Pension Fund Officials Found Guilty

[Packman41]

Former City Treasurer Jeff Beasley, Pension Fund attorney Ron Zajac and Police and Fire Trustee Paul Stewart were all found guilty today in a case alleging that they defrauded the pension funds by accepting kickbacks and bribes in exchange for approving $200 million in corrupt deals.

http://www.detroitnews.com/story/new...rial/20095097/

They face up to 20 years in prison and will be sentenced on April 21, 2015 – circle your calendars.

Beasley also faces another 10 years after being found guilty on two extortion charges and a single count of bribery.

Both the Detroit Free Press and the Detroit News worked for years uncovering the waste and corruption of both the GRS and the Police & Fire pension funds under the leadership of Ron Zajac.

This is great for the city, the pensioners and the taxpayers that fund they retirement systems.

My only remaining question is: what happened to Marty Bandemer, former DPOA president? I thought he was going to be indicted also. Hmmm…. Anybody know?

[Packman41]

Now we have the answer [partially] why Marty Bandemer was not indicted or convicted – it’s in today’s Detroit News.

http://www.detroitnews.com/story/new...-fbi/20173433/

“Bandemer didn't lie to a federal grand jury about cash he received from businessmen seeking investment money from the pension funds and walked free. Stewart lied and faces up to 20 years in federal prison after being found guilty of conspiracy following a public corruption trial Monday.”

Hmmm…. So Bandemer DID take and keep the money from the developer, Robert Shumake. He DID change his vote on Shumake’s $22 million “investment” proposal before the pension board. But we was NOT indicted.

Still, it doesn’t look good to me.

[Willi]

Slam the door, loose the keys, wait 35 years so no one worries about the "wrong impression"" being made

People need to see Detroit is on a new path and it simply won't tolerate this behavior anymore

[compn]

Stewart is black and found guilty, while Bandemer is white and walks without even being charged.

one lied and one didnt.

Stewart, 57, of Detroit was a 25-year veteran of the Detroit Police Department.
He should have got a better lawyer to instruct him how to handle a grand jury.

fbi polygraphs lol.

[cla1945]

Stewart is black and found guilty, while Bandemer is white and walks without even being charged.

one lied and one didnt.

Stewart, 57, of Detroit was a 25-year veteran of the Detroit Police Department.
He should have got a better lawyer to instruct him how to handle a grand jury.

fbi polygraphs lol.

Don't make this a black/ white thing. The judicial system sucked in this case, they both need to be put away. I personally don't think it's fair, but one got excellent advice, the other didn't. Stewart picked his lawyer, blame that choice instead of making it about race.

[Hypestyles]

bizarre. What changes, if any, have been made to the structure of the pension board, the bylaws, selection process for board members, CLEARLY STATED rules against taking any kind of gifts, money, etc? if this ends up being the same structure, same rules, same behaviors, then what, 4-5 years from now?

[Packman41]

Just ONE big change that needs to be made and it would greatly affect many areas how the funds do business – including accepting bribes. The pension board trustees must be made to follow ERISA rules.

Currently, this is NOT the case. Public employee pension funds are exempt from ERISA – I would change that. Other than representatives from the mayor’s office the trustees are regular folks, e.g. policeman, fireman, or sewer plant operator. They have ZERO training, whatsoever, regarding the evaluation of complex financial investments. Therefore, they need to hire qualified investment advisors to assist them.

ERISA requires all advisors to the pension fund to meet specific qualification standards. None of the prior, real estate or private placement advisors that worked for the two pension funds met those qualifications. Check it out: Robert Shumake did not meet the qualifications. Adrian Anderson did not meet the qualifications. Chauncey Mayfield did not meet the qualifications. Roy Dixon did not meet the qualifications. Joe Capozzoli did not meet the qualifications. I could go on and on.

All were NOT qualified, under ERISA, to advise the pension funds. All [[or their company) paid bribes, or kickbacks, or gifts to some trustees in exchange for their vote on investment decisions. All combined they lost hundreds of millions of dollars for the pension funds.

There is a reason the government enacted ERISA for all trade unions and private pension funds. Lord only knows why they exempted public employee pension funds. Politics I can only guess.

