Ex-Detroit pension trustee must pay $175K
Former Detroit pension fund trustee Paul Stewart has been ordered to pay $175,000 in restitution to the city of Detroit’s Police and Fire Retirement System as part of his public corruption conviction.
Stewart, 57, an ex-cop and former vice president of the Detroit Police Officers Association, was sentenced to nearly five years in prison for his role in a bribery and kickback scandal that undermined Detroit’s Police and Fire Retirement System and General Retirement System.
In 2014, Stewart was convicted alongside former Detroit Treasurer Jeffrey Beasley and ex-pension fund lawyer Ronald Zajac, who has since died. Stewart and Beasley were accused of pocketing cash, free trips and more in exchange for approving $200 million in corrupt pension fund investments.
Two Detroit pension funds lost more than $95 million in the deals, weakening a pension system that faced takeover during the city’s landmark bankruptcy case.
Federal prosecutors had asked U.S. District Judge Nancy Edmunds to order Stewart to pay $16.8 million in restitution to the victims of his crimes, including pensioners, beneficiaries and employees who paid into Detroit’s retirement system.
On Feb. 23, Edmunds ordered Stewart to pay a lump sum of $20,000 on May 1 and begin monthly payments of $225 in June.
Stewart was a trustee on the city’s Police & Fire Pension fund from 2005 to 2011. During that time, businessmen pitching investments to the pension funds paid bribes and kickbacks for his vote totaling $63,750, including a Christmas basket with hidden cash, a $5,000 casino chip, trips to Florida for Stewart, limousine rides, drinks, meals and entertainment, prosecutors said.
In return, the bribe payers received $5.2 million from money-losing investments approved by Stewart that cost cops, firefighters and beneficiaries more than $47 million, prosecutors said.
Stewart was found guilty of pocketing bribes and kickbacks following a trial in 2014. During the trial, Stewart admitted accepting some cash, trips and other perks but said the gifts came from friends and did not influence his investment decisions.
Beasley must pay $400,000 in restitution to the pension system as part of an agreement he reached with the government over the issue. He is serving an 11-year prison sentence.