"Don't rip off a cop" may be the moral of this story. Not if you want to get away with it.
Accountant Ronald Stern stole $1.3 million from a fund that provides aid to the families of injured and slain police officers, according to a lawsuit filed May 12 in Miami-Dade Circuit Court. Top City of Miami officials charge Stern and his CPA firm, who were paid to administrate the account, with racketeering and theft.
The Miami Police Relief and Pension Fund (MPRPF) presently holds a total of about $74 million. It is overseen by a board that is seeking more than four million dollars in damages. "It's disappointing and embarrassing," said Miami Police Chief Bill O'Brien, a MPRPF board member.
Stern, who has not responded in writing to the lawsuit, is also under criminal investigation. He did not return two phone messages left at his Coral Gables office.
The MPRPF board hired Stern in 1990 to run the pension fund, one of two used by city officers. Besides paying injury and death benefits, MPRPF supplements standard police-retirement stipends. Its cash source is a one percent tax on all car-insurance policies written in Miami.
According to the lawsuit, Stern's scam began in 1996 when he convinced the board to deposit money into a larger account called the Florida Fund. The accountant promised a higher return, then provided reports showing the cops' money making money.
At this point, the suit contends, Stern started to skim.
The scheme apparently unraveled in January 1999 when a bank statement arrived at the MPRPF board's Coral Gables office. The paperwork showed part of the pension fund invested in a money-market account at Union Planters Bank. An unidentified worker checked the files; there was no record of such an account. Bank logs showed Stern had withdrawn certificates of deposit, then transferred the total to a money-market account. He withdrew the cash.
Their curiosity piqued, the cops kept digging. Records provided by Stern showed a $250,000 certificate of deposit at Commercial Bank. When a worker at the MPRPF office contacted the bank, he discovered the amount was only $25,000. In October 1998 Stern used money appropriated from the pension fund to purchase two properties, the suit alleges.
"By documenting a detailed web of phony transactions, [Stern and his firm Stern, Mittleberg, and Contreras] were able to conceal their embezzlement until same was ultimately discovered in early 1999," the suit charges. "Stern utilized his position as Fund Administrator/Accountant at the Miami Pension Fund to mislead and conceal ... the true nature of the defendants' unlawful activities."
Confronted by the cops this past January, Stern promised restitution. But he stopped paying when the total reached $800,000. It was at that point that fund overseers tired of his broken promises and sued for the balance, says O'Brien.
The MPRPF board, comprised of the chief, three elected police officers, and an appointed civilian, has concluded Stern did not dip into any other accounts. (The fund's insurance policy will make up any shortfall.)