Jailed ex-Senate president’s bid to collect pension fought

• By JOE GYAN JR.
• Advocate New Orleans bureau
• Published: May 1, 2008 - Page: 8B - UPDATED: 12:10 a.m.

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NEW ORLEANS — Federal prosecutors are asking a judge not to cancel an order garnishing former Louisiana Senate President Michael O’Keefe Sr.’s state pension.

 The pension was garnished to cover the jailed ex-politician’s nearly $1.2 million share of restitution to a failed medical malpractice insurer that he and several other men were convicted of bilking.

Prosecutors also are opposing O’Keefe’s and his codefendants’ plan to pay their combined $4.7 million in restitution to the now-defunct Physicians National Risk Retention Group by using money from the liquidation of another company — Lloyds Assurance of Louisiana — connected to that case.

O’Keefe, who is serving a 19‰-year prison term in Beaumont, Texas, filed a motion in March asking U.S. District Judge Mary Ann Vial Lemmon of New Orleans to cancel the order garnishing his pension account with the Louisiana State Employees’ Retirement System. He is acting as his own attorney.

O’Keefe’s motion came two months after the federal government filed a civil lawsuit against O’Keefe, his daughter and an associate, alleging that O’Keefe had fraudulently transferred his pension payments to them to avoid collection of restitution in violation of federal and state law.

In a recently filed written response to O’Keefe’s motion, Assistant U.S. Attorney Peter Mansfield says O’Keefe and his codefendants have argued before that proceeds from the state court dissolution of the Lloyds case should somehow offset or negate the amounts they owe in restitution to the Physicians National estate.

“More notably, this Court has previously entertained and rejected O’Keefe Sr.’s present arguments and O’Keefe Sr. has not presented any compelling evidence why this Court’s prior decision should be revisited or reversed,’’ Mansfield wrote.

O’Keefe and his codefendants were “given credit, for lack of a better term, for the money in the Lloyds estate’’ when they were sentenced in 1996, he added. The amount of that credit was $4 million, he said.

Mansfield contends that O’Keefe’s motion “places somewhat of a new gloss’’ on the argument regarding the Lloyds estate by arguing that the defendants, not Physicians National, actually have a claim to the assets from the Lloyds liquidation.

“If this is actually the case and O’Keefe Sr. directly receives funds from the Lloyds liquidation, then the United States will certainly seize any such assets on behalf of the PNRRG for credit toward O’Keefe Sr.’s outstanding balance of restitution,’’ he wrote.

Mansfield said O’Keefe still owes $1,169,061 of the $1,174,849 in restitution to Physicians National, which

O’Keefe and his associates were hired to nurse back to health in 1991.

Physicians National insured 2,400 doctors in 47 states, including Louisiana.