Human Resources Admin



Human Resources Admin. v. Finley

OATH Index No. 947/05 (Oct. 12, 2005), aff'd, NYC Civ. Serv. Comm'n Item No. CD06-53-SA (Apr. 24, 2006)

Eligibility specialist II convicted of insurance fraud was guilty of off-duty misconduct because of nexus between her position and the proven criminal conduct, and because the fraud evidenced “moral turpitude.” Respondent was also guilty of failing to report her arrest and conviction. ALJ recommended termination, despite respondent’s asserted mitigation based on family difficulties that she said lead to her misconduct.

______________________________________________________

NEW YORK CITY OFFICE OF

ADMINISTRATIVE TRIALS AND HEARINGS

In the Matter of

HUMAN RESOURCES ADMINISTRATION

Petitioner

- against -

CHARLEAN FINLEY

Respondent

______________________________________________________

REPORT AND RECOMMENDATION

TYNIA D. RICHARD, Administrative Law Judge

This employee disciplinary proceeding was referred by petitioner Human Resources Administration ("HRA") pursuant to section 75 of the Civil Service Law. Respondent Charlean Finley is employed by petitioner as an eligibility specialist II. She is charged with off-duty misconduct related to her conviction for insurance fraud and with failing to report her arrest and conviction. Respondent sought to mitigate any penalty by presenting evidence of pressing difficulties.

The hearing on the charges was conducted before me on March 7, 2005. Petitioner called supervisor Frances Rivers as its witness. Respondent testified on her own behalf and called social worker Michael Morgan as a witness.

Based upon the record of the proceeding, I find that petitioner established the charges and recommend a penalty of termination.

ANALYSIS

Respondent is charged with violating Departmental rules prohibiting off-duty misconduct that has a nexus to her job position or that constitutes moral turpitude. She also is charged with failing to notify petitioner in writing of the circumstances surrounding her arrest and conviction for insurance fraud. Last, she is charged with engaging in conduct prejudicial to good order and discipline and conduct detrimental to the agency.

Charges I and II - Commission of criminal act of insurance fraud

Charge I alleges that respondent, who is an eligibility specialist, engaged in off-duty mis-conduct in violation of section II (G) of Executive Order 651 by “knowingly and intentionally committ[ing] a fraudulent insurance act” and pleading guilty to the crime of insurance fraud.[1]

On February 23, 2004, respondent pled guilty to the crime of insurance fraud in the 4th degree, a class E felony under section 176.15 of the Penal Law.[2] In her plea, respondent admitted that she “knowingly and intentionally committed a fraudulent insurance act” by which she “did wrongfully take, obtain or withhold or attempted to wrongfully obtain, [property] with the value in excess of a thousand dollars” (Pet. Ex. 5, p. 3). She was sentenced to a three-year conditional discharge (Pet. Exs. 4 & 7). Respondent’s fraudulent acts occurred on March 6, 2001 (Pet. Ex. 5).

Petitioner’s evidence of this prior conviction forms the basis for invoking the doctrine of collateral estoppel, which bars relitigation of issues already established by a prior court judgment. See S.T. Grand, Inc. v. City of New York, 32 N.Y.2d 300, 344 N.Y.S.2d 938 (1973) (vendor’s criminal conviction for bribery was conclusive proof that vendor bribed commissioner and, consequently, was conclusive proof of the illegality of the emergency cleaning contract as a matter of law). Respondent was convicted in a prior criminal proceeding in which she had a full and fair opportunity to litigate issues identical to those raised in this proceeding. Thus, the factual allegations in Charge I are established by operation of the collateral estoppel effect accorded to the prior court judgment.

The next question is whether respondent’s conduct constitutes disciplinable off-duty misconduct. Petitioner alleges that respondent’s acts, as established by her conviction, constitute off-duty misconduct according to two Administration mandates, Executive Order No. 651, Section II (G) and Mayoral Executive Order No. 16.

Section II (G) of Executive Order No. 651 states the following:

Off-Duty Conduct. Offenses committed off Agency premises may result in disciplinary action if they reflect unfavorably on the fitness of the employee or if they bring or may bring discredit to the Agency.

Executive Order No. 651 (dated Dec. 17, 1998).

