Posted on 01/06/2006 1:34:40 PM PST by NormsRevenge
SAN DIEGO A federal grand jury returned an indictment in the pension fund case Friday afternoon. Its details are to be announced at 2 p.m.
The jury's foreman and federal prosecutor John Owens stood before U.S. District Judge Irma Gonzalez shortly before 1 p.m. to notify the judge and get her signature on the document.
Nothing was revealed about its contents, and Owens declined to discuss it outside of court, but the U.S. Attorney's office has scheduled a news conference for 2 p.m. at its downtown offices.
I'm out of the loop. Can you fill me in on this story?
The SD U-T has a link with a lot of background leading up to this announcement.
http://www.signonsandiego.com/news/metro/pension/index.html
FR has a lot of info as well, which can be accessed thru keywords like san diego.
To sum it up, bad things happened that will show some of the leadersip of san diego government culpable for mismanagement for whatever reasons.
The SEC has been investigating this for well over a year.
Oh Oh Oh Yeah! I think it's been almost 3 years they've been working on this case. I'm anxiously awaiting this. Ok... nervously, but still.
Ever notice they always wait until late on Friday afternoon to do this stuff! :P
the wheels of justice grind exceedingly slow, especially if the feds are involved. ;-)
San Diego's Pension Crisis
Pension troubles: A timeline
http://www.signonsandiego.com/news/metro/pension/pensiontimeline.html
A pension crisis marked by a growing deficit in the retirement fund has staggered San Diego city government for months. Now, six current and former members of the retirement board face felony conflict-of-interest charges brought by the district attorney. Decisions leading to the pension crisis began in the 1990s.
San Diego's Pension Crisis: Archive
http://www.signonsandiego.com/news/metro/pension/archive.html
Thanks.
Next time could you please be more thorough?
I wish I could take ya thru it, hopefully the indictments to be handed out will allow ya to get up to speed real quick.
I and a few others spent quite a bit of time posting threads on it for awhile, but won't even pretend to be expert on it for that reason alone. :)
Conflict of interest charges agianst pension board member will likely be the main thrust of the indictments. whether conspiracy charges also come into play will be divulged shortly.
btw, thanks for bumping , it reminds me I have a case of SamAdams 2005 assortment brew pack that I should toss in the FRidge for the playoffs. :)
still waiting for list..
SAN DIEGO A federal grand jury returns 20 indictments in the pension fund case Friday afternoon. Its details are being announced at 2 p.m.
San Diego's pension crisis: Key players
http://www.signonsandiego.com/news/metro/pension/pensionplayers.html
From http://www.nbcsandiego.com/news/5892373/detail.html
We have a WEINER! Well, 5 of them so far....
Feds Indict Pension Officials For Fraud, Conspiracy
POSTED: 1:55 pm PST January 6, 2006
UPDATED: 2:12 pm PST January 6, 2006
SAN DIEGO -- Federal prosecutors announced Friday that a grand jury has indicted one current and four former San Diego city pension officials for fraud and conspiracy.
The indictments named several officials who were already charged with felony violations in May by San Diego County District Attorney Bonnie Dumanis .
The former officials named in the indictment include:
Cathy Lexin
Ronald Saathoff
and Terri Webster
Lawrence Grissom
Loraine Chapin
Refresh this story for more information on this developing story.
I wonder where the rest are.....
BTTT
Thanks!
probably multiple charges involved
May 17, 2005
May 17: Bonnie Dumanis announces that felony conflict-of-interest charges (2, 3) have been filed against Webster; Vattimo; Lexin; Ron Saathoff, a fire captain and president of the firefighters union; John Torres, vice president of a city employees union; and Sharon Wilkinson, a city management analyst. Torres is a retirement board trustee. The others are past trustees.
Looks like Grissom and Chapin are the new add-ons to ones already charged last year.
Five indicted: Ron Saathoff, Cathy Lexin, Terri Webster, Larry Grissom, Loraine Chapin
Updating thread with article with specifics
SAN DIEGO Four former top officials in San Diego's city pension system and the system's lawyer were charged with wire fraud, mail fraud and conspiracy to commit wire and mail fraud in a 20-count indictment issued by a federal grand jury Friday afternoon.
