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Ex-state employee sent to prison for $1M-plus fraud seeks to restore her Utah retirement

First Published      Last Updated Jun 30 2017 11:58 am


Ex-state worker who stole $1M from public lost her pension under 2016 law that lawyer says she is exempt from.

A former state employee who pleaded guilty to fraud in a $1 million embezzlement of public funds is seeking to have her retirement benefits restored.

An attorney representing Patricia Nelson, who was sentenced last month to 27 months in prison, appeared before the Utah Communications Authority (UCA) board Wednesday to make her case. The UCA oversees Utah's 911 system and emergency communications statewide.

Attorney Doug Stowell asked the agency to retract its decision that Nelson committed an employment-related offense and allow her to collect her state retirement benefits. The board denied the request but moved to refer the issue to the Utah Retirement Systems (URS) for consideration.




URS later told The Salt Lake Tribune that while it does not discuss the cases of individual members, the retirement agency does not involve itself in determining whether a member's benefits are forfeited.

Nelson lost her retirement benefits under a law passed last year directing that state employees convicted of some employment-related criminal offenses forfeit benefits.

At issue is whether, as Stowell argues, Nelson is exempt because the crime was committed before the law's effective date — May 10, 2016. Nelson pleaded guilty and was sentenced May 4, 2017. But UCA has records documenting the embezzlement back to Nov. 8, 2005.

Arguments between the board and Stowell centered around the wording of the law. Stowell said the way the law was written, it shouldn't affect her retirement benefits. Citing the HB 439, Stowell said, "[The law] has to be expressly declared to be retroactive. This is not in the statute."

UCA Chairwoman Tina Mathieu rebutted his argument, pointing to a line in the law that says it applies to any employee convicted on or after the May 10, 2016, effective date.

If Nelson's retirement forfeiture holds, this would be the first time that HB439 is used against a former state employee. State Rep. Dan McCay, R-Riverton, sponsored the legislation and believes there is no wiggle room in the UCA case.

"HB439 absolutely should apply to this situation," he told The Salt Lake Tribune. "The conviction occurred after the bill was passed, so it's applicable."

Before Nelson was criminally charged, UCA negotiated a payment plan for a $2,328,000 civil judgment, including interest. Part of the agreement, Stowell argued, was that UCA would not go after Nelson's assets beyond what she agreed to repay in the judgment.

Restricting her retirement is a breach of that agreement, he said. UCA officials, however, said that Nelson didn't follow through with the payment plan, so they aren't compelled to abide by the other conditions. Board members said if they didn't go after the retirement money, they would be cheating taxpayers.

"What I'll contend is that Nelson stole 40 cents from you, me and every other Utahn," said board member Mike Mathieu, referring to the $1.2 million embezzlement, divided by the state population.

Nelson and her daughter admitted in the civil suit to using five agency credit cards for personal purchases over more than a decade — including exotic vacations, liquor, toys, pet supplies and home repair.

A share of the money also went toward the mortgage payment on her daughter's $400,000 house. They were caught when a technician found a falsified credit card statement left on one of the agency's printers.

The UCA board on Wednesday did not publicly discuss the value of Nelson's retirement benefits.

She was a longtime public employee, the top assistant to former UCA director Steven Proctor.

Her base wage — excluding benefits — added up to slightly more than $50,000 yearly, based on an hourly rate of $24.15, according to records obtained by The Tribune through an open-records request.

 

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