Employers are entitled, under certain circumstances, to discipline their employees for misconduct that occurs off-duty. See Villanueva v. Simpson, 69 N.Y.2d 1034, 517 N.Y.S.3d 916 (1987) (subway conductor dismissed for off-duty assault). An employee may be the subject of discipline under the Civil Service Law where the employer demonstrates that there is a sufficient nexus between the off-duty conduct and respondent's civil service position. See Cromwell v. Bates, 105 A.D.2d 699, 481 N.Y.S.2d 137 (2d Dep't 1984); Zazycki v. City of Albany, 94 A.D.2d 925, 463 N.Y.S.2d 614 (3d Dep't 1983); Dep't of Environmental Protection v. Tosado, OATH Index No. 311/83 (Sept. 2, 1983). In this case, petitioner contends that the fraudulent conduct for which respondent was convicted has a nexus to the responsibilities vested in her as an eligibility specialist and that her conduct demonstrates a fundamental lack of integrity that is incompatible with the position. According to respondent’s own testimony, as an eligibility specialist, she receives personal confidential information from clients that includes their social security number, wage and income information, alien status, bill payments, and social security benefits (Tr. 40). Her position requires her to review these personal and financial records to determine clients’ eligibility for public assistance benefits (Tr. 11-13; Pet. Ex. 8).

In her testimony, respondent described being in serious financial straits when she was approached by an acquaintance who presented her with an opportunity to “get some money” (Tr. 26-27). She was given a police report that falsely stated that she had been in an accident, and she was told to visit a doctor’s office. In exchange for her actions, she said she was assured financial assistance in paying her rent. She said she went only a couple of times. Respondent provided no more detail. I find that respondent’s participation in this scheme of deception has a sufficient nexus to her job duties, which include receiving and handling the personal financial information of HRA clients.

Indeed, this nexus has been established in other cases involving eligibility specialists convicted of acts involving fraud or deception. See Human Resources Admin. v. Turner, OATH Index No. 2212/01, at 6 (Nov. 21, 2001), aff’d, NYC Civ. Serv. Comm’n Item No. CD02-48-SA (June 14, 2002) (eligibility specialist’s conviction for possessing a forged instrument intended to defraud an insurance company provided nexus); Human Resources Admin. v. Onatoye, OATH Index No. 1326/01, at 4 (May 14, 2001) (case worker’s conviction for bank fraud provided nexus); Human Resources Admin. v. Ayeni, OATH Index No. 1060/94, at 5 (July 18, 1994) (eligibility specialist’s conviction of credit card fraud provided nexus).

Charge II alleges that, by her conduct, respondent also violated Mayoral Executive Order No. 16 (July 26, 1978 - as amended) (“MEO 16"). Section 5(c) of MEO 16 provides that:

Officers or employees of the City convicted of a crime . . . involving moral turpitude . . . shall be removed from such office or employment, absent compelling mitigating circumstances . . . . Proof of said conviction, as a basis for removal or other disciplinary action, must be established in accordance with applicable law.

An employer may also discipline an employee whose off-duty conduct demonstrates moral turpitude. See Furst v. New York City Transit Auth., 631 F. Supp. 1331 (E.D.N.Y. 1986); Arancio v. Dep’t of Sanitation, N.Y.C. Civ. Serv. Comm’n Item No. CD 87-33 (Mar. 4, 1987). Engaging in fraudulent conduct of the kind that respondent has admitted to, has been held to constitute an act of moral turpitude. See Transit Auth. v. Levy, OATH Index No. 1671/99 (June 17, 1999), aff'd, Sup. Ct. Kings Co. Index No. 31577/99 (May 23, 2000) (fraudulent use of a credit card was an act of moral turpitude); Turner, OATH 2212/01 (possession of a forged instrument intended to defraud an insurance company was an act of moral turpitude); Ayeni, OATH 1060/94 (conviction of credit card fraud constituted moral turpitude). I find that engaging in this scheme of deception in which respondent knowingly filed false information in order to collect money to which she was not entitled also constituted an act of moral turpitude that warrants discipline. See also Admin. for Children's Services v. Pelaez a/k/a Palaez, OATH Index No. 876/04 (May 19, 2004) (respondent's off-duty acts of knowingly negotiating and receiving proceeds of stolen checks for $125,000.00 and $17,600.00, were acts of deceit and misrepresentation that demonstrated moral turpitude sufficient to warrant disciplinary action).

Accordingly, respondent’s conduct, as alleged in Specifications II and III of Charge I and in Charge II, may properly be sanctioned as misconduct under the Civil Service Law, inasmuch as petitioner has established by a preponderance of the evidence that the conduct had a nexus to respondent’s position as an eligibility specialist and constituted moral turpitude.

Charges III and IV - Failure to notify of arrest and conviction

Respondent is charged with failing to notify, in writing, HRA and the Inspector General of the circumstances surrounding her arrest and conviction. Executive Order 651, Section III (22) states as follows:

Employees shall immediately notify, in writing, both the office of the HRA Administrator/Commissioner and the Inspector General of the circumstances surrounding any arrest, indictment or conviction of a crime.

