Indiana Attorney General Curtis Hill’s office filed a civil lawsuit on Tuesday seeking more than $3 million in damages from two former School Town of Munster administrators.
Last June, a State Board of Accounts report cited former Munster Superintendent William Pfister and former Assistant Superintendent Richard Sopko for allegedly receiving more than $850,000 in overpayments for a 15-year period.
According to court filings in Lake Superior Court, Hill’s office cited that report stating those funds were misappropriated, illegally retained or obtained by fraud.
The state is seeking more than $1.8 million in damages from Pfister, which includes the estimated $463,922 loss to the School Town of Munster, $10,053 in state audit costs and an additional $1.391 million in damages equaling three times the original amount, which is allowed by state law.
The state also is seeking $1.5 million from Sopko, which includes a $377,475 loss to Munster, $10,053 in state audit costs and a $1.132 million penalty equaling three times the original loss.
The state is also seeking court costs, attorney fees and other expenses.
Pfister and Sopko’s attorney, Greg Bouwer, was unavailable for comment.
Traveler’s Insurance, Western Surety Insurance Company, Westfield Companies and Ohio Farmers Insurance Company are also named in the lawsuit.
Hill’s office is seeking to recover an additional $408,000 from those companies under insurance policies issued to the district.
Last June, a special investigation report released by the State Board of Accounts details overpayments of $359,728 and $311,198 to the annuities of retired Superintendent William Pfister and former Assistant Superintendent Richard Sopko, respectively. The report covered the period between July 1, 1999, and June 30, 2014, and focused on salary contracts, payroll records and annuity payments.
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According to the report, compiled by State Board of Accounts Field Officers Mary Jo Small and Karen Tetrault, Pfister’s contract in June 2001 included a clause for an annuity starter and said the school corporation would pay his annual contribution to the Indiana State Teachers Retirement Fund plus an additional 1 percent. The contract was changed, however, in June 2002 to read the school corporation would pay Pfister’s annual contribution to ISTRF plus an additional 2 percent to an annuity of his choice.
A year later, his contract was once again changed and increased his annuity to 4 percent, but instead of continuing payment to the ISTRF, payment was made directly to Pfister, the report said. The contract language remained the same until he retired in 2012.
Sopko, meanwhile, served as the assistant superintendent/Treasurer from July 1, 1998, to June 30, 2012, and as superintendent from July 1, 2012, to June 30, 2014. His contract followed the same changes as Pfister’s from 2001 to 2003, except his annuity increase went to 3 percent instead of 4 percent, and the clause was removed altogether in 2012, when he became superintendent, the report said.
The State Board of Accounts report also asked Pfister to repay $27,222.50 for the overpayment of cash bonuses he received in lieu of severance pay for the period of July 2000 to his retirement; and Sopko to repay $20,365.77 for the same for the period between July 2000 and January 2015.
Additionally, both men were asked to repay money they received as a fringe benefit referred to as an “investment allotment,” wherein the school corporation paid 12 percent of Pfister’s salary and 5 percent of Sopko’s salary toward investments of their choice starting in October 2000.
In his responses filed for both as part of the State Board of Accounts report, however, Bouwer said that both men believe they received payments due to them that were approved by the school board and wondered why the SBA was questioning them years later.
The next court date is set at 9:30 a.m. on Wednesday in the Lake County Circuit Court’s Civil Division with Judge Marissa McDermott presiding.