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Devoney v. Retirement Board of the Policemen's Annuity and Benefit Fund of the City of Chicago

March 26, 2001

WILLIAM DEVONEY, PETITIONER-APPELLANT,
v.
THE RETIREMENT BOARD OF THE POLICEMEN'S ANNUITY AND BENEFIT FUND OF THE CITY OF CHICAGO, RESPONDENT-APPELLEE.



The opinion of the court was delivered by: Justice O'mara Frossard

Appeal from the Circuit Court of Cook County Honorable Lester D. Foreman, Judge Presiding.

Petitioner, William Devoney, a former Chicago police lieutenant, appeals the circuit court's decision to affirm the order of the Retirement Board of the Policemen's Annuity and Benefit Fund of the City of Chicago (Board) denying him pension benefits as a result of his federal conviction for mail fraud. Petitioner contends the Board's interpretation of section 5-227 of the Illinois Pension Code (Code) (40 ILCS 5/5-227 (West 1998)) regarding the relationship of felony convictions to forfeiture of pension benefits was contrary to law, that the Board's decision to apply the forfeiture provisions of section 5-227 of the Code (40 ILCS 5/5-227 (West 1998)) was against the manifest weight of the evidence and that he was entitled to prejudgment interest pursuant to section 2 of the Interest Act (815 ILCS 205/2 (West 1998)). We affirm.

Petitioner was appointed to the Chicago police department in 1960 and attained the rank of lieutenant. On October 20, 1994, petitioner and 24 other persons were indicted by a federal grand jury for conspiracy to commit insurance fraud. Petitioner was named in one count charging mail fraud. He resigned from the police department the following month. On November, 7, 1994, petitioner entered into a written plea agreement with the United States Attorney's office and pled guilty to the charge of mail fraud. In August 1995, the Board refused petitioner's application for retirement benefits on the basis of this felony conviction.

Petitioner testified at a hearing before the Board in September 1995 that he pled guilty to one count of the 61-count federal indictment. This count charged that petitioner and two others, Matt Raimondi and David Ballog, Jr., devised a scheme to defraud and obtain money from an insurance company. Ballog approached petitioner about the scheme to defraud, and petitioner agreed to participate. The count alleged that, as part of the scheme, petitioner conspired with his neighbor, Raimondi, and Ballog to give a false report about the place of a personal injury accident involving petitioner's wife, caused a physician to change a report about the place of the accident, and spoke with insurance adjustors relating to the claim. Petitioner also used the United States Postal Service to mail evidence of wage losses. Ballog pretended to be petitioner's brother- in-law and helped negotiate a $70,000 settlement for the false claim regarding personal injury to petitioner's wife.

On November 7, 1994, petitioner entered into a plea agreement with the United States Attorney's office and admitted to the facts alleged within the indictment. On June 21, 1995, the federal district court sentenced petitioner to 16 months of imprisonment, plus supervised release and restitution. The Board had before it the indictment and the sentencing transcript. Petitioner admitted before the Board that he was a police officer entitled to carry a weapon at the time of the fraud and part of his duties were to arrest those who committed crimes in his presence.

Petitioner next testified that he had known co-defendant David Ballog for 10 years, and he knew that Ballog gambled on horse races, but otherwise had no knowledge of Ballog's criminal activity. After petitioner's wife broke her ankle, Ballog proposed a scheme to defraud an insurance carrier. Petitioner admitted that he did not arrest or report Ballog to the authorities. In connection with this false claim, petitioner spoke with the insurance adjustor. In response to a question from the insurance adjustor, he informed the adjustor that he was a lieutenant with the Chicago police department, but he never met with the adjustor while in uniform. Petitioner did not witness his wife's fall, and his neighbor, Raimondi, with petitioner's knowledge, submitted a false claim to his insurance carrier regarding petitioner's wife. Petitioner did not arrest or report Raimondi.

On July 23, 1998, the Board voted to deny petitioner's application. In a seven-page order, the Board stated that it reviewed the indictment, petitioner's plea agreement, and the transcript of petitioner's sentencing hearing. During the sentencing hearing, the victim of a March 1994 sexual assault testified she believed that petitioner had interviewed her under a false name in an attempt to get her to withdraw her identification of her assailant, who was related to Ballog. Petitioner disputed this testimony and called witnesses to demonstrate that he did not interview the sexual assault victim. The retired police officer whom petitioner was alleged to have impersonated testified that he was the one who interviewed the victim. This credibility issue was considered at length at the sentencing hearing, and the district court determined that the prosecution had proved by a preponderance of the evidence that petitioner interfered with the investigation of the sexual assault. The federal court increased petitioner's sentence based on his obstruction of justice.

Ballog testified at the sentencing hearing that in 1989 he asked petitioner to find out about an outstanding warrant against him. Petitioner loaned Ballog $5,000 for his mortgage payment and gave Ballog $8,500 from the insurance settlement of petitioner's wife's claim. The Board also considered the federal court's finding that petitioner's conduct regarding the sexual assault case was not directly involved with the fraud count, but that petitioner had obstructed justice by hiding the facts involved.