Respondent admitted that she did not advise HRA or the inspector general of her arrest or conviction for insurance fraud (Tr. 39). She said that she was told that the reporting obligation was optional because she had already explained what happened (Tr. 40-41). This response I found to be too vague to be convincing. Thus, the explanation provided an insufficient defense to the charge. Accordingly, I find that petitioner sustained Charge III.[3]

Charges V and VI - Other

Petitioner asserted two additional charges, citing violation of sections III (1) and III (36) of Executive Order 651, based upon the same conduct proven here. Section III (1) prohibits conduct “prejudicial to good order and discipline” and section III (36) prohibits conduct “detrimental to the Agency or which would undermine the effectiveness of the employee in the performance of his/her duties.” As with Charge IV, petitioner cites additional rules that were violated by the same conduct. Though respondent’s conduct was prejudicial to good order and discipline and detrimental to the agency, these charges cannot form the basis for any additional penalty finding.

Accordingly, Charges V and VI should be dismissed.

FINDINGS AND CONCLUSIONS

1. Petitioner established by a preponderance of the credible evidence that respondent “knowingly and intentionally committed a fraudulent insurance act” by which she “did wrongfully take, obtain or withhold or attempted to wrongfully obtain” property with a value in excess of $1,000.00, and that she pled guilty to the crime of insurance fraud.

2. There is a sufficient nexus between respondent’s off-duty acts and her position as an eligibility specialist to warrant a finding that she committed misconduct.

3. Respondent’s acts demonstrated moral turpitude.

4. Respondent failed to notify HRA and the Inspector General, in writing, of the circumstances surrounding her arrest and conviction.

THEREFORE:

I find that petitioner has properly proved Specifications II and III of Charge I, and Charges II and III.

RECOMMENDATION

Upon making the above findings and conclusions, I obtained and reviewed an abstract of respondent's personnel record provided to me by HRA. Ms. Finley was appointed to her position as an eligibility specialist II on December 12, 1994. In her only prior disciplinary matter, she forfeited four days of annual leave, in 2000, for excessive lateness. Her evaluations for 1995, 1996, 1997, and 1998 rated her performance “good”; her 1999 evaluation gave her a “marginal” rating.

Here, respondent has been found guilty of misconduct related to her conviction for insurance fraud. Petitioner seeks respondent's termination and contends that it is the only appropriate penalty.

Respondent seeks to mitigate the penalty, and she testified about her family circumstance to establish the basis for that mitigation. Respondent is the sole support of her family; she is the mother of two children, ages 11 and 12. The children were removed from her custody in 1998 after it was discovered that her male companion had sexually assaulted them (Tr. 19, 24). The children were returned to her in December 2002 and September 2003.[4] During the interim, the children were placed by the Administration for Children’s Services (“ACS”) with her son’s grandparents who lived near Albany. During this time, ACS required respondent to comply with a host of requirements which, she said, caused her “great hardship.” The list of obligations included individual and family therapy, parenting classes, and monitored visits. Respondent said the monitored visits required her, for a year, to devote time and expense to travel upstate to see her children on alternate weekends. The weekly bus trip, which cost $75, eventually led her to buy a car. Alternate weekend visits were held locally at ACS’s offices in Manhattan. Respondent sometimes had to take time off from work, which reduced her leave balances. The cost eventually led her to fall behind in paying her rent and other bills. She got a second job, but her ACS obligations made maintaining that job difficult. She applied for rent assistance but was denied several times.

After her children were returned to her in 2002 and 2003, one of them attempted suicide and ACS obtained an order for court-mandated counseling (Tr. 29). Michael Morgan, a social worker who testified on respondent’s behalf, said that her children are still in counseling mandated by ACS and are still monitored by the agency (Tr. 19). Respondent pays for the counseling with the health benefits provided by her job. Mr. Morgan said that respondent’s failure to provide the children with counseling would be a basis for the agency to remove them from her custody on the grounds of neglect.

Respondent also testified about various health problems. She said that she takes a daily medication for depression, though she did not recall the name of it (Tr. 28). Respondent pays for the medication with the health benefits received from her job. She said that she began suffering from depression in January 1998, when her children were taken from her (Tr. 34). Respondent submitted a doctor’s note that she said she submitted to the agency after missing work in January 2005. Written by Shara Sand, Psy.D., the note indicates that respondent was experiencing memory problems in July 1999 due to depression and explains that a recent missed court appearance was not due to a lack of interest or to neglect (Resp. Ex. B). She also submitted a note from Montefiore Medical Center, which explained that she was under medical care for an urgent medical condition from January 18, 2005, and was scheduled for a procedure on March 2, 2005 (Resp. Ex. C). She explained that this condition involved a miscarriage that required her to have surgery (Tr. 28).

