38-912. Civil liability; restitution or payment
of fine; violation; classification; offset of benefits
A. A person who defrauds the plan or who takes, converts, steals or
embezzles monies owned by or from the plan and who fails or refuses to return the monies
to the plan on the board's written request is subject to civil suit by the plan in the
superior court in Maricopa county. On entry of an order finding the person has defrauded
the plan or taken, converted, stolen or embezzled monies owned by or from the plan, the
court shall enter an order against that person and for the plan awarding the plan all of
its costs and expenses of any kind, including attorney fees, that were necessary to
successfully prosecute the action. The court shall also grant the plan a judicial lien on
all of the nonexempt property of the person against whom judgment is entered pursuant to
this subsection in an amount equal to all amounts awarded to the plan, plus interest at
the rate prescribed by section 44-1201, subsection A, until all amounts owed are paid to
the plan.
B. If a member is convicted of, or discharged because of, theft, embezzlement,
fraud or misappropriation of an employer's property or property under the control of the
employer, the member is subject to restitution and fines imposed by a court of competent
jurisdiction. The court may order the restitution or fines to be paid from any payments
otherwise payable to the member from the plan.
C. A person who knowingly makes any false statement or who falsifies or permits to
be falsified any record of the plan with an intent to defraud the plan is guilty of a
class 6 felony. If any change or error in the records results in any member or
beneficiary receiving from the plan more or less than the member or beneficiary would
have been entitled to receive had the records been correct, the local board shall correct
the error, and as far as practicable shall adjust the payments in a manner that the
actuarial equivalent of the benefit to which the member or beneficiary was correctly
entitled shall be paid. If a member is convicted of a crime pursuant to this subsection
the member is entitled to receive a lump sum payment of the member's accumulated
contributions but forfeits any future compensation and benefits that would otherwise
accrue to the member or the member's estate under this article.
D. Notwithstanding any other provision of this article, the board may offset
against any benefits otherwise payable by the plan to a member or survivor any court
ordered amounts awarded to the board and plan and assessed against the member or
survivor.
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