Niagara Gazette

Local News

October 15, 2008

FALLS SCHOOLS: District attorney awaits hearing for pension fraud issue

By Caitlin Murray<br><a href="mailto:murrayc@gnnewspaper.com">E-mail Caitlin</a>

Gov. David Paterson has signed into law a bill that seeks to clamp down abuse of the state pension system by attorneys working for districts.

The bill was prompted by widespread abuse uncovered by state Comptroller Thomas DiNapoli’s office over the past several months, including in the Niagara Falls City School District.

In May, DiNapoli determined that attorney Maria Massaro had been functioning as an independent contractor for the Falls school district, but was still granted pensions entitled to district employees.

The new law takes several steps to prevent attorneys from “double dipping” — attorneys are now barred from simultaneously serving as a school district employees and independent contractors. School districts now face stricter requirements in disclosure of compensation, including annual reporting of employees receiving pensions under waiver provision and making annual expense information available to the public online or at a public library.

New civil and criminal penalties for violations of the law’s provisions and defrauding the pension system have been introduced as well.

“The legislation ... clearly defines for school districts and BOCES across the state when someone can be considered a public employee and not an independent contractor,” DiNapoli said in a written statement.

DiNapoli announced plans to launch a statewide investigation into lawyer compensation after discovering one Long Island attorney had been designated as an employee in five different school districts simultaneously and received pensions from each, despite functioning as an independent contractor.

Two months later, the probe landed in Niagara Falls, when the comptroller revoked Massaro’s pension. Auditors determined that she did not meet the criteria of a district employee, noting that Massaro did not have a district office and claimed to work 260 days, but submitted no time sheets.

DiNapoli also said the district paid the firm of Angelo Massaro, Massaro’s father, $95,000 as an independent contractor while Massaro worked at her father’s firm as a private employee.

District officials told the Gazette in May they disagreed with the comptroller’s findings. Since then, Massaro has moved into an office at the 66th Street administration building and continues to work with the district.

“She’s an employee, we’ve met all the criteria,” Superintendent Carmen Granto said Monday. “There’s 23 pieces of criteria for an employee and she meets all 23. She has no other income, she reports directly to me and she reports to work like any other employee.”

She is now collecting pensions under her affirmed role as a district employee. What Massaro is appealing is the revocation of her past pensions — Massaro has told the Gazette she has worked for the district since 1999, but DiNapoli stripped her of all retirement benefits in May.

According to the state comptroller’s audit released last week, which looked at district operations mostly between 2005 and 2007, Massaro was paid a salary $87,058 and health benefits worth $11,634. Since 2004, the district has paid her father’s law firm around $665,000.

“I filed the appeal and recently received a letter saying they received my request for an appeal,” Massaro told the Gazette, “and they will shortly be sending the date and time for an appeal hearing.”

To date, DiNapoli has revoked pensions or rescinded service credit for around 40 attorneys statewide and is in the process of collecting nearly $1 million in revoked pensions.

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