[Smirnoff]

Anybody believe the "mistress" is still involved with Paul?

Are Marty/Paul still engaging in long-neck Sindbad lunches at the same table?

[Packman41]

It is now 9 [[long) months after Jeff Beasley was convicted and we will soon learn his sentence. The Detroit New is reporting that the Feds are asking for a 15 years sentence. This would be the third longest sentence of the 38 people convicted in the long-term Federal probe.
http://www.detroitnews.com/story/new...-say/72265618/

“The trio [Beasley, former pension trustee Paul Stewart and pension fund lawyer Ronald Zajac were convicted] in a high-profile case alleging they defrauded the bankrupt city’s pension funds by accepting kickbacks and bribes in exchange for approving $200 million in corrupt deals.”

“Assistant U.S. Attorney David Gardey wrote in a court filing Monday. Beasley’s decisions as treasurer and trustee were for sale, either to his own direct benefit or to the benefit of his boss, the mayor. Beasley made decisions not based on the best interests of the pensioners or the pension systems, but based on his own greed and the greed of his fellow trustees who joined in the conspiracy.”

Beasley systematically exploited his office to enrich himself, his fellow corrupt trustees, his boss, and the bribe payers desperate to get their hands on the billions of dollars residing in Detroit’s pension systems,”

So what are the odds that Beasley will be sentenced to 15 years?

[Wesley Mouch]

Don't make this a black/ white thing. The judicial system sucked in this case, they both need to be put away. I personally don't think it's fair, but one got excellent advice, the other didn't. Stewart picked his lawyer, blame that choice instead of making it about race.

Disparate impact. Proof that race was a factor. Haven't we agreed yet that results that have a statistical difference prove that the system is racist? Maybe Stewart was deprived of the opportunity for a better lawyer. Lawyers can be guilty of discrimination, too, can't they? But for Stewart's race, he might have got better advice.

[Ray1936]

Seems like every issue that comes up on DetroitYes anymore gets into a racial debate. I think you guys are nuts.

[Wesley Mouch]

Seems like every issue that comes up on DetroitYes anymore gets into a racial debate. I think you guys are nuts.

Sorry, Ray. I couldn't help myself. I will try to stop. Yea. Nuts.

[Honky Tonk]

Just ONE big change that needs to be made and it would greatly affect many areas how the funds do business – including accepting bribes. The pension board trustees must be made to follow ERISA rules.

Currently, this is NOT the case. Public employee pension funds are exempt from ERISA – I would change that. Other than representatives from the mayor’s office the trustees are regular folks, e.g. policeman, fireman, or sewer plant operator. They have ZERO training, whatsoever, regarding the evaluation of complex financial investments. Therefore, they need to hire qualified investment advisors to assist them.

ERISA requires all advisors to the pension fund to meet specific qualification standards. None of the prior, real estate or private placement advisors that worked for the two pension funds met those qualifications. Check it out: Robert Shumake did not meet the qualifications. Adrian Anderson did not meet the qualifications. Chauncey Mayfield did not meet the qualifications. Roy Dixon did not meet the qualifications. Joe Capozzoli did not meet the qualifications. I could go on and on.

All were NOT qualified, under ERISA, to advise the pension funds. All [[or their company) paid bribes, or kickbacks, or gifts to some trustees in exchange for their vote on investment decisions. All combined they lost hundreds of millions of dollars for the pension funds.

There is a reason the government enacted ERISA for all trade unions and private pension funds. Lord only knows why they exempted public employee pension funds. Politics I can only guess.

How do you put unqualified people in charge of investing millions of dollars worth of pension funds, that people will be dependent on for their retirement? Oh wait, it's Detroit, the good ol' boys club.

[Hypestyles]

so how does somebody even get to be a member of any kind of pension board?

[Packman41]

How does one get elected to the pension fund? Simple – follow these steps.

1. Get enough signatures so that your name is on the ballot – NO educational requirements or prior training necessary.
2. Promote your name around the workplace with your co-workers. Tell them you will take care of them if elected.
3. Win the election.

