Labor and Employment

Employee Benefits • Pension and Other Retirement Benefits

DiLacqua v. City of Philadelphia, PICS Case No. 14-0023 (Pa. Commw. Jan. 7, 2014) Leadbetter, J. (16 pages).

City of Philadelphia appeals from the Court of Common Pleas of Philadelphia County reversing the Board of Pensions and Retirement’s decision to forfeit the pension of appellee Rosemary DiLacqua. Affirmed.

DiLacqua was employed as a full-time police officer with the city of Philadelphia from 1984 to 2009. Concurrently, DiLacqua served as a volunteer board president for the Philadelphia Academy Charter School where she oversaw the charter school’s operations, including salary increases. While serving, she entered into three separate financial agreement with the school’s founder; the financial arrangements were not disclosed to the school board and DiLacqua mailed a letter to the school’s outside accounting firm stating no material transactions occurred.

A federal investigation ensured regarding the loans, and DiLacqua was charged with “honest services” mail fraud and failing to report the loans and payments on her annual state financial interest form. DiLacqua pled guilty and was sentenced to one year and one day of incarceration, a $10,000 fine and $100 special assessment. DiLacqua resigned from the police force June 2009 and began receiving her pension benefits. In March 2010, the pension board received notice of the guilty plea and voted to disqualify DiLacqua from receiving further pension benefits; the pension board denied her appeal.

DiLacqua appealed to the court of common pleas which reversed the pension board’s decision holding that a conviction for honest services mail fraud based solely on a failure to disclose a conflict of interest was unconstitutional. The court held the pension board’s consideration of the fraud in rejecting pension benefits which was now considered unconstitutional, and thereby rendering her conviction “nonexistent,” violated DiLacqua’s constitutional rights. The pension board appealed.

The court affirmed the lower court’s decision ruling the cessation of DiLacqua’s pension was in error. The court indicated that DiLacqua’s guilty plea bound her to the Forfeiture Act which provided that pension benefits are automatically forfeited upon a plea of guilty, as well as stating that the now unconstitutional honest services mail fraud did not render her conviction void. However, the court upheld the common plea’s decision to overturn the pension board, reasoning that DiLacqua’s guilty plea was related to duties as an unpaid volunteer in private and not with her employment as a police officer was not grounds to terminate her pension benefits.