U.S. Attorney Carol Lam announced the charges against former San Diego City Employees' Retirement System Trustees Ronald Saathoff, Cathy Lexin and Teresa Webster; and the system's former Administrator Lawrence Grissom and its current General Counsel Loraine Chapin.
"The defendants had a duty to act in the best interest of the city retirement system," Lam said. "They breached that duty by engaging in self-dealing, ignoring conflicts of interest, and exploiting their positions to the detriment of the retirement system."
Federal prosecutors contend that fellow trustees were deceived by the defendants, who concealed material information about the pension plan, including the fact that Saathoff would receive an increase in his yearly retirement of more than $25,000 if the SDCERS board enacted a controversial measure known as Manager's Proposal 2.
The criminal charges are at least the initial results of the U.S. Attorney's Office yearlong investigation into San Diego's underfunded pension system, a scandal that has shaken city government and left its finances a shamble.
The federal investigation focused on Manager's Proposal 2, the 2002 deal in which pension board members allowed the city to continue underfunding SDCERS something the city had been doing since 1996 in exchange for granting increased benefits to employees.
The pension board approved the plan in November 2002 and the City Council approved it three days later.
The agreement enabled the city to avoid making a balloon payment of as much as $100 million an amount that would have been a huge chunk of the city's annual general fund.
Federal prosecutors said that to encourage board members to support the proposal, Lexin, Webster, Grissom and Chapin helped design and implement the "presidential leave retirement benefit," a clause that would increase Saathoff's benefit by more than $25,000 per year. He would get the increase only if the pension board voted to adopt the proposal.
Saathoff made the motion that ultimately put the proposal into effect.
The retirement system's deficit is estimated to be at least $1.4 billion, largely because of the underfunding, benefit increases and stock-market losses from 2000 to 2002.
Lexin, Saathoff and Webster and three other pension figures already are being prosecuted on state conflict-of-interest charges by the county District Attorney's Office.
The city's finances also are the subject of continuing investigations by the Securities and Exchange Commission and the FBI.
Grissom and Chapin were identified as targets of the federal investigation last month, when the pension board approved a plan to indemnify, or compensate, the two for any legal expenses they may incur as a result of their jobs.
Grissom retired at the end of December, but still consults for the pension system until it hires a permanent replacement.
Failure to disclose
Federal investigations into city finances, allegations of securities fraud and possible public corruption began in 2004 in the wake of the city auditor's sudden resignation. The pension fund's deficit was not disclosed in documents related to bond issues until 2004.
In the county criminal case, six current and former members of the pension board are accused of violating state conflict-of-interest laws in 2002. Defense lawyers are scheduled to begin presenting their evidence in the lengthy preliminary hearing in the case when it resumes Monday.
County prosecutors contend the six defendants benefited because they received heftier retirement packages after they approved the underfunding. The deal also carved out special benefits tailored for two pension board members.
A key element of that case is whether there was a link between the underfunding and the benefit enhancements, a quid pro quo arrangement.
Defense attorneys have argued the two actions were not connected and that their clients had no financial interests at stake.
Scandal's impact
The pension crisis has been disastrous for the city's already shaky budget, accounting for millions of dollars in bills for outside legal services, internal inquiries and audits.
The accounting firm KPMG has yet to sign off on the city's 2003 financial statements, the city's credit ratings have been in a dive for almost two year and its ability to borrow money has been severely curtailed.
The pension scandal also has changed the political landscape of the city.
Just days after being branded one of the nation's worst big-city mayors in April 2005 by Time magazine, Mayor Dick Murphy announced he would resign from office, saying San Diego needed a fresh start. He resigned in July and has been replaced by Jerry Sanders, the former police chief who took office last month.
City Attorney Michael Aguirre has made investigating the fiscal scandal a central theme of his first year in office, and has released seven interim reports on the city's pension problems.
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