Multiple Dipping for Dollars: New York Indie Contractors Rip Off System as ‘Employees’

As more and different types of frauds come to light involving public pension systems, CFEs and auditors must be on the lookout for miscast worker/employer relationships and determine if professional service providers actually are independent contractors illegitimately reported as employees.

In February 2008, a New York State Comptroller’s Office audit found that a Long Island attorney was reported as a full-time employee by five different school districts simultaneously. As a result of this “herculean feat,” the attorney was credited – for state pension purposes – with more than 1,270 days of work in each of two years according to a Feb. 15, 2008, article in Newsday, “5 School Districts Claimed Same Full-Time Lawyer.” That’s quite an accomplishment because a year only contains about 260 workdays.