In the GRS Trustee election in August only 509 of 4,844 ballots were returned and of those 509 ballots returned 22 were voided. This left 487 ballots to be counted – or about 10.1% of all eligible voters. http://www.rscd.org/grsd/Active-Empl...-Election-Info

This is how you get lifers on the board such as Thomas Sheehan. Back in 2004 Crains had an item about him and how,”….[Sean] Werdlow [CofD CFO] had called for an audit of pension board travel, particularly that of Thomas Sheehan, a 30-year employee of the city Finance Department that Werdlow supervises. Werdlow criticized Sheehan's having spent 282 days and more than $103,000 while traveling on pension business between 1999 and 2002.”

And today Sheehan is still on the board. How long would you keep your job if you were absent 36% of the time?

http://www.crainsdetroit.com/article...-new-executive

You should also know that trustees receive a $20,000 “bonus” for being a Trustee.

[Richard]

How do you put unqualified people in charge of investing millions of dollars worth of pension funds, that people will be dependent on for their retirement? Oh wait, it's Detroit, the good ol' boys club.

The mob was running the pension funds before and everybody got paid,I wonder what the rate of return was back then verses now?

It would be interesting to see the difference between then and now as it would be pointless to drain the fund to the point where it dissolves any future prospects.

[BankruptcyGuy]

You're right that ERISA doesn't apply to pension funds. They are "exempted" because that's outside of the powers of the US Government [[to tell states how to spend their money). I agree that the lack of regulation is a problem here. Some argue, with some merit, that having state-sponsored defined benefit plans [[instead of defined contribution plans) should be outlawed altogether.

[Wesley Mouch]

You're right that ERISA doesn't apply to pension funds. They are "exempted" because that's outside of the powers of the US Government [[to tell states how to spend their money). I agree that the lack of regulation is a problem here. Some argue, with some merit, that having state-sponsored defined benefit plans [[instead of defined contribution plans) should be outlawed altogether.

Perhaps you can elaborate on the political reasons and conflicts of interests that are in play?

[Packman41]

Prison terms to start soon for Paul Stewart, Jeffery Beasley and Roy Dixon.

http://www.freep.com/story/news/loca...ercy/73030994/

”Ex-Detroit pension trustee Paul Stewart is going to prison for nearly five years for his role in a bribery and kickback scheme that cost city pensioners and police officers $47 million in losses while the businessmen he catered to made off with $5.2 million.”

“Stewart’s sentence came one week after a codefendant, former Detroit Treasurer Jeffrey Beasley, was sentenced to 11 years in prison for his role in the bribery and kickback scheme. Prosecutor say Beasley's actions cost the pension funds $97 million in losses.”

“Atlanta businessman Roy Dixon, who prosecutors said used stolen pension funds to help build an $8-million mansion, was sentenced today to 3 1/2 years in prison for bribing former Detroit Treasurer Jeffrey Beasley with a luxury vacation and $2,000 cash in exchange for favorable treatment before the pension boards.” ….. “Those investments eventually soured and cost the pension funds $47 million in losses while the bribers made off with $5.2 million.”

Dixon embezzled the money with the help of Michael Farr, a former Detroit Lions wide receiver who was never charged with a crime, prosecutors said.

When Dixon’s sentence was announced he screamed “Oh, Jesus!” and fell into a courtroom lectern.

George Stanton, the former chief of staff to ex-Detroit City Councilwoman Alberta Tinsley-Talabi, pleaded guilty to his role in the scheme in 2013 and will be charged tomorrow – Thursday.

Chauncey Mayfield conspired with Beasley to pay him bribes in exchange for new business from the pension funds. Mayfield will be sentenced Oct. 7.

[Ray1936]

I'm losing the last of my health insurance from the C of D on January 1. Will have to pay my own way, which I can handle, but Marge's insulin and other scripts will cost over a thousand a month. Even Medicare Part D plans, with the large deducatble and 'donut hole' problem, will really hurt. Gonna be tough to find someone who will hire a 79 year old, I guess.

[Jimaz]

... insulin and other scripts will cost over a thousand a month.... will really hurt. Gonna be tough to find someone who will hire a 79 year old, I guess.