The Board relied on section 5-227 of the Code, entitled "Felony conviction," which states in part: "None of the benefits provided for in this Article shall be paid to any person who is convicted of any felony relating to or arising out of or in connection with his service as a policeman." 40 ILCS 5/5-227 (West 1998). The Board then found that petitioner had engaged in a "scheme to defraud" which involved his "knowing use of his position as a Chicago Police Officer." It further found that petitioner had obstructed justice in the sexual assault case. Petitioner was not considered to be a credible or truthful witness. The Board noted that petitioner's statements about his relationship to Ballog and knowledge of Ballog's criminal background were contradicted by the record. The Board found that petitioner's "willingness to knowingly participate with others and to protect those co-conspirators was not in keeping with the activity of a police officer and his oath of office." The Board also found that "but for the fact that [petitioner] was a Police Officer of high rank," he would not have been in a position to participate in the scheme to defraud. The Board then denied petitioner's claim for pension benefits.

On August 18, 1998, petitioner brought his petition for administrative review. The circuit court found that the issue was whether petitioner was engaged in "activity relating to or arising out or in connection with his services as a policeman." The court summarized the facts in two cases and chose to follow Dvorak v. Retirement Board of the Policemen's Annuity & Benefit Fund, 287 Ill. App. 3d 399, 405-06 (1997), where the board denied pension benefits to a retired policeman, rather than Cullen v. Retirement Board of the Policemen's Annuity & Benefit Fund, 271 Ill. App. 3d 1105, 1108-09 (1995). The circuit court confirmed the Board's decision and this appeal followed.

Petitioner contends that the Board improperly applied section 5-227 of the Code to the facts of this case. Although both parties maintain that the facts are not in dispute, petitioner asserts that the Board misstated certain facts in its order. The Board's factual findings may be reversed only if they are contrary to the manifest weight of the evidence. Abrahamson v. Illinois Department of Professional Regulation, 153 Ill. 2d 76, 88 (1992). A de novo standard of review is applied to the Board's construction of the statute and determination of the law. Harrisburg-Raleigh Airport Authority v. Department of Revenue, 126 Ill. 2d 326, 331 (1989). In this analysis, we need not defer to the circuit court's determination (Zaruba v. Village of Oak Park, 296 Ill. App. 3d 614, 622 (1998)), although substantial weight is given to an agency's interpretation of a statute it administers. Stillo v. State Retirement Systems, 305 Ill. App. 3d 1003, 1006 (1999). Pension laws should be liberally construed in favor of those to be benefitted. Kozak v. Retirement Board of the Firemen's Annuity & Benefit Fund, 95 Ill. 2d 211, 217 (1983).

We agree with the Board that, in the context of this case, the application of section 5-227 of the Code presents a mixed question of law and fact. See City of Belvidere v. Illinois State Labor Relations Board, 181 Ill. 2d 191, 205 (1998). The Board applies a two-part test when deciding the issue of whether a police officer's pension benefits should be forfeited under the first paragraph of section 5-227. The Board first determines the factual circumstances giving rise to the police officer's felony conviction, which, as this case demonstrates, may be in conflict. The Board then interprets and applies the statutory language "any felony relating to or arising out of or in connection with his service as a policeman" to the facts of the case. Therefore, the proper standard of review is the clearly erroneous standard, which provides some deference to the Board's experience and expertise. City of Belvidere, 181 Ill. 2d at 205.

We believe that the Board's factual findings were not clearly erroneous. The findings of fact to which petitioner primarily objects are that: (1) petitioner participated in a scheme to defraud over a long period of time; (2) petitioner obstructed justice with regard to "his conduct with Ballog and the rape case"; and (3) petitioner used his position as a Chicago police officer to further the insurance fraud scheme. There is no dispute over the fact that the insurance scheme in which petitioner was involved was completed within a period of months. In addition, Ballog testified at petitioner's sentencing hearing that he had a close relationship with petitioner since the early 1980s and that petitioner helped him resolve an outstanding warrant. Based on this record, the Board had sufficient evidence to conclude that Ballog approached petitioner to participate in the insurance fraud scheme because of their close, long-term relationship and that the scheme was completed within a period of months. Second, regarding the obstruction of justice issue, the Board basically adopted the factual findings of the federal district court, which, after a contested hearing, determined that petitioner obstructed justice. The testimony at petitioner's hearing, therefore, provides ample evidence to support this conclusion. However, applying section 5-227, we may only consider petitioner's felony conviction for mail fraud in determining whether he has forfeited his pension benefits. Petitioner had not been charged with or convicted of any felony related to obstructing justice regarding the sexual assault case, and thus the language of section 5-227 precludes us from considering this conduct in determining whether petitioner has forfeited his pension benefits. Therefore, petitioner's conduct in obstructing justice in the sexual assault case is irrelevant to our analysis of whether petitioner has forfeited his benefits under section 5-227.

The third factual finding that petitioner objects to is the Board's finding that petitioner used his position as a Chicago police officer to further the insurance fraud. In the context of that finding petitioner disagrees with the Board's legal interpretation of section 5-227 which raises the main issue in this appeal: whether the Board's decision that petitioner's mail fraud conviction related to, arose out of, ...


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