I-Team: Should Convicted Police Chief Have Collected Nearly $1M In Pension Payouts?

BOSTON (CBS) - When public employees in Massachusetts are convicted of crimes related to their jobs, they are supposed to lose their taxpayer-funded pension benefits.

But an I-Team investigation found some surprising—and costly—examples where that isn't the case.

In one example, the I-Team discovered a lapse in communication caused a criminal conviction to fall through the cracks, allowing a former school administrator to collect more than $350,000.

In another instance, the I-Team identified a convicted public official who has questionably received almost $1 million in benefits.

After the I-Team started asking questions, retirement board officials are already taking a closer look at the cases.

Police chief convicted in federal court, but keeps receiving pension

In 1995, Winthrop's police chief abruptly retired amid rumors he was at the focus of a federal probe.

Before long, prosecutors accused Angelo LaMonica of taking cash payments to ignore illegal gambling activity in his town.

LaMonica eventually admitted to accepting $70,000 in bribes. After his guilty plea, the disgraced police chief spent 14 months in prison.

However, despite the conviction, the I-Team learned LaMonica never lost his pension. Through the end of January, records show he has received $956,280.65 in retirement benefits.

How did it happen? LaMonica's actual conviction was filing false tax returns.

The provision of the law that addresses forfeiting a public employee's pension benefits specifically states a conviction must be "applicable to one's office or position."

At the time, the Winthrop Retirement Board sought an opinion from its legal counsel. Documents the I-Team obtained show a letter from attorney Michelle McNulty concluded the Board could not revoke LaMonica's pension.

"Although the filing of federal income tax returns is every citizen's obligation, it is not a job requirement of a police chief," McNulty wrote. "(LaMonica's) conviction neither requires nor justifies the withholding of his retirement benefits."

The Board never took action. LaMonica's case, once the talk of the Winthrop community, faded from memory.

"That is extremely surprising," reacted Kevin Blanchette, the CEO of the Worcester Regional Retirement System.

Blanchette is also the former state lawmaker who crafted the 1988 legislation that strips corrupt public employees of their pensions. Convicted employees receive the contributions they put into the system (without interest), while the taxpayer-funded portion is forfeited.

"If you violate the public trust, you don't have the right to a pension that is taxpayer supported for the rest of your life," Blanchette said. "It's incumbent on retirement boards to do their due diligence to peel back the layers."

Two decades later, retirement board weighs revoking pension

After getting a tip, the I-Team asked the Winthrop Retirement Board for details surrounding LaMonica's pension.

Federal court documents indicate the money LaMonica failed to report on his income taxes was provided by the operator of illegal poker machines.

Those documents also include a letter from U.S. Probation Officer Pamela Lombardini, who urged the federal judge not to accept the plea deal because it could allow LaMonica to continue receiving the retirement benefits.

"The message to the honest police officers and the residents of Winthrop is that it is acceptable for the highest law enforcement in the town to benefit from office and from illegal proceeds," the letter said.

After questions first surfaced late last year, members on the Winthrop Retirement Board asked their attorney to study the case. And during a January meeting, they voted to hold a pension forfeiture hearing for LaMonica.

Attorney Michael Sacco represents the Winthrop board, along with nearly half the retirement boards in the state. He told the I-Team the case is unique because of the time that has elapsed.

"In the 23 years I've been doing this, I've never had one quite like this," Sacco said. "But there is no statute of limitations and it's appropriate to have a hearing."

Attempts to reach LaMonica at his homes in Winthrop and Florida were unsuccessful. His attorney also did not respond to a request for comment.

But on Tuesday night, the Winthrop Retirement Board held a private hearing where LaMonica had the opportunity to argue why he should keep his pension.

A decision is expected in March.

Other convicted public employees avoid losing pension benefits

The contentious pension forfeiture law has been challenged several times in the courtroom.

A high-profile example is former House Speaker Thomas Finneran, who lost his pension after a 2007 federal conviction for lying under oath.

However, a Boston judge ruled last year that Finneran's pension should be reinstated because he was not acting in his official capacity during the testimony. The Attorney General is appealing the decision.

The I-Team identified other examples where plea deals or leniency from a judge allowed shamed public employees to retain their benefits:

• Walter Cullen, former Hamilton police chief, was convicted for his role in an EMT certification scandal. Cullen pleaded guilty to larceny and fraud in 2011, but the judge granted him a "continuation without a finding" if he paid $25,000 in restitution. After 18 months, the convictions disappeared from Cullen's record, allowing him to retain his annual pension of almost $75,000
• Timothy Leonard, Newbury's former public works director, faced five felony counts of embezzlement for stealing from the town. But last December, Leonard also received a "continued without a finding" reprieve. If he stays out of trouble for three years, and pays $7,800 in restitution, he will keep his $34,000 pension.

Blanchette said public employees are getting savvier about how to skirt the pension forfeiture requirement after they are caught breaking the law.

"It's certainly disappointing," Blanchette said. "We have a huge pension debt in Massachusetts. It should raise the ire of all taxpayers."

Ryan Kath can be reached at rkath@cbs.com. You can follow him on Twitter and connect on Facebook.