For Immediate Release - February 23, 2015

Lobbyist Indicted for Allegedly Defrauding Pension System by Falsely Claiming Full Time Public Employee Status

BOSTON – A lobbyist has been indicted for allegedly defrauding the state pension system by falsely representing himself as a full-time state employee of the Merrimack Special Education Collaborative, Attorney General Maura Healey announced today.

Richard W. McDonough, age 69, formerly of Foxborough, was indicted today by a Suffolk County Grand Jury on the charges of Presentation of a False Claim and Procurement Fraud.

“We allege that this defendant falsely represented himself as a full-time state employee in order to collect a state pension, while at the same time running a full-time lobbying business,” said AG Healey. “Actions such as the ones alleged here defraud taxpayers and undermine the integrity of the pension system.”

The indictment stems from an initial investigation by the Inspector General’s Office, which referred the case to the AG’s Office for further investigation in 2011. 

“Mr. McDonough’s actions not only defrauded the state pension system but also were an abuse of funds meant for educating children with special needs,” said Inspector General Glenn A. Cunha. “I am extremely pleased that our long collaboration with the AG’s Office in this case has resulted in an indictment.”

Merrimack Education Center (MEC) is a non-profit organization based in Chelmsford that provides various services to schools. MEC also has a sister organization called the Merrimack Special Education Collaborative (the Collaborative), which is an association of local and regional school districts that provides educational services primarily to special education students. Full-time employees of the Collaborative are entitled to membership in the state pension system.

For many years, McDonough lobbied in Massachusetts through his governmental affairs business, Richard W. McDonough Associates (McDonough Associates). Between 2001 and 2008, MEC was one of McDonough’s clients.

Authorities allege that beginning in 2003, McDonough was put on the payroll as a full-time employee of the Collaborative, serving as its Director of Public Affairs and Governmental Relations. From his appointment in 2003 until 2008, McDonough received a regular pay check from the Collaborative and was enrolled in the state’s pension system. 

However, an investigation revealed that McDonough did very little actual work for the organization. Authorities allege that McDonough never produced any work product, did not have an office at any of the Collaborative’s work locations or an office phone number, and he never regularly reported to people in management.

Despite his alleged full-time employment with the Collaborative, authorities further allege that McDonough continued his work for his business, McDonough Associates, earning up to $1.1 million per year.

In early 2009, McDonough submitted a retirement application to the State Board of Retirement that included the alleged fraudulent representation that he was a full-time employee of the Collaborative between 2003 and 2008. He subsequently began receiving pension payments. Between May 2009 and February 2012, McDonough received a total of $96,515 in pension payments. The State Retirement Board suspended McDonough’s pension in February 2012 when allegations of misconduct surfaced.

These charges are allegations, and defendants are presumed innocent until proven guilty.

The case is being prosecuted by Assistant Attorney General David Clayton, of AG Healey’s Criminal Bureau, Assistant Attorney General Andrew Doherty and Special Assistant Attorney General Eileen O’Brien. It was investigated by Bryan Freitas of the AG’s Financial Investigations Division and Ellen Silberman, senior investigator in the Office of the Inspector General, with assistance from the Massachusetts State Police assigned to the AG’s Office, Victim Advocate Megan Murphy and the AG’s Digital Evidence Lab.