FIRST DIVISION
March 26, 2001

No. 1-99-1383

JUSTICE O'MARA FROSSARD delivered the opinion of the court:

Petitioner, William Devoney, a former Chicago policelieutenant, appeals the circuit court's decision to affirm the order of theRetirement Board of the Policemen's Annuity and Benefit Fund of the City ofChicago (Board) denying him pension benefits as a result of his federalconviction for mail fraud. Petitioner contends the Board's interpretation ofsection 5-227 of the Illinois Pension Code (Code) (40 ILCS 5/5-227 (West 1998))regarding the relationship of felony convictions to forfeiture of pensionbenefits was contrary to law, that the Board's decision to apply the forfeitureprovisions of section 5-227 of the Code (40 ILCS 5/5-227 (West 1998)) wasagainst the manifest weight of the evidence and that he was entitled toprejudgment interest pursuant to section 2 of the Interest Act (815 ILCS 205/2(West 1998)). We affirm.

Petitioner was appointed to theChicago police department in 1960 and attained the rank of lieutenant. OnOctober 20, 1994, petitioner and 24 other persons were indicted by a federalgrand jury for conspiracy to commit insurance fraud. Petitioner was named in onecount charging mail fraud. He resigned from the police department the followingmonth. On November, 7, 1994, petitioner entered into a written plea agreementwith the United States Attorney's office and pled guilty to the charge of mailfraud. In August 1995, the Board refused petitioner's application for retirementbenefits on the basis of this felony conviction.

Petitioner testified at a hearing before the Board inSeptember 1995 that he pled guilty to one count of the 61-count federalindictment. This count charged that petitioner and two others, Matt Raimondi andDavid Ballog, Jr., devised a scheme to defraud and obtain money from aninsurance company. Ballog approached petitioner about the scheme to defraud, andpetitioner agreed to participate. The count alleged that, as part of the scheme,petitioner conspired with his neighbor, Raimondi, and Ballog to give a falsereport about the place of a personal injury accident involving petitioner'swife, caused a physician to change a report about the place of the accident, andspoke with insurance adjustors relating to the claim. Petitioner also used theUnited States Postal Service to mail evidence of wage losses. Ballog pretendedto be petitioner's brother-in-law and helped negotiate a $70,000 settlement forthe false claim regarding personal injury to petitioner's wife.

On November 7, 1994, petitioner entered into a plea agreementwith the United States Attorney's office and admitted to the facts allegedwithin the indictment. On June 21, 1995, the federal district court sentencedpetitioner to 16 months of imprisonment, plus supervised release andrestitution. The Board had before it the indictment and the sentencingtranscript. Petitioner admitted before the Board that he was a police officerentitled to carry a weapon at the time of the fraud and part of his duties wereto arrest those who committed crimes in his presence. Petitioner next testifiedthat he had known codefendant David Ballog for 10 years, and he knew that Balloggambled on horse races, but otherwise had no knowledge of Ballog's criminalactivity. After petitioner's wife broke her ankle, Ballog proposed a scheme todefraud an insurance carrier. Petitioner admitted that he did not arrest orreport Ballog to the authorities. In connection with this false claim,petitioner spoke with the insurance adjustor. In response to a question from theinsurance adjustor, he informed the adjustor that he was a lieutenant with theChicago police department, but he never met with the adjustor while in uniform.Petitioner did not witness his wife's fall, and his neighbor, Raimondi, withpetitioner's knowledge, submitted a false claim to his insurance carrierregarding petitioner's wife. Petitioner did not arrest or report Raimondi.

On July 23, 1998, the Board voted to deny petitioner'sapplication. In a seven-page order, the Board stated that it reviewed theindictment, petitioner's plea agreement, and the transcript of petitioner'ssentencing hearing. During the sentencing hearing, the victim of a March 1994sexual assault testified she believed that petitioner had interviewed her undera false name in an attempt to get her to withdraw her identification of herassailant, who was related to Ballog. Petitioner disputed this testimony andcalled witnesses to demonstrate that he did not interview the sexual assaultvictim. The retired police officer whom petitioner was alleged to haveimpersonated testified that he was the one who interviewed the victim. Thiscredibility issue was considered at length at the sentencing hearing, and thedistrict court determined that the prosecution had proved by a preponderance ofthe evidence that petitioner interfered with the investigation of the sexualassault. The federal court increased petitioner's sentence based on hisobstruction of justice.

Ballog testified at the sentencing hearing that in 1989 heasked petitioner to find out about an outstanding warrant against him.Petitioner loaned Ballog $5,000 for his mortgage payment and gave Ballog $8,500from the insurance settlement of petitioner's wife's claim. The Board alsoconsidered the federal court's finding that petitioner's conduct regarding thesexual assault case was not directly involved with the fraud count, but thatpetitioner had obstructed justice by hiding the facts involved.

The Board relied on section 5-227 of the Code, entitled"Felony conviction," which states in part: "None of the benefitsprovided for in this Article shall be paid to any person who is convicted of anyfelony relating to or arising out of or in connection with his service as apoliceman." 40 ILCS 5/5-227 (West 1998). The Board then found thatpetitioner had engaged in a "scheme to defraud" which involved his"knowing use of his position as a Chicago Police Officer." It furtherfound that petitioner had obstructed justice in the sexual assault case.Petitioner was not considered to be a credible or truthful witness. The Boardnoted that petitioner's statements about his relationship to Ballog andknowledge of Ballog's criminal background were contradicted by the record. TheBoard found that petitioner's "willingness to knowingly participate withothers and to protect those co-conspirators was not in keeping with the activityof a police officer and his oath of office." The Board also found that"but for the fact that [petitioner] was a Police Officer of highrank," he would not have been in a position to participate in the scheme todefraud. The Board then denied petitioner's claim for pension benefits.

