FELASCO CASE Freezing of pension account is tabled

Officials are unsure about putting Felasco's paycheck in an escrow account.
NEW CASTLE, Pa. -- Lawrence County officials have decided against freezing Gary Felasco's access to his retirement account for now.
County retirement board members called an emergency meeting Friday to discuss freezing the account to keep Felasco, the county's elected treasurer, from withdrawing any of the funds.
On Wednesday, Felasco, 38, was charged with theft by failure to make required disposition of funds received, misapplication of entrusted property of government or financial institutions, embezzlement and two counts of conflict of interest.
He is accused of taking more than $44,000 from his office and using it for personal expenses, including paying for a van, and paying his own property taxes.
County officials initially said they wanted to freeze Felasco's access to his retirement account because the money could be used to pay restitution to the county if he is convicted.
County Solicitor John Hodge said if Felasco moved the funds to a private individual retirement account, the county would not have access to the money.
But a call to the actuarial firm that handles the county retirement fund, the Hay Group, allayed those fears.
County Controller Maryann Reiter said a representative from the Hay Group said Felasco could withdraw money only if he resigns from his post. Reiter noted that it would take two months to issue the check after Felasco requests it.
Retirement board members decided to forgo any action on freezing Felasco's retirement funds unless he does resign and request them.
"We will do whatever is in our power to make sure the county is made whole at the end of this process, but we don't want to do anything rash," said county Commissioner Steve Craig, a member of the retirement board. "I'd rather we do this when the time is more appropriate."
Hodge noted that the county also has the option to file a civil lawsuit against the bonding companies that have issued bonds on the county treasurer if Felasco is convicted and the county can't collect restitution from him directly. Hodge said there are two bonds totaling $208,000.
Rethinking escrow account
County commissioners also moved Thursday to put Felasco's wages in an escrow account until the outcome of the criminal charges.
But it is unclear whether the money will be withheld. Hodge said he was meeting with the controller next week to discuss the matter. Hodge noted that there could be problems because Felasco has court-ordered child support payments taken directly from his pay.
Reiter said she doesn't think the county legally can put Felasco's pay in an escrow account, and she intends to continue issuing him a paycheck.
Felasco's attorney, Ed Leymarie, said the county has no legal right to withhold the treasurer's paycheck.
Felasco, who is also a member of the retirement board, did not attend Friday's meeting, but sent a memo instructing members that they had no right to freeze his access to his account.

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