Respondent contends that she was led into the insurance fraud scheme by her dire financial situation and requests a penalty short of termination, such as demotion to a position that does not require contact with clients or their personal information.[5] She contends that if she loses her medical benefits, she will be unable to provide the court-mandated counseling to her children and will risk losing them again.

Petitioner’s advocate argued strenuously that, under MEO 16, termination is the only remedy for misconduct that constitutes moral turpitude, thus demotion is not appropriate. The advocate emphasized that respondent’s intentional and volitional acts are not negated by her family problems, and that her need for health benefits does not justify her retention in the City’s employ. After all, everyone needs medical benefits.

Respondent provided an insufficient case for mitigation. Her evidence of having suffered from depression during the relevant period was marginal. Her explanation that she was led to this scheme by a desperation caused by a financial condition imposed on her by ACS suggests that she does not take full responsibility for having chosen to engage in illegal conduct, rather than enlist a legal alternative. This explanation also demonstrated a preoccupation with laying blame on ACS and was tinged with resentment, rather than concern for her children. I found her decision to steal in the context of these circumstances an insufficient basis for leniency. Moreover, since the mandated counseling and other monitoring instituted by ACS is ongoing, the agency will continue to exercise some influence over respondent’s expenses, and respondent can provide no real assurance that she will not find herself in a similar predicament in the future. I therefore agree with petitioner that a demotion is an inadequate penalty in this case. Indeed, this tribunal has consistently found this misconduct of the type that warrants termination. See Human Resources Admin. v. Risper, OATH Index Nos. 1952/04 & 1954/04 (Nov. 23, 2004) (respondents terminated for submitting applications for relief benefits from 9/11 Fund that falsely claimed they lost pay and accepting benefit checks); Admin. for Children's Services v. Pelaez a/k/a Palaez, OATH Index No. 876/04 (May 19, 2004) (respondent terminated for knowingly negotiating and receiving proceeds of stolen checks for $125,000.00 and $17,600.00; ALJ recommended termination of computer associate because of his access to confidential agency files); Transit Auth. v. Levy, OATH Index No. 1671/99 (June 17, 1999), aff'd, Sup. Ct. Kings Co. Index No. 31577/99 (May 23, 2000) (respondent terminated for fraudulent use of a credit card).

Though mindful of the disruption that the loss of respondent’s job will cause, particularly given an already precarious financial condition, I find that the misconduct here warrants termination, and I so recommend.

Tynia D. Richard

Administrative Law Judge

October 12, 2005

SUBMITTED TO:

VERNA EGGLESTON

Commissioner

APPEARANCES:

CATHERINE KENDRICK, ESQ.

Attorney for Petitioner

DRUYAN & ASSOCIATES

Attorneys for Respondent

BY: MARTIN DRUYAN, ESQ.

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[1] Specification I of Charge I separately charges respondent with being arrested for insurance fraud and other crimes. Since an arrest constitutes an accusation under the law, it cannot by itself form the basis for sanctionable misconduct. See Dep’t of Transportation v. Jagdharry, OATH Index No. 1702/04, at 14 (Nov. 24, 2004); Dep’t of Sanitation v. King, OATH Index No. 295/04, at 6 (Feb. 2, 2004). Therefore, the specification should be dismissed.

[2] Petitioner’s documentary evidence, which included the Certificate of Disposition and the transcript of her plea allocution before Judge Dorothy Chin-Brandt in New York Supreme Court, Queens County, established respondent's conviction.(see Pet. Exs. 4 & 5).

[3] Charge IV alleged violation of II (E) of Executive Order 651 which, similarly, provides that:

All officers and employees . . . who are the subject of a pending criminal action, . . . shall inform the HRA/DSS Administrator/ Commissioner forthwith, in writing, of the circumstances. This shall include the self-reporting of any arrest to the Office of the Inspector General. Failure to self-report an arrest may result in disciplinary action.

I can find no substantive difference between this charge and the prior Charge III, therefore it cannot form the basis for any additional penalty. Accordingly, this charge should be dismissed.

[4] Respondent engaged in the insurance fraud in March 2001.

[5] Under questioning by respondent’s counsel, Frances Rivers, an HRA supervisor, admitted that there were positions below the eligibility specialist grade that did not allow the employee access to confidential client information (Tr. 15). Taking such a position would constitute a demotion for respondent. Respondent said she would accept a demotion in order to keep her City employment.

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