On August 18, 1998, petitioner brought his petition foradministrative review. The circuit court found that the issue was whetherpetitioner was engaged in "activity relating to or arising out or inconnection with his services as a policeman." The court summarized thefacts in two cases and chose to follow Dvorak v. Retirement Board of thePolicemen's Annuity & Benefit Fund, 287 Ill. App. 3d 399, 405-06 (1997),where the board denied pension benefits to a retired policeman, rather than Cullenv. Retirement Board of the Policemen's Annuity & Benefit Fund, 271 Ill.App. 3d 1105, 1108-09 (1995). The circuit court confirmed the Board's decisionand this appeal followed.

Petitioner contends that the Board improperly applied section5-227 of the Code to the facts of this case. Although both parties maintain thatthe facts are not in dispute, petitioner asserts that the Board misstatedcertain facts in its order. The Board's factual findings may be reversed only ifthey are contrary to the manifest weight of the evidence. Abrahamson v.Illinois Department of Professional Regulation, 153 Ill. 2d 76, 88 (1992). Ade novo standard of review is applied to the Board's construction of thestatute and determination of the law. Harrisburg-Raleigh Airport Authority v.Department of Revenue, 126 Ill. 2d 326, 331 (1989). In this analysis, weneed not defer to the circuit court's determination (Zaruba v. Village of OakPark, 296 Ill. App. 3d 614, 622 (1998)), although substantial weight isgiven to an agency's interpretation of a statute it administers. Stillo v.State Retirement Systems, 305 Ill. App. 3d 1003, 1006 (1999). Pension lawsshould be liberally construed in favor of those to be benefitted. Kozak v.Retirement Board of the Firemen's Annuity & Benefit Fund, 95 Ill. 2d211, 217 (1983).

We agree with the Board that, in the context of this case,the application of section 5-227 of the Code presents a mixed question of lawand fact. See City of Belvidere v. Illinois State Labor Relations Board,181 Ill. 2d 191, 205 (1998). The Board applies a two-part test when deciding theissue of whether a police officer's pension benefits should be forfeited underthe first paragraph of section 5-227. The Board first determines the factualcircumstances giving rise to the police officer's felony conviction, which, asthis case demonstrates, may be in conflict. The Board then interprets andapplies the statutory language "any felony relating to or arising out of orin connection with his service as a policeman" to the facts of the case.Therefore, the proper standard of review is the clearly erroneous standard,which provides some deference to the Board's experience and expertise. Cityof Belvidere, 181 Ill. 2d at 205.

We believe that the Board's factual findings were not clearlyerroneous. The findings of fact to which petitioner primarily objects are that:(1) petitioner participated in a scheme to defraud over a long period of time;(2) petitioner obstructed justice with regard to "his conduct with Ballogand the rape case"; and (3) petitioner used his position as a Chicagopolice officer to further the insurance fraud scheme. There is no dispute overthe fact that the insurance scheme in which petitioner was involved wascompleted within a period of months. In addition, Ballog testified atpetitioner's sentencing hearing that he had a close relationship with petitionersince the early 1980s and that petitioner helped him resolve an outstandingwarrant. Based on this record, the Board had sufficient evidence to concludethat Ballog approached petitioner to participate in the insurance fraud schemebecause of their close, long-term relationship and that the scheme was completedwithin a period of months. Second, regarding the obstruction of justice issue,the Board basically adopted the factual findings of the federal district court,which, after a contested hearing, determined that petitioner obstructed justice.The testimony at petitioner's hearing, therefore, provides ample evidence tosupport this conclusion. However, applying section 5-227, we may only considerpetitioner's felony conviction for mail fraud in determining whether he hasforfeited his pension benefits. Petitioner had not been charged with orconvicted of any felony related to obstructing justice regarding the sexualassault case, and thus the language of section 5-227 precludes us fromconsidering this conduct in determining whether petitioner has forfeited hispension benefits. Therefore, petitioner's conduct in obstructing justice in thesexual assault case is irrelevant to our analysis of whether petitioner hasforfeited his benefits under section 5-227.

The third factual finding that petitioner objects to is theBoard's finding that petitioner used his position as a Chicago police officer tofurther the insurance fraud. In the context of that finding petitioner disagreeswith the Board's legal interpretation of section 5-227 which raises the mainissue in this appeal: whether the Board's decision that petitioner's mail fraudconviction related to, arose out of, or was in connection with his service as apoliceman is clearly erroneous. Section 5-227 states as follows:

"None of the benefits provided for in this Article shall be paid to any person who is convicted of any felony relating to or arising out of or in connection with his service as a policeman.

None of the benefits provided for in this Article shall bepaid to any person who is convicted of any felony while in receipt of disability benefits.

None of the benefits provided for in this Article shall be paid to any person who is convicted of any felony relating to or arising out of or in connection with the intentional and wrongful death of a police officer, either active or retired, through whom such person would become eligible to receive, or is receiving, an annuity under this Article." 40 ILCS 5/5-227 (West 1998).

Recently, in DiFiore v. Retirement Board of the Policemen