83 A.3d 302
Pa. Commw. Ct.2014Background
- Rosemary DiLacqua, a Philadelphia police officer (1984–2009) and unpaid president of the Philadelphia Academy Charter School board (2000–2008), accepted loans/gifts from the school founder and facilitated lucrative contracts and raises for school executives while failing to disclose those payments to the board and on state financial forms.
- A federal criminal information charged DiLacqua with honest-services mail fraud under 18 U.S.C. §§ 1341, 1346 for concealing financial interests and causing a false letter to be mailed to the school's auditors; she pled guilty to Count IV and was sentenced to prison and a fine.
- After retiring and receiving DROP and pension benefits, the Philadelphia Board of Pensions voted to disqualify her from further pension benefits under the Public Employee Pension Forfeiture Act and the Philadelphia Retirement Code based on her federal conviction.
- The Board held DiLacqua was a “public official” as a charter school trustee, and concluded her conviction was substantially the same as Pennsylvania theft by deception and also met Philadelphia Code disqualifying offenses (bribery/graft/theft/malfeasance).
- The Court of Common Pleas reversed, reasoning Skilling v. United States voided honest-services convictions based solely on failure to disclose conflicts of interest; the Board appealed.
- The Commonwealth Court affirmed the pensions-board decision in part and reversed the common-pleas ruling that the conviction was "void," holding the conviction remains effective for forfeiture analysis but that pre‑Skilling honest‑services convictions based on non‑disclosure are not substantially similar to Pennsylvania theft by deception; it also held the Philadelphia Retirement Code provisions did not apply because the crime was unrelated to her paid City employment.
Issues
| Issue | Plaintiff's Argument (DiLacqua) | Defendant's Argument (Pension Board) | Held |
|---|---|---|---|
| Does Skilling render DiLacqua's conviction void so it cannot be a predicate for pension forfeiture? | Skilling invalidated her conviction (based on non‑disclosure), so it is void/nonexistent. | The conviction remains valid unless vacated by federal court; forfeiture attaches on guilty plea. | Rejected plaintiff: conviction is not void ab initio; it remains extant absent federal vacatur and may be a forfeiture predicate. |
| Is pre‑Skilling honest‑services mail fraud (based on failure to disclose) substantially the same as Pennsylvania theft by deception for Forfeiture Act purposes? | No — non‑disclosure honest‑services differs from theft by deception. | Yes — elements overlap; mail fraud can encompass deceptive schemes to obtain property or deprive honest services. | Held for DiLacqua: pre‑Skilling honest‑services (failure to disclose) is not substantially the same as theft by deception. |
| Can a volunteer charter‑school trustee be a "public official" under the Forfeiture Act, making her pension forfeitable? | Argues conviction unrelated to City employment so pension shouldn't be forfeited. | Trustee of a charter school is a public official; Forfeiture Act applies regardless of whether pension accrued from unrelated City employment. | Held for Pension Board on this point: charter trustees are "public officials" and conviction can trigger forfeiture even if unrelated to the job that generated the pension. |
| Do Philadelphia Retirement Code disqualification provisions (.2–.5) apply when the conviction was tied to volunteer outside activity, not paid City employment? | No — Code applies only to crimes connected to City employment; her charter‑school role was unpaid and not City employment. | Board argued the conduct constituted bribery/graft/theft/malfeasance under the Code. | Held for DiLacqua: Code does not apply because she was not a City "employee" or elected official in connection with the charged conduct. |
Key Cases Cited
- Skilling v. United States, 561 U.S. 358 (2010) (limited honest‑services statute to bribery and kickbacks)
- McNally v. United States, 483 U.S. 350 (1987) (predecessor holding that mail/wire fraud statutes protected property rights, prompting § 1346)
- Panarella v. United States, 277 F.3d 678 (3d Cir. 2002) (pre‑Skilling Third Circuit discussion of nondisclosure theory of honest‑services fraud)
- Antico v. United States, 275 F.3d 245 (3d Cir. 2001) (Third Circuit on scheme to deprive public of honest services via concealed financial interests)
- Carbo v. United States, 572 F.3d 112 (3d Cir. 2009) (elements of mail fraud and requirement of knowing participation in scheme)
- Pub. School Employes’ Ret. Bd. v. Matthews, 806 A.2d 971 (Pa.Cmwlth. 2002) (Forfeiture Act does not require the pension‑generating employment to be connected to the predicate crime)