The former chief financial officer of a private agency dedicated to helping the mentally disabled will be spending two years in federal prison for allegedly illegally diverting Social Security payments from individuals under their care.
Frank Pannullo was also sentenced to three years of supervised released and will also be jointly responsible with others convicted in the alleged scheme for reimbursing over $600,000 to those from whom the government says the funds were diverted.
According to federal prosecutors, Pannullo conceived the scheme when the former head of Hillsborough Association for Retarded Citizens approached him regarding the association’s continual lack of finances. He told investigators that HARC’s CEO Richard Lilliston raised the issue with him in 2002, at which time he developed the idea of diverting funds payed out from Social Security to their clients into an endowment that was initially used for operating expenses. According to investigators, the fund was eventually also used to pay bonuses to executives and provide perks including an $1,800-per-month vehicle allowance for both men.
In addition, investigators say that Lilliston tasked Pannullo with obtaining signatures from clients on documents purporting to authorized a pooling of their benefit funds. However, such documents did little to absolve either men in the scheme, as many of the individuals whose signatures Pannullo sought to obtain lacked the sufficient mental capacity to comprehend, let alone consent to, such an agreement.
Pannullo pled guilty to involvement in the conspiracy and later served as the government’s key witness against Lilliston. This, in addition to his apparent remorse and prior military service, led prosecutors to seek a reduced punishment, which U.S. District Judge Mary Scriven granted.