Have you considered buying from a Canadian pharmacy? [[Or maybe from your location, Mexican.) Seriously, some people have had success going that route.

[Honky Tonk]

Prison terms to start soon for Paul Stewart, Jeffery Beasley and Roy Dixon.

http://www.freep.com/story/news/loca...ercy/73030994/

”Ex-Detroit pension trustee Paul Stewart is going to prison for nearly five years for his role in a bribery and kickback scheme that cost city pensioners and police officers $47 million in losses while the businessmen he catered to made off with $5.2 million.”

“Stewart’s sentence came one week after a codefendant, former Detroit Treasurer Jeffrey Beasley, was sentenced to 11 years in prison for his role in the bribery and kickback scheme. Prosecutor say Beasley's actions cost the pension funds $97 million in losses.”

“Atlanta businessman Roy Dixon, who prosecutors said used stolen pension funds to help build an $8-million mansion, was sentenced today to 3 1/2 years in prison for bribing former Detroit Treasurer Jeffrey Beasley with a luxury vacation and $2,000 cash in exchange for favorable treatment before the pension boards.” ….. “Those investments eventually soured and cost the pension funds $47 million in losses while the bribers made off with $5.2 million.”

Dixon embezzled the money with the help of Michael Farr, a former Detroit Lions wide receiver who was never charged with a crime, prosecutors said.

When Dixon’s sentence was announced he screamed “Oh, Jesus!” and fell into a courtroom lectern.

George Stanton, the former chief of staff to ex-Detroit City Councilwoman Alberta Tinsley-Talabi, pleaded guilty to his role in the scheme in 2013 and will be charged tomorrow – Thursday.

Chauncey Mayfield conspired with Beasley to pay him bribes in exchange for new business from the pension funds. Mayfield will be sentenced Oct. 7.

"bribing former Detroit Treasurer Jeffrey Beasley with a luxury vacation and $2,000" Seems like Jeffrey Beasley sold out City employees for 30 pieces of silver.

"Roy Dixon used stolen pension funds to help build an $8-million mansion, he screamed “Oh, Jesus!” and fell into a courtroom lectern" Too bad he didn't fall onto a pointed spire. Looks like he suddenly found religion, Jesus my ass. If you ask me, and nobody did, for the amount of damage to people's lives these yahoos did, and the amount of money that was stolen, each sentence is too light. I hope some of their ill gotten goods are confiscated, sold, and the money put back into the fund. F these assholes.

[Packman41]

Ray:

Damn shame what happened. Truly sorry for you.

You and the other PFRS retirees trusted fellow DPD officers and union leaders Marty Bandemer and Paul Stewart to do right by you. They pissed away millions of pension fund money by accepting bribes for their own personal gain.

And where are “pension advisors” like Robert Shumake that paid the bribes to them? Shumake wasn’t even indicted and may never be indicted. Instead he is promoting himself as a “#1 Best Selling Author, International Business Strategist, Philanthropist, Diplomat, CEO” in an effort to cover up all of his negative publicity with the pension funds.

[old guy]

"bribing former Detroit Treasurer Jeffrey Beasley with a luxury vacation and $2,000" Seems like Jeffrey Beasley sold out City employees for 30 pieces of silver.

"Roy Dixon used stolen pension funds to help build an $8-million mansion, he screamed “Oh, Jesus!” and fell into a courtroom lectern" Too bad he didn't fall onto a pointed spire. Looks like he suddenly found religion, Jesus my ass. If you ask me, and nobody did, for the amount of damage to people's lives these yahoos did, and the amount of money that was stolen, each sentence is too light. I hope some of their ill gotten goods are confiscated, sold, and the money put back into the fund. F these assholes.

I agree with all of that. How can criminals like this get prosecuted and receive such light sentences. The court system that handed down these sentences should be under tight scrutiny.

[Ray1936]

Have you considered buying from a Canadian pharmacy? [[Or maybe from your location, Mexican.) Seriously, some people have had success going that route.

Would be a possibility, but insulin is heat-sensitive. Not good to get in the mail here in Las Vegas.