Attorney sought to get on Roslyn payroll

BY SANDRA PEDDIE AND EDEN LAIKIN | sandra.peddie@newsday.com
eden.laikin@newsday.com

9:45 PM EST, February 25, 2008

Carol Hoffman, one of three Long Island attorneys currently under federal and state investigation for their employment arrangements with school districts, solicited the Roslyn school district in writing in 1998 asking to be put on the payroll and explaining that she wanted to get more credit in the state pension system.

In the letter, written on the stationery of her Garden City law firm, Jaspan Schelsinger, Silverman and Hoffman, she said she was asking for a "personal accommodation." She added that if approved, the district could pay a lower retainer fee to the firm. Hoffman reassured then-Superintendent Frank Tassone that "this practice is approved by the state."

She wrote that she was already listed as a half-time employee by the Bethpage school district, according to the Aug. 19, 1998 letter, which was obtained by Newsday under a Freedom of Information Law request. She added that if Roslyn approved designating her as a part-time employee, she "could acquire one full year's credit each year rather than one year's credit for every two years."

The letter is the first evidence to surface that shows an attorney actively soliciting such an arrangement and lays out why it was attractive financially. Hoffman and two of her former partners -- Lawrence Reich and Jerome Ehrlich -- are at the center of a rapidly unfolding saga that has sparked investigations by the Federal Bureau of Investigation, the Internal Revenue Service and the New York State Attorney General.

At least 11 school districts carried all three attorneys as full- or part-time employees, enabling them to get public benefits, while also collecting fees for their respective law firms.

The investigations started Feb. 15 in the wake of a Newsday story that day that disclosed that five school districts falsely reported Reich as a full-time employee, allowing him to retire with a $61,459 pension and medical benefits.

Monday, Emily DeSantis, a spokeswoman for New York State Comptroller Thomas DiNapoli, issued a statement saying that the practice was not approved by the state.

Hoffman was unavailable for comment Monday, according to her firm's spokeswoman. Her law partner, Steven Schlesinger, said in an interview that under the arrangement, her salary and benefits were supposed to equal the retainer.

"It wasn't supposed to be salary and benefits plus retainer," he said, adding that Hoffman " never intended to be more than part-time at any school district to my knowledge."

The Roslyn school board turned down Hoffman's request, according to records obtained by Newsday, even though Tassone assured the board in an Aug. 28, 1998, memo that, "Granting her request would not incur any additional cost to the district."

Hoffman's firm was already collecting a retainer from the district. Records show that the district paid Jaspan Schlesinger and Hoffman $2,256,736 in fees from 1999 through 2004.

After being rejected by Roslyn, Hoffman was listed as a full-time employee of the Bethpage school district, according to state records -- enabling her to get a full year's pension credit for each year through 2003, when the district says it cancelled her full-time status. From 1999 through the 2003-2004 school year, Hoffman's firm was paid $847,106, according to school district records. State records show that Hoffman was also paid a yearly salary by the district, the highest being $40,000 in 2003.

Bethpage school officials declined comment Monday, but issued a statement saying that the district's assistant business superintendent decided in 2003 that "carrying Ms. Hoffman as a full-time employee was inappropriate and she was immediately removed from the payroll."

Hoffman, 56, has accrued nearly 20 years in the state pension, even though she was in private practice most of that time. She has not begun collecting a pension, records show.

Tassone, 61, currently is serving a four- to 12-year prison sentence at Midstate Correctional Facility for his role in an $11.2-million embezzlement scheme at the district.

Currently, Roslyn is suing Hoffman, alleging that she failed to advise the school board to notify law enforcement after the district uncovered evidence of embezzling in 2002.

Outside auditors uncovered evidence in 2002 that Pamela Gluckin, then a district business official, had stolen $220,000 in district funds. School board members said in their lawsuit that on Hoffman's advice, they allowed Gluckin to repay the money and quietly retire. They never reported the theft.