Judge: Feds can seize pension in jobs scandal
IOWA CITY (AP) — The federal government can seize the retirement benefits of a former director of an Iowa job-training agency while she serves prison time on charges that she orchestrated a scheme to overpay herself and others by millions of dollars, a judge ruled Monday.
Ramona Cunningham’s monthly pension of $2,700 from the Iowa Public Employees’ Retirement System will go toward the $1.65 million she and another co-defendant have been ordered to pay in restitution, Judge Robert Pratt ruled. But after she is released from prison in 2015, only 25 percent of her pension can be seized for restitution under federal law, and Cunningham is entitled to the rest, Pratt ruled.
Cunningham, the former chief executive of the Central Iowa Employment and Training Consortium, is serving a seven-year prison sentence handed down in 2008 for her role in a scheme in which up to $2.5 million in public funds were misspent on excessive salaries and bonuses for agency administrators between 2003 and 2006.
Cunningham, 57, pleaded guilty to charges of fraud, misusing federal funds and obstructing investigators looking into the use of grant money intended for job training programs run by the regional agency. She acknowledged personally receiving $473,000 in bonuses and supplemental compensation over a three-year period, during which her annual salary ballooned to $363,000.
Cunningham is incarcerated at a prison in Fort Worth, Texas, that specializes in medical and mental health services for female offenders and is scheduled to be released Jan. 18, 2015, according to the Federal Bureau of Prisons.
Four others were convicted during the scandal, including former treasurer Karen Tesdell, who was sentenced to two years in prison for her role in allowing the misspending and receiving excessive pay. Pratt in 2009 ordered Cunningham and Tesdell to jointly pay back $1.8 million in restitution, which included $1.3 million the state had to repay the federal government for the misspending and additional losses suffered by Polk County and a human services agency.
So far, Cunningham has only paid $1,111 toward the restitution even while testimony earlier this year revealed she has received more than $153,000 in pension payments while behind bars. Her pension had accrued over her 22-year career as a state employee. Monthly payments started flowing shortly after her conviction in 2008, after the U.S. Social Security Administration ruled that Cunningham was disabled and eligible for retirement benefits early. She will continue to receive them for the rest of her life.
