Five Long Island school districts falsely reported to the state that a part-time private attorney was a full-time employee in each district, enabling him to earn a public pension of nearly $62,000 and health benefits for life.
At the same time, the districts paid his law firm more than $2.5 million in fees, records show.
The attorney, Lawrence W. Reich, was listed as full time by five different school districts at once – Baldwin, Copiague, East Meadow, Bellmore-Merrick High School and Harborfields, according to records supplied by the New York State comptroller’s office. In 2000, for example, he was credited with working 1,271 days in one year. The year before, he was credited with working 1,286 days.
State auditors uncovered the problem seven months ago in Harborfields, but took no action. Yesterday, the state comptroller sent letters to four of the five districts – Baldwin, Copiague, Bellmore-Merrick and Harborfields – notifying them that they would be audited to determine whether they were properly classifying people who provide professional services as employees or contractors.
In a statement, Comptroller Thomas DiNapoli said, “We have decided to take a closer look at this issue to make sure that only those individuals who are entitled to receive a state pension get a state pension.”
Reich defended his arrangement with the districts as “common practice” among attorneys on Long Island.
A Newsday review of records shows that Reich submitted no time sheets, never worked full time for any of the districts and that school officials knew he was only working part time. They allowed him to collect public benefits worth tens of thousands of dollars. His law firm, Ingerman Smith of Northport, knew of the arrangement, as well, the records show. And an official at one district even made light of the situation in a letter warning Reich that there might be a problem with his status and asking him how to “correct the record” of his “employment.”
Records show that Reich drafted contracts setting the compensation for superintendents and other top administrators. School officials told Newsday it wasn’t a conflict of interest for him to do that while he was working as the school attorney because he reported to the boards of education, not the superintendents.
Under Internal Revenue Service rules, a person cannot be paid both as an independent contractor and employee for the same job.