A Milford Superior Court judge ruled Tuesday the town of Oxford cannot attempt to revoke embattled former Tax Collector retirement accounts.
The town had attempted to attach two of Guillet’s three pension plans to its lawsuit against the former town official who served 24 years in her elected post before being accused of stealing more than $670,000 from municipal tax coffers over six years. But Judge Arthur A. Hiller said state and federal law prohibits the town from doing so.
The two accounts that the town attempted to take were 457(b) plans, the public sector equivalent of 401(k) accounts. Those two plans are worth $145,398 and $14,900, respectively, or $160,298 total. That amount would have been attached on top of the town’s claim for treble damages, which means Oxford can get triple the amount of actual damages that town officials say they were able to prove was missing after they reviewed a sampling of tax payments between 2007-09 and cross referenced them with bank deposit slips. That amount was $233,322, which, when multiplied by three, equals $699,396.
Oxford town attorney Fran Teodosio said he was disappointed with Tuesday’s ruling.
“It means it’s less that we can attach, but the case still has to go forward,” he said. “We obviously would have preferred it to be attached, but we don’t have it.”
The civil lawsuit filed by the town is in its early stages. Tuesday’s ruling wraps up pre-judgment remedy hearings, and the case now goes into a long discovery mode before a trial is even considered.
The process of bringing any financial retribution to the town, or any criminal charges against Guillet, could take longer than most town officials or residents would like.
As of Tuesday, no criminal charges had been filed, although the State Police Western District Major Crimes Squad says it is actively investigating the case. State Police Spokesman Lt. J. Paul Vance said cases such as these could take up to five years to investigate because so much research goes into them. The Guillet case has already been ongoing for 15 months.
The town learned about missing money after an employee in the tax office went to First Selectman Mary Ann Drayton-Rogers in December 2009 with concerns about checks found in the tax office that had not been deposited into the town’s bank account at Naugatuck Valley Savings and Loan. Town officials immediately began investigating, and Drayton-Rogers said she confronted Guillet about $3,093 that had not been deposited properly. Drayton-Rogers testified in court that Guillet admitted to stealing that check. That’s when Drayton-Rogers put Guillet on unpaid administrative leave – she later resigned – and contacted state police.
Once news broke about the case, the town began hearing complaints from residents who said they had received delinquent notices for taxes even though they had proof they had paid. Those claims totaled $671,768 when the town filed a civil lawsuit against Guillet in December; more complaints have since been filed and that number is closer to $680,000, municipal Finance Director James Hliva said.
Although Oxford’s claim for treble damages exceeds the amount in the lawsuit, town officials thought it unfair for Guillet to receive her pension. Guillet has already taken out $13,935 from one of her pension accounts and plans to use money from those accounts to pay attorney fees.
Teodosio said Tuesday’s ruling is not an order to distribute funds, and he’s looking into whether Oxford can hold onto money in the accounts.
Argument Centered Around Definition of “Creditor”
Teodosio said he challenged an interpretation of the state statute regarding pension accounts. (See his attached legal brief, as well as the brief filed by Guillet’s attorney, Dominick J. Thomas.)
In a nutshell, Teodosio states the law refers to specific pension accounts that cannot be revoked from municipal employees but does not specifically refer to 457(b) accounts. Further language in the statute states “any pension plan, annuity or insurance contract or similar arrangement not described” above in the statute… “shall be exempt from the claims of all creditors of such participant or beneficiary.”
Teodosio states in his brief that the omission of any reference to 457(b) accounts could be due to the nature of those accounts, which stipulate that, until withdrawal, the accounts are actually owned by the employer, in this case, the town of Oxford.
Teodosio’s brief states that Oxford is not a creditor and is therefore not barred by state statute from attaching Guillet’s accounts.
However, Thomas states that Oxford is indeed a creditor and therefore cannot attach retirement accounts.
His brief states:
“The first argument that the plaintiff has put forward is that the town of Oxford is not a “creditor” of the defendant. The statutes dealing with exempt property do not define the term ‘creditor.’ However, for the purposes of the Uniform Fraudulent Transfer Act, Connecticut General Statutes 52-552(a), et seq., a ‘credit means a person who has a claim.’…Black’s Law Dictionary defines 'creditor' as a person to whom a debt is owing by another person who is the ‘debtor,’ or one to whom money is due.' Under either circumstance, the plaintiff is claiming to be a creditor of the defendant since it is claiming money is due from her. If it is not making that claim then the prejudgment remedy was wrongfully granted.”
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