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Appeals Court Upholds Restitution Order Against Former Toledo Schools Official

But Reverses Trial Court Ruling That Theft-In-Office Law Allows Bonding Companies To Collect Through Withholding from  Defendant’s State Pension

The Sixth District Court of Appeals affirmed a ruling by the Lucas County Court of Common Pleas ordering full restitution for thefts from the school district totaling $658,428.

The Sixth District Court of Appeals affirmed a ruling by the Lucas County Court of Common Pleas ordering full restitution for thefts from the school district totaling $658,428.

The Sixth District Court of Appeals affirmed a ruling by the Lucas County Court of Common Pleas ordering full restitution for thefts from the school district totaling $658,428.

The Sixth District Court of Appeals affirmed a ruling by the Lucas County Court of Common Pleas ordering full restitution for thefts from the school district totaling $658,428.

In a decision announced September 14, the Sixth District Court of Appeals affirmed a ruling by the Lucas County Court of Common Pleas ordering Daniel Burns, a former business manager of the Toledo City School District, to make full restitution for thefts from the school district totaling $658,428.

However, the court of appeals reversed a portion of the trial court’s order that authorized  two bonding companies to recover the portions of the restitution award payable to them through withholding from Burns’ retirement account with the State Teachers’ Retirement System (STRS).  The Sixth District based the latter ruling on a finding that R.C. 2921.41, a state law that allows losses from a public official’s thefts in office to be recovered through withholding from his pension, makes that remedy available to political subdivisions, but not to  insurers or bonding agents.

The court’s 3-0 decision was authored by Judge Stephen A. Yarbrough and joined by Judges Arlene Singer and Thomas J. Osowik.

Pursuant to a plea agreement, Burns entered “Alford” guilty pleas, in which he admitted legal guilt but did not admit to the conduct underlying the charges, to single counts of engaging in a pattern of corrupt activity, theft in office, and tampering with records.  In exchange, the state dropped 22 other felony counts and agreed to recommend that any prison term Burns received be served concurrently with a six-year prison sentence he received as a result of similar conduct in Cuyahoga County.   Burns also agreed to make restitution for all of the counts in his indictment, including those that were dismissed, in an amount to be determined by the Lucas County probation department. 

At his plea hearing, after a lengthy dialogue with the judge in which Burns confirmed the amount of restitution he was agreeing to pay and reaffirmed his guilty pleas, the court accepted his pleas, sentenced him to 10 years in prison concurrent with his Cuyahoga County sentence, and ordered him to pay restitution of $658,428. 

After his sentence was pronounced, the school district filed a motion to recover the full amount of the restitution order through withholding from funds on deposit in Burns’ STRS pension account.  Burns opposed the motion.  After a hearing, the trial court issued a judgment ordering that the full $658,428 restitution amount be withheld from Burns’ pension.  Burns appealed that ruling to the Sixth District.

In its decision, the court of appeals agreed with Burns’ argument that the theft-in-office statute only required restitution of the actual amount of  financial loss suffered by the school district, which was the $52,429 difference between the total amount of the thefts and  the $605,999 the district had recovered through claims against two bonding companies.  

While acknowledging that the theft-in-office statute does not require restitution to insurance or bonding companies, the court of appeals found that a provision of the state law governing criminal appeals, R.C. 2953.08(D)(1), barred Burns from challenging the amount of restitution included in his sentence because that sentence was authorized by law, and Burns and the state had jointly recommended restitution of the full amount of district’s insured and uninsured losses as part of their plea agreement.

With regard to the trial court’s subsequent order that the full $648,429 restitution amount be withheld from Burns’ STRS pension, the Sixth District agreed with Burns’ argument that the pertinent provision of the theft-in-office statute, R.C. 2921.41(C)(2)(b)(ii), authorizes pension withholding only for amounts that an office holder is required to repay to a political subdivision, but makes no provision for withholding from a pension amounts payable to a non-victim third party such as an insurance of bonding company. 

Accordingly, the court of appeals concluded that while the school district could recover its actual losses of $52,429 through withholding from Burns’ STRS pension, the trial court erred in finding that the bonding companies had a right to enforce their portions of the restitution order through similar withholding under the theft-in-office statute. The case was remanded to the trial court for appropriate adjustments to its sentencing order.

State v. Burns, 2012-Ohio-4191
Opinion: http://www.supremecourt.ohio.gov/rod/docs/pdf/3/2012/2012-ohio-4191.pdf
Criminal Appeal From: Lucas County Court of Common Pleas
Judgment Appealed From Is: Partially Affirmed and Partially Reversed, Remanded
Date of Judgment Entry on Appeal: September 14, 2012

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