Whether an employee’s benefits under the Florida Retirement System (the “FRS”) may be reinstated after being forfeited pursuant to Florida Statutes Section 112.3173(3) as a result of his or her felony conviction?
Individual sold on items for personal gain, property owned by the Brevard County School Board. Individual was placed under investigation for his conduct and was given the opportunity to retire. After his retirement, he was charged with organized fraud and pled guilty and was adjudicated guilty for the felony charge. Individual later received Notice from the Florida Department of Management Services (“the Department”) that, due to his adjudication, he forfeited his benefits under the FRS.
Probably not. Once it is established that a public employee has been convicted of almost any felony which was committed during his employment and which somehow relates to his job, the court is very likely to uphold the Department’s decision to forfeit FRS benefits under Florida Statute 112.3173(3).
Article II, Section 8(d) of the Florida Constitution provides, “[a]ny public officer or employee who is convicted of a felony involving a breach of public trust shall be subject to forfeiture of rights and privileges under a public retirement system or pension plan in such manner as may be provided by law.”
Florida Statutes Section 112.3173(3), which implements Section 8(d) provides:
“Any public officer or employee who is convicted of a specified offense committed prior to retirement, or whose office or employment is terminated by reason of his or her admitted commission, aid, or abetment of a specified offense, shall forfeit all rights and benefits under any public retirement system of which he or she is a member, except for the return of his or her accumulated contributions as of the date of termination.”
- Specified Offenses
Section (5)(b) makes any order of forfeiture of retirement system rights and privileges appealable to the district court of appeal. Under Florida law, the Department’s final order may be set aside “only upon a finding that it is not supported by substantial, competent evidence in the record or that there are material errors in procedure, incorrect interpretations of law, or an abuse of discretion.” Bollone v. DEPT. OF MGT. SERVS., 100 So. 3d 1276 (Fla. 1st DCA 2012) (Citing Hames v. City of Miami Firefighters’ & Police Officers’ Trust, 980 So.2d 1112, 1114 (Fla. 3d DCA 2008)).
On of the main arguments against the Department’s decision to forfeit an employee’s FRS benefits is that the employee was never convicted of a “specified offense.” Section 112.3173(2)(e) defines specified offense as theft or embezzlement of public funds, bribery, certain felonies under Florida Statute 838, and impeachable offenses. Part (2)(e)(6) further provides a “catch-all” section which includes as specified offenses;
“The committing of any felony by a public officer or employee who, willfully and with intent to defraud the public or the public agency for which the public officer or employee acts or in which he or she is employed of the right to receive the faithful performance of his or her duty as a public officer or employee, realizes or obtains, or attempts to realize or obtain, a profit, gain, or advantage for himself or herself or for some other person through the use or attempted use of the power, rights, privileges, duties, or position of his or her public office or employment position.”
Florida courts have construed this section very broadly as to apply to almost any felony, so long as the acts committed were related to the public employee’s job duties. “In order to constitute a “specified offense” under section (2)(e)(6), the criminal acts must be: (a) a felony; (b) committed by a public employee; (c) done willfully and with intent to defraud the public or the employee’s public employer of the right to receive the faithful performance of the employee’s duty; (d) done to obtain a profit, gain or advantage for the employee or some other person; and (e) done through the use or attempted use of the power, rights, privileges, duties, or position of Appellant’s employment.” Bollone v. DEPT. OF MGT. SERVS., 100 So. 3d 1276, 1281 (Fla. 1st DCA 2012).
The first District explained, “the term ‘specified offense’ is defined by the conduct of the public official, not by the elements of the crime for which the official was convicted.” Bollone v. DEPT. OF MGT. SERVS., 100 So. 3d 1276 (Fla. 1st DCA 2012) (Citing Jenne v. State, Dep’t of Mgmt. Servs. Div. of Ret., 36 So.3d 738, 741- 743 (Fla. 1st DCA 2010)); Id (“For example, the crime of conspiracy to commit mail fraud “might not meet the definition of a specified offense if the public officer were to use the mail unlawfully in a private venture without disclosing the office held and without obtaining a benefit by virtue of the office. In contrast, this crime could meet the definition if a public officer had used the mail to solicit a bribe in return for a favor performed at the expense of the public.”)
In Bollone, a public employee used his work computer to view child pornography. The First District affirmed the Department’s finding that this crime fell within the statute’s catch-all provision. The court reasoned “[t]he public . . . had a right to expect [he] would not use the computer entrusted to him for criminal activity”; and that “[t]he public was defrauded when [he] used that public property to further his private interest in the possession of child pornography.” Bollone, 100 So. 3d at 1281. The court disagreed with the employee’s argument that he did not realize or obtain a profit, gain, or advantage as a result of his conduct, as required by the statute. The court reasoned section (2)(e)(6) is not limited to only economic gain. Id (citing Jacobo v. Bd. of Trustees of Miami Police, 788 So.2d 362, 363 (Fla. 3d DCA 2001)). The court was further unconvinced with his argument, that the evidence failed to establish he “used or attempted to use the power, rights, privileges, duties, or position of his public employment position.” Id In the court’s view, his use of the public computer alone was a power, right, and privilege of his position and “but for the power, rights, privileges, or duties of [his] public employment, [he] would not have been able to use his TCC work computer to acquire, possess, or view child pornography. Id at 1282.
