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Attorney General Cuccinelli seeking approval to use fraud settlement to shore up law enforcement retirement funds
RICHMOND (July 26, 2013) - This week, Attorney General Ken Cuccinelli requested that the U.S. Treasury Department release at least $30 million of his office's $115 million in asset forfeiture funds to help shore up two underfunded retirement funds for state law enforcement officers.
Cuccinelli's office sent the proposal to Eric Hampl, director of the Treasury Executive Office for Asset Forfeiture (TEOAF) in Washington. TEOAF holds the remaining $105 million of Virginia's $115 million of asset forfeiture proceeds earned from a national Medicaid fraud investigation the attorney general's office led against Abbott Laboratories, Inc. Abbott paid the forfeiture as part of a 2012 settlement.
The Virginia Retirement System (VRS) maintains two funds for state law enforcement. The State Police Officers' Retirement System (SPORS) is for retired Virginia state police officers. The Virginia Law Officers' Retirement System (VaLORS) is for capitol police officers, campus police officers, conservation officers, ABC special agents, marine resource officers, state correctional officers, and state juvenile correctional officers. The funds are two of the most underfunded of the VRS accounts. Cuccinelli requested that Treasury approve transfers to both funds.
Once Cuccinelli's office has reviewed and assessed other funding proposals from other Virginia law enforcement agencies, a specific dollar amount will be designated for each fund; likely at least $15 million for each.
"It is critical that these retirement funds be preserved so that they can continue to provide the retirement benefits that were promised to public safety officers who have faithfully served their fellow Virginians," said Cuccinelli.
"If Virginia's retirement systems for state law enforcement officers are not on secure financial footing, it could lead to problems in recruitment, morale, and retention that would ultimately have a profoundly negative impact on public safety. These contributions are one way to help. A similar funding request was made and approved by Treasury in a previous case in Rhode Island, so we feel this request should be approved," the attorney general said.
While SPORS and VaLORS are for state law enforcement officers, local sheriffs and police are employed by their local jurisdictions and are under separate retirement systems. Their jurisdictions may be members of VRS or the jurisdictions may manage their own retirement accounts. Local law enforcement retirement funds are generally not segregated from the rest of their fellow public employees' funds like they are for state law enforcement.
Although the Abbott asset forfeiture money is the attorney general's office's to keep, Cuccinelli has been making plans for more than a year to use proceeds for grants to local police and sheriffs' departments to buy needed equipment such as bulletproof vests, tactical vehicles, and police cars. He has also requested that funds be set aside for continuing training for law enforcement and local prosecutors. Cuccinelli will be submitting more proposals asking Treasury to release additional funds for other law enforcement needs in the coming weeks and months.
The Virginia-led Medicaid fraud investigation led to the second largest Medicaid fraud settlement in U.S. history at the time. In May 2012, Abbott Laboratories Inc. pled guilty and agreed to pay $1.5 billion to the federal government and the states to resolve criminal and civil liability arising from the company's unlawful promotion of the prescription drug Depakote for uses not approved as safe and effective by the Food and Drug Administration.