News  Former lobbyist pleads guilty in pension fraud case

On March 21, 2018, former lobbyist Richard McDonough, 72, pled guilty to one count of presenting a false claim in connection with his pension application to the Massachusetts State Retirement Board.

Mr. McDonough’s pension eligibility was based on his claim that he worked full-time at the Merrimack Special Education Collaborative (“MSEC”), a public entity, from 2003 to 2008.  An investigation by the Massachusetts Inspector General’s Office (“OIG”) revealed evidence that Mr. McDonough did very little work for the public entity. He did not have an office at any of MSEC’s facilities or a telephone number associated with the public entity.  The investigation further revealed that during the years Mr. McDonough was listed on MSEC’s payroll as a full-time employee, he was earning up to $1.1 million a year as the principal of his lobbying firm, McDonough Associates.  Mr. McDonough’s lobbying clients included the Merrimack Education Center (“MEC”), a private non-profit corporation associated with MSEC.

Mr. McDonough submitted his retirement application on February 24, 2009, claiming that he had retired from MSEC on December 31, 2008. The State Retirement Board paid Mr. McDonough a pension of approximately $2,400 a month until the OIG notified the Board about its findings concerning Mr. McDonough. All told, the State Retirement Board paid Mr. McDonough $96,516.39.

In response to the Office’s work, the State Retirement Board voted to rescind Mr. McDonough’s membership in the State Retirement System and to seek repayment of $10,852.55, which is the difference between the contributions in Mr. McDonough’s retirement account when he retired ($86,194.30) and the amount the Board paid him in pension benefits ($96,516.39).  Mr. McDonough has appealed the State Retirement Board’s decision to the Division of Administrative Law Appeals (“DALA”). That appeal is pending.

As previously mentioned, on March 21, 2018, Mr. McDonough pled guilty to one count of presenting a false claim.  A state judge declined to enter a guilty finding and continued the matter without a finding for two years. The judge ordered Mr. McDonough to pay $10,852.55 in restitution to the State Retirement Board.  However, the judge stayed that order pending the resolution of the DALA appeal and McDonough’s payment of federal fines and restitution in connection with a prior criminal conviction for conspiracy and honest services fraud.

For information on the original 2015 indictment, see the Attorney General’s press release.