Convicted Ex-Judge Must Use Pension to Pay Restitution for Mortgage Fraud
Former Cook County Judge Jessica Arong O’Brien, who served a prison sentence for mortgage fraud, has been ordered by an Illinois federal judge to contribute nearly $117,000 from her judicial and state employee pension funds to fulfill her outstanding restitution obligation. The judge ruled that her pension contributions to the Judges’ Retirement System and the State Employees Retirement System should be utilized towards her $657,435 balance. This decision stems from the fact that her entire restitution judgment became due upon her release from prison, and the government has multiple enforcement mechanisms at its disposal.
U.S. District Judge Thomas Durkin granted O’Brien an opportunity to appeal the order before it takes effect. However, her chances of success in challenging the ruling are slim due to existing legal precedents. Although the judge acknowledged that a denial of stay could cause irreparable harm to O’Brien, considering the significant financial impact and the inability to reverse the refund of her pension contributions.
O’Brien contended that allowing the government to access her pension funds would be an improper modification to her restitution payment order, which initially required her to pay only 10% of her net monthly income. Judge Durkin disagreed, stating that the language used in his sentencing and judgment makes it clear that restitution is now due, and the monthly installments are a minimum requirement, not a maximum limit. He emphasized that the government can collect the outstanding balance through means other than the monthly payments, as explicitly stated in the court’s written judgment.
Furthermore, O’Brien’s argument that withdrawing her pension contributions early would have adverse tax consequences did not persuade Judge Durkin. Citing a previous Seventh Circuit case in which the government reserved a portion of retirement funds for tax penalties, he determined that a similar approach should be followed in this case.
O’Brien also failed to convince the court that tapping into her contributions would unconstitutionally deprive her husband and children of their survivorship rights to her pension. The judge referenced the United States v. Sayyed case from the Seventh Circuit, which invalidated her tax liability argument and emphasized that the government’s access to retirement funds for restitution enforcement is based on the rights she currently possesses.
A government representative declined to comment on the matter, while O’Brien did not respond to requests for comment.
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In conclusion, former judge Jessica Arong O’Brien must utilize her pension contributions to fulfill her restitution obligations following her mortgage fraud conviction.
Convicted Ex-Judge Must Use Pension To Pay Restitution
Law360 (May 26, 2023, 4:10 PM EDT) — A former Chicago state judge who served a year in prison following a mortgage fraud conviction must fork over nearly $117,000 in judicial and state employee pension contributions to help satisfy her outstanding restitution obligation, an Illinois federal judge has ruled.
Former Cook County Judge Jessica Arong O’Brien must use her contributions to the Judges’ Retirement System and the State Employees Retirement System to help pay her $657,435 balance because her entire restitution judgment became due upon her prison release, and collecting her pension payments is just one of many ways the government can enforce it, U.S. District Judge Thomas Durkin said Thursday.
Judge Durkin also gave O’Brien time to appeal his order before it takes effect. She likely won’t succeed on the challenge’s merits given existing governing precedent, but “if a stay is denied in error, O’Brien would suffer irreparable harm in light of the meaningful financial impact of the collection and inability to reverse the refund of her pension contributions,” the judge said.
O’Brien had argued that allowing the government to tap into her pension contributions constituted an improper modification to her restitution payment order, which requires her to pay only 10% of her net monthly income every month. But Judge Durkin disagreed, saying his express language both at sentencing and in his judgment “make clear that restitution is now due, and the monthly installments are a floor, not a ceiling.”
“Further, nothing in the court’s written judgment or statements at sentencing prevents the government from collecting the balance owed by means other than and in addition to the monthly payments,” he said.
Judge Durkin also rejected O’Brien’s argument that the tax-related consequences of withdrawing her contributions early should prevent him from allowing the government to collect them. Pointing to a Seventh Circuit case in which the government set a portion of remitted retirement funds aside for a criminal defendant’s tax penalties, Judge Durkin said he “will follow the same course here.”
O’Brien also failed to convince the court that tapping into her contributions would unconstitutionally deprive her husband and children of their survivorship rights to her pension, Judge Durkin said.
“As the Seventh Circuit explained, the government’s access to retirement funds to enforce restitution is not based on rights that O’Brien ‘would prefer to exercise; rather it is based on upon the rights [she] possesses,'” he said, citing United States v. Sayyed, the same appellate case that defeated her tax liability argument.
A representative for the government declined to comment Friday, and O’Brien didn’t immediately respond to a request for comment.
A jury convicted the former judge of bank and mail fraud in February 2018, finding she ran a three-year, $1.4 million mortgage fraud scheme involving two Chicago investment properties with co-defendant Maria Bartko while she was working as a special assistant attorney general in Illinois’ Department of Revenue and serving as a part-time loan officer for Amronbanc Mortgage Corp.
O’Brien has paid $2,765 toward her full $660,200 restitution judgment, which includes a $200 special assessment fee, and is currently serving two years of supervised release following the one-year incarceration portion of her 2018 sentence, according to court records.
O’Brien and Bartko teamed up to file the false loan applications and later find a straw buyer for the judge’s properties, prosecutors alleged. The former judge used the proceeds of a false mortgage application to buy a property and sought to refinance that property, as well as a second, using false information about her income and employment, the government claimed.
O’Brien also used false information to apply for a commercial line of credit to maintain the properties, and she and Bartko then worked to find a straw buyer for the properties, knowing the buyer would use ill-gotten mortgage proceeds to carry out the purchase, prosecutors claimed.
The indictment was the first time federal prosecutors had brought charges against a sitting judge in more than a decade, although the jury didn’t hear about the position O’Brien held at the time of trial. Bartko was sentenced to seven months in prison after admitting in 2018 that she’d participated in the scheme.
O’Brien’s law license was initially suspended by the Illinois Supreme Court in April 2018, two months after her conviction. And while the state high court’s order was effective immediately, it also left the door open for her to receive further punishment.
The Illinois Attorney Registration and Disciplinary Commission‘s administrator recommended in 2019 that she face more discipline following her conviction, saying she’d engaged in dishonest and criminal actions that reflected negatively on her honesty and fitness as a lawyer. A disciplinary panel later recommended that O’Brien be disbarred, which the Illinois Supreme Court accepted in September after a review panel backed the suggestion in June.
The government is represented by Matthew Madden, Edward Liva Jr. and Scott Heffron of the U.S. Attorney’s Office for the Northern District of Illinois.
O’Brien is representing herself.
The case is USA v. O’Brien et al., case number 1:17-cr-00239, in the U.S. District Court for the Northern District of Illinois.