Here, was convicted of organized fraud. This offense does not seem to be specifically listed in the statute, thus the inclusion of this crime as a specified offense would depend on whether the offense meets all of the factors of the catch-all provision of section (2)(e)(6). Firstly, organized fraud is unarguably a felony under Florida law and it further cannot be disputed that he was a public employee. His plea of guilt would likely be sufficient to establish intent since the intent is an element of criminal fraud. However, the Department will have to prove that his intent was to defraud the public or his employer. The Department will argue that client obviously defrauded the public’s and his employer’s trust as neither expected that he would use the School Board’s property which was likely purchased using taxpayer’s funds, for his personal economic gain. It could easily be inferred that his purpose in selling the State’s property was for profit and personal gain. Finally, the Department can easily show that the position helped him gain him access to the State’s property which he would not otherwise have had.
- Conviction Prior to Retirement
Another common complaint on appeal has occurred in the situation where the employee is not convicted until after he or she retires. The forfeiture statute applies to “any public officer or employee who is convicted of a specified offense committed prior to retirement. . .” Under this provision, Florida law determined “it is clear that the time the offense is committed controls forfeiture, not the time of the ultimate conviction.” Garay v. DEPARTMENT OF MANAGEMENT SERVICES, 46 So. 3d 1227, 1228 (Fla. 1st DCA 2010); Busbee v. State, Div. of Ret., 685 So. 2d 914, 916-17 (Fla. 1st DCA 1996).
In Garay, one year after he retired, a public employee was adjudged guilty of four crimes which involved altering agency records and diverting funds for his own use. FRS did not learn of his conviction until around three years thereafter. Four years after his retirement and receipt of benefits, the Department investigated the employee and eventually discovered that the conduct for which he was charged occurred during his public employment. The Department then notified the employee of the forfeiture of his FRS benefits.
Upon appeal, the court rejected Mr. Garay’s argument that it was improper for FRS to require forfeiture since he was already retired and receiving benefits. The court stated, [u]nder Mr. Garay’s theory, an employee would need only retire before being convicted of a qualifying offense to avoid the consequences of the forfeiture statute.” This interpretation, the court stated, is “in conflict with the express language of the Florida Constitution and Florida Statutes” and “would render the forfeiture statute a nullity.” Garay v., 46 So. 3d at 1229; See also Kerner v. State Employees’ Ret. Syst., 72 Ill.2d 507, 21 Ill.Dec. 879, 382 N.E.2d 243, 246 (Ill. 1978) (“[U]nder plaintiff’s theory, an employee need only retire prior to his conviction of a felony in order to render the entire statute meaningless.”); Horsley v. Philadelphia Bd. of Pensions & Ret., 519 Pa. 264, 546 A.2d 1115, 1118 (1988) (“To hold otherwise would unfairly advantage those corrupt and felonious City employees who are fortuitous enough to avoid detection of their crimes until after they leave the City’s employ: a result which would be both absurd and unreasonable.”); Hames v. City of Miami, 479 F.Supp.2d 1276, 1288 (S.D.Fla.2007), aff’d as modified, 281 F. App’x 853 (11th Cir.2008) (citing Kerner andHorsley and noting the ease with which employees could manipulate the application of the forfeiture statute by timing their retirement).
Here, the person had retired prior to his conviction and had been receiving FRS benefits. More importantly, however, it has been established that the actual conduct which led to his conviction occurred during his employment rather than during his retirement. As such, the court is very unlikely to overturn the Department’s decision to forfeit his benefits based on his conviction.
Public employees have attempted to challenge the fairness of the entire provision as a whole. Section 112.3173(3) has been subjected to several constitutional challenges including, but not limited to challenges under the Due Process, Equal Protection, and Double Jeopardy clauses of the U.S. and Florida Constitutions and the Excessive Fines Clause of the Eighth Amendment of the U.S. Constitution. However, Florida Courts have, generally, found these challenges to be without merit. See Busbee v. State, 685 So. 2d 914, 915 (Fla. 1st DCA 1996); Pilkay v. CITY OF TAMPA, GEN. EMP. PEN. FUND, 505 So. 2d 1100 (Fla. 2nd DCA 1987); Childers v. State, 989 So. 2d 716 (Fla. 4th DCA 2008); Brock v. DEPT. OF MANAGEMENT SERVICES, 98 So. 3d 771 (Fla. 4th DCA 2012).
In Busbee v. State, 685 So. 2d 914 (Fla. Dist. Ct. App. 1996), the First District reasoned that, since the provision existed when he voluntarily elected to become a member of the FRS, the provision was part of the pension contract between Mr. Busbee and the state. Busbee, 685 So. 2d at 916. Based on this reasoning, the court decided that no excessive punishment or due process concerns were implicated: Instead, the state was “simply enforc[ing] the terms of Mr. Busbee’s pension contract.” Id at 917-918; See also Childers v. State, 989 So. 2d 716, 719 (Fla. 4th DCA 2008).