First Public Pension forfeiture action in New York State announced by New York State Comptroller Thomas P. DiNapoli, Steuben County District Attorney Brooks Baker, and the New York State Police

On August 1, 2024, New York State Comptroller Thomas P. DiNapoli, Steuben County District Attorney Brooks Baker, and New York State Police Superintendent Steven G. James jointly announced that a former clerk-treasurer of the Village of Addison in Steuben County will be sentenced to serve 3-to-9 years in state prison, pay full restitution of $1.1 million, and forfeit her public pension after being convicted of one felony count of Corrupting the Government. 

Ursula Stone pled guilty on May 29, 2024, admitting that she abused her position to steal more than $1 million over her 19-year career. Stone’s forfeiture of her state pension as a result of her public corruption conviction will be the first pension forfeiture in New York state.

“Public service is a privilege and a duty. Those who abuse their positions and betray their communities undermine the integrity of government and risk losing their right to a public pension,” DiNapoli said.  “For nearly two decades, Ursula Stone took advantage of her position and the trust of Addison residents to shamelessly steal over a million dollars. Thanks to the work of my office, District Attorney Baker, and the State Police, her crimes were uncovered, and she has been brought to justice. This case should send a clear message that those who dishonor their public office will face serious consequences.”

“The magnitude, scope, duration and pervasiveness of this criminal activity is absolutely stunning,” Baker said.  “For nearly two decades, Ursula Stone abused the trust of the people of the Village of Addison, using her position to steal from their taxes, their schools and their community. The impact of her criminal acts on this community has been and will be felt for decades. But for the dedication and expertise of the New York State Comptroller’s Office it might still be going on unnoticed. This sentence sends a clear message to this defendant about the damage she caused and to anyone else who might consider such crimes about the high price that will be paid. I want to thank the New York State Comptroller Thomas DiNapoli and the members of his office for the incredible effort they put forth in identifying and prosecuting this crime.  Their hard work and cooperation with the New York State Police and my office put us in a place to bring Ursula Stone to justice, and will bring this sad chapter for the village to a close.”

“The sentencing of Ms. Stone demonstrates the vital collaborative work of our law enforcement partners focused on the same goal; holding those who break our laws accountable,” New York State Police Superintendent Steven G. James said. “The victims in this case are the people of New York who put their trust in this former Village of Addison employee. I commend our State Police members, our partners at the State Comptroller’s Office and Steuben County District Attorney’s Office for their commitment to investigating those who prey on the unsuspecting public for their own gain.”

Under a 2011 law* and a 2018 New York state Constitutional Amendment**, certain public officials convicted of crimes related to their office may be subject to pension forfeiture. It is the responsibility of the prosecuting attorney with jurisdiction over the crime to commence an action for pension forfeiture and show the defendant knowingly and intentionally committed a crime related to public office. Here, Stone has admitted to her crimes and agreed to pension forfeiture as part of her sentence. 

Stone, who retired in March 2023, will forgo her monthly pension payment of $1,920.

DiNapoli’s office began an audit of the village in 2022 and found the 56-year-old Stone had been running the financial operations of the village with no oversight. She prepared payroll, maintained manual leave records, and processed health insurance buyouts and unused leave payments with no review or approval from the mayor or any other village official.

Upon subsequent investigation, DiNapoli’s office also discovered that checks from the Addison Central School District, payable to the village, were not deposited into the village’s accounts. A joint investigation by DiNapoli’s office, the New York State Police, and the Steuben County District Attorney’s Office determined that Stone stole dozens of such checks payable to the village, which she converted to certified bank checks and cashed.

Additionally, investigators found Stone gave herself unauthorized pay raises, took time off without deducting it from her leave credits and wrote herself checks for unauthorized health insurance buyouts from village funds. Stone had also been cashing out unused vacation time since 2004, an option that was only available to employees who resigned or retired.

Before submitting her resignation letter, she wrote herself a final check for $26,613, which was not authorized by the board. The board stopped payment on the check before she was able to cash it. In total, investigators say she stole $1,171,362.

Stone is scheduled to be sentenced on Aug. 7 by Judge Chauncey Watches of Steuben County Court and her pension forfeiture ordered by Judge Patrick F. McAllister in Steuben County Supreme Court.

* Pension Forfeiture For Public Officials: See Retirement & Social Security (RSS) Chapter 51-A.

**  In 2017 the Pension Forfeiture for Convicted Officials Amendment was on the ballot in New York State as a legislatively referred constitutional amendment and was approved in 2018. 

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Since taking office in 2007, DiNapoli has committed to fighting public corruption and encourages the public to help fight fraud and abuse. New Yorkers can report allegations of fraud involving taxpayer money by calling the toll-free Fraud Hotline at 1-888-672-4555, by mailing a complaint to: Office of the State Comptroller, Division of Investigations, 8th Floor, 110 State St., Albany, NY 12236 or by filing a complaint online at https://www.osc.state.ny.us/investigations.

