KLEPT, Maywood Police Pension Fund forfeits $227K [M]
I wrote about the main findings of the audit of the Maywood Police Pension Fund.
Here's the quote that's a big deal:
My understanding is that Eugene Moore is the one that caused the investments to be moved causing them to pay the $227K in penalties.
My understanding is that this is against the law.
But it gets worse for Moore. The hypothesis I've heard is that Moore moved the money to Metropolitan, the company he sells insurance for. The reason Moore was eager to get the money into Met's funds is that he could easily move the money from fund to fund with Metropolitan. From the outside it would look like the money was all invested with Metropolitan. But each time it moved Moore would be generating commissions for himself.
This practice is called "churning" and it is also illegal. If Moore was churning the Maywood Fire and Police Pension Fund, it seems somewhat unfair for the Maywood taxpayers to cover the losses.
The police control three of the five votes on the board. Two are elected by the current police and one is elected by the pensioners.
The two issues:
1. To what extent was Moore's conduct illegal?
2. To what extent are Maywood taxpayers being forced to pay for mistakes that are at least partially the fault of the police and Metropolitan?
Here's the quote that's a big deal:
According to board minutes furnished the examiner, and the annual statement for FY 1997 filed with the Department of Insurance, the board incurred surrender changes in excess of $227,000 on several surrendered annuity contracts.
My understanding is that Eugene Moore is the one that caused the investments to be moved causing them to pay the $227K in penalties.
My understanding is that this is against the law.
But it gets worse for Moore. The hypothesis I've heard is that Moore moved the money to Metropolitan, the company he sells insurance for. The reason Moore was eager to get the money into Met's funds is that he could easily move the money from fund to fund with Metropolitan. From the outside it would look like the money was all invested with Metropolitan. But each time it moved Moore would be generating commissions for himself.
This practice is called "churning" and it is also illegal. If Moore was churning the Maywood Fire and Police Pension Fund, it seems somewhat unfair for the Maywood taxpayers to cover the losses.
The police control three of the five votes on the board. Two are elected by the current police and one is elected by the pensioners.
The two issues:
1. To what extent was Moore's conduct illegal?
2. To what extent are Maywood taxpayers being forced to pay for mistakes that are at least partially the fault of the police and Metropolitan?
posted by Carl Nyberg at
4:46 PM
5 Comments:
Wow. Is this true and if it is how does this kind of thing happen?
By
Anonymous, at 9:57 PM, December 19, 2005
Mayor Yarbrough has just appointed Charles Flowers, with Board consent, to serve on the Police Pension Board. For years the Village Board struggled to try to force the Pension Board to provide themselves, their members, and the Village Board with an independent audit. We have never had this problem with the Firefighters Pension Board. Could the Police appointees be buddy buddy with Gene Moore? Could Gene Moore have done something "illegal" to maximize his so-called earnings. I have no idea. It's sad because the village is trying to do its part in catching up on taxpayer property tax contributions to the pension fund and, then, if through mismanagement and/or corruption, there is far less money sitting in their investment and pension payout pools, it is the Maywood taxpayer and future penionees that will bear the brunt. Happy holidays to all who view this blog seriously and without the anonymous ridiculous lanaguage.
By
Anonymous, at 9:33 AM, December 24, 2005
Mr. Woll, how does this happen where you have a public body who is responsible to make sure that these culprits don't do something against their interest? Are you saying that you and your board can't get an audit from a pension board and you still put money in? Are you also saying that the people you appoint (police) would make a deal with the devil against their own interest and if so why? I'm sorry if I appear uninformed but somehow this doen't make sense. do other towns have this problem? Who is looking out for the taxpayer? the police? the widows and orphans if a policeman is fatally wounded in the line of fire?
Carl, this thread doesn't make sense without the original posting and now I don't remember everything. It's a convoluted issue anyway.
By
Anonymous, at 8:45 PM, December 24, 2005
The Maywood Police Pension fund was invested in a fund that didn't charge a traditional commission. But if the money was withdrawn before seven years, the Maywood Police Pension fund paid a penalty.
Under the guidance of Eugene Moore the money was moved before the seven years and the fund incurred a penalty of $227,000.
It is illegal under Illinois law for public sector pension funds to incur this type of penalty.
Once the money was moved the possibility has been discussed that Moore engaged in other activities that caused the Maywood Police Pension fund to lose money.
The possibility exists that Moore was moving the investments from fund to fund within Metropolitan. The practice of moving money from fund to fund for the purpose of generating a commission, but without benefit to the client--in this case the Maywood Police Pension fund--is called "churning". This activity is also illegal.
The Village of Maywood should hold a hearing and interview Eugene Moore. If Moore has a reasonable explanation, the village should know what it is. If Moore invokes his Fifth Amendment rights not to implicate himself in criminal activity, then the village and voters can infer Moore wasn't doing anything good for them.
If Moore spouts a bunch of goobly-gook, people will have to look past the bullshit.
By
Carl Nyberg, at 6:14 PM, December 25, 2005
How funny for Woll to attack Gene Moore for the problems of the pension funds. First he was in Moore's camp when all of this allegations occoured and second the main reason the fund in underfunded is because he voted to underfund the fund since 1997. I guess he is trying to kiss up to the Yarbrough's and hope that we all forget about his past politics.
It must be an election year!!
By
Anonymous, at 6:31 PM, January 06, 2006
Post a Comment
<< Home