In the past 18 months, the state comptroller has gone after scores of private attorneys who improperly received public pensions, recouping more than $1.4 million and canceling millions more in pension credits.

Now, the comptroller has to give it all back.

Because of back-to-back court rulings this fall that found Comptroller Thomas DiNapoli did not provide adequate due process before revoking pensions, all 62 people statewide who lost pensions or pension credits from the state retirement system will have them returned - even though DiNapoli's office says they are not entitled to them.

 

'Back to square one'

"Here we are 18 months later, and they're back to square one - where they began this crusade," said Albany attorney James Roemer, who is representing several attorneys who have challenged the comptroller's actions.

Paul Sabatino, former Suffolk chief deputy county executive, had a different view. "The only thing worse than giving public pensions to ineligible lawyers is giving back the money without a fight,'' he said. "This is government at its absolute incompetent worst.''

But DiNapoli's spokesman, Dennis Tompkins, said the comptroller isn't giving up.

"Comptroller DiNapoli still believes that the actions our office took are correct, and he will continue to fight to recover the money," he said.

The rulings - which centered on a lawsuit brought by Valley Stream attorney Albert D'Agostino - did not bar the comptroller from revoking the pensions again. But the judges said his office must provide adequate notice before doing so.

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To meet that requirement, Tompkins said each person would now be offered a hearing by the comptroller's office. He said none have been scheduled, and he could not provide a time frame for them.

Since the rulings, the comptroller's office has returned nearly $500,000 and restored pensions worth another $370,000 annually to 13 attorneys statewide. Seven are from Long Island, and they received the lion's share of the returned funds, or about $390,000. Tompkins said the remaining 49 who lost pension benefits are now being notified.

In addition to D'Agostino, who received $152,719, the other Long Islanders are Lawrence Reich, $92,395; Armand Terpening, $3,206; George Lipp Jr., $10,904; Jerome Ehrlich, $106,948; A. Thomas Levin, $6,943; and William Englander, $16,140. These attorneys either could not be reached or declined to comment.

 

Health benefits also

Records show that some of the 62 also receive public health benefits, but it's not clear whether any action was taken to also rescind those. The New York State Civil Service Department, which oversees the state's health insurance plan, has refused to disclose which attorneys obtained the benefits on top of pensions, despite an opinion from the New York Committee on Open Government that the information is public.

Tompkins said the comptroller's office has reviewed every professional on a public payroll statewide. The cases of 19 other Long Island attorneys remain under review.

The comptroller began the administrative actions after a series of Newsday stories exposing the practice of private attorneys being improperly reported as public employees, which gave them access to benefits.

Many of the attorneys also collected millions in retainer fees, in addition to public salaries and pension benefits. Under federal Internal Revenue Service rules, a person cannot be paid as both an independent contractor and an employee for the same work.

The stories sparked federal, state and local investigations, and prompted the State Legislature to pass landmark pension reforms. And last month, Nassau District Attorney Kathleen Rice released a grand jury report of her office's investigation into pension abuses and urged additional legislation to make the new laws even tougher.

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Cuomo's actions stand

New York State Attorney General Andrew Cuomo, who pushed through the state legislation, conducted his own investigation in the wake of the Newsday stories. His office has recouped roughly $1.7 million in settlements covering 75 professionals who had improperly received pension benefits. Because the settlements required those people to give up any future claims to pensions, they are not affected by the court ruling, according to Cuomo spokesman John Milgrim.

Moreover, he said, millions more will be saved because the practice has been stopped.

Sources familiar with the various investigations said the offices of the attorney general and comptroller had disagreed on how to handle the cases and ultimately decided to pursue parallel investigations.

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The court rulings are not being appealed. Tompkins said the comptroller's staff met with the attorney general's office and both agreed not to appeal. Tompkins said the office believes it will "more efficient" to go through the hearing process.

Susan Lerner, executive director of Common Cause / New York, a nonprofit advocacy group, said the court rulings were correct.

"There has to be a factual inquiry," she said. "That's what our American system requires. . . . Murderers get to do that."