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The continuing wrong exception to a time limitation to perfecting an appeal to the Commissioner of Education

In this appeal to the Commissioner of Education the Commissioner found that the majority of the Petitioner’s claims must be dismissed as untimely, noting that an appeal to the Commissioner must be commenced within 30 days from the decision or act complained of, unless any delay is excused by the Commissioner for good cause shown (See 8 NYCRR 275.16). In this instance the Commissioner found that all but one of the claims advanced in Petitioner's appeal occurred "well over 30 days prior to the time the petition was served."  

Petitioner, however, argued that the New York City Department of Education's [Education] placement of a 'problem code' in Petitioner's personnel file constitutes a continuing wrong. The Commissioner concluded that the Petitioner's reliance on the "continuing wrong exception" was misplaced as the continuing wrong exception to the 30-day time limitation "does not apply where a petitioner challenges a single discrete action, inaction, or decision and the resulting effects, even if continuous, are not intrinsically unlawful"*. The Commissioner also noted that the assignment of a “problem code” by Education "was a discrete act that" and is not intrinsically unlawful", citing Kahn v City of New York, 186 AD3d 1159, and other judicial rulings.

As a petitioner is required to appeal within 30 days after he acquired actual knowledge of the problem code and the instant Petitioner admitted he learned of this designation approximately five months prior to commencement of his appeal to the Commissioner, the Commissioner held that each of Petitioner’s claims — except for his challenge to OPI’s denial of [security] clearance — must be dismissed as untimely.

Turning to the merits of Petitioner's appeal, the Commissioner of Education observed that boards of education are prohibited from acting in an illegal, arbitrary or capricious manner. However, in an appeal to the Commissioner the petitioner has the burden of demonstrating a clear legal right to the relief requested and establishing the facts upon which he or she seeks relief. Finding that Petitioner has not proven that Education's denial of Petitioner's request for security clearance was illegal, arbitrary, or capricious. 

Noting that Education advised Petitioner that his " ... prior adverse employment history with the NYC Department of Education is of grave concern when considering your application for security clearance ....  The nature of your reported misconduct is extremely concerning, as you will be expected to always maintain appropriate boundaries with the vulnerable population under your supervision .... Moreover, you seemed to prevaricate requests from ... investigators when asked to provide additional information and documentation throughout the investigatory process, which casts serious doubt on your candor and the veracity of the information you have provided during this investigation", the Commissioner concluded that although Petitioner denies the allegations of classroom impropriety, "he offers no explanation for his unwillingness to cooperate with [the Office of Personnel Investigation (OPI) or the Special Commissioner of Investigation for the New York City School District (SCI),] and found that Education "had a rational basis for denying [Petitioner’s] request for security clearance".**

Finally, considering Petitioner's argument that he has a "right to be employed" by the Board of Education, the Commissioner opined that "qualification for a position 'does not [create] a legal entitlement' thereto", and noted [Education], as does any employer, retains the discretion to refuse to hire an applicant for employment "as long as the refusal is not for a discriminatory or other unlawful reason”***.

The Commissioner opined that the Education's prior discontinuance of Petitioner's probationary employment, "which in turn was permissibly based on ... substantiated misconduct,” and “[Education] quite rationally may review [Petitioner’s] applications for employment more carefully than other applications, conduct investigations of his suitability for the positions he applies for, and deny him employment based on prior performance or conduct detailed in his record of employment with [Education]".

* See Application of Ayers, 48 Ed Dept Rep 350, Decision No. 15,883 and other decisions cited in the Commissioner's decision.

** To the extent petitioner suggested that his conduct was attributable to his disability, the Commissioner noted that any such claim of employment discrimination is outside the scope of an appeal to the Commissioner (See Appeal of Moss and Sealy, 60 Ed Dept Rep, Decision No. 18,001).

*** The Commissioner opined that the Department's prior discontinuance of Petitioner's probationary employment, "which in turn was permissibly based on ... substantiated misconduct,” and “[the Department] quite rationally may review [Petitioner’s] applications for employment more carefully than other applications, conduct investigations of his suitability for the positions he applies for, and deny him employment based on prior performance or conduct detailed in his record of employment with [the Department of Education]”.

Click HERE to access the Commissioner's decision posted on the Internet.

Correction officer found guilty of disciplinary charges alleging using profanity during an altercation and activating two personal body alarms

New York City Office of Administrative Trials and Hearings Administrative Law Judge Joycelyn McGeachy-Kuls recommended a 50-day suspension for a Correction Officer [CO] who engaged in misconduct by using profanity during an altercation and activating two personal body alarms (PBA).

CO had requested to not work overtime due to her health conditions. Despite her request, CO was assigned to work overtime. When CO attempted to leave at the end of her shift, another correction officer refused to open the gate because Employee had not been relieved from her post.

Judge McGeachy-Kuls found that during the ensuing altercation CO used profanity toward another correction officer and a correction captain, activated two PBAs when there was no emergency, and left her post without proper relief.

However, the ALJ found that the Appointing Authority failed to prove that Employee refused an order to submit a report or that she refused to identify herself to a correction captain.

As the ALJ found that the Department did not prove all of the charges and specifications filed against Employee, Judge McGeachy-Kuls decided that a lesser penalty was appropriate and recommended a 50-day suspension without pay in lieu of recommending imposing a 60-day suspension without pay as requested by the Appointing Authority. 

Click HERE to access Judge McGeachy-Kuls decision posted on the Internet.