything that’s a plus, not a negative because we’re doing a lot of proactive work all along,” said Dave Layman, a spokesman for the retirement board. “People know you can’t fool the system.”
Karpinski said the retirement board’s procedures are more rigorous than cities and towns that maintain their own pension systems. One local pension system is in Johnston, where a GoLocalProv investigative series has revealed at least 25 cases of illegal firefighter pensions. “The rules are very different in some cities or towns,” Karpinski said. At the retirement board, he said there are “a lot of tight internal controls” before pension checks are sent out to retirees.
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