A former official at the Merrimack Education Center is facing federal charges that he engaged in a long-running scheme to defraud the state’s pension system by falsely listing center workers as employees of a separate state agency so they could qualify for retirement benefits.
The grand jury indictment of Carl A. Nystrom, a top executive at the private, nonprofit Education Center until August, marks the first criminal charges to emerge from a multiagency investigation of John B. Barranco, an educator accused of siphoning $11.5 million from a state agency for special needs children to the center and paying himself and a former girlfriend lavish salaries.
Federal and state investigators say that Nystrom falsely listed former lobbyist Richard W. McDonough and three other center workers as employees at the state agency, called the Merrimack Special Education Collaborative. As a result, they qualified for state pensions even though they were not eligible.
Tuesday’s indictment also says that Barranco helped Nystrom illegally obtain a state pension by falsely claiming that Nystrom worked for the collaborative.
Neither McDonough nor Barranco is mentioned by name in the Nystrom indictment, but dates and other details make clear that the indictment refers to those two individuals.
On Wednesday, E. Peter Parker, an attorney for Nystrom, said the former education center official is innocent.
“Carl Nystrom did not do anything to obtain for himself or for anyone else a pension to which they were not entitled,” he said. “He is an honest man who always acted in good faith and performed his job to the best of his abilities.”
Nancy Sterling, spokeswoman for the Merrimack Education Center, issued a statement saying the center “believes in the constitutional presumption of innocence afforded to those indicted,” and will continue to cooperate with investigators.
Thomas R. Kiley, an attorney who has represented Barranco in other investigations, would not comment except to say that “Carl has done great work over the course of time and I’m rooting for him.”
Thomas Drechsler, an attorney who has represented McDonough, said the onetime lobbyist “is not the subject of the indictment.”
“I’m not aware of any further legal matter that pertains to him at this time,” he said.
McDonough is in federal prison for his role in the bribery scheme that brought down former House speaker Salvatore F. DiMasi. The state Retirement Board revoked McDonough’s pension.
The Globe reported in June 2011 that prosecutors were conducting a grand jury investigation into the Merrimack Special Education Collaborative, seeking financial records for current and former employees, including Barranco and his former girlfriend, Mary A. Clisbee.
For years, Barranco served as executive director of both the Special Education Collaborative and the Education Center, which investigators say positioned him to siphon funds from the collaborative.
An investigation by the state’s inspector general, then Gregory W. Sullivan, disclosed Barranco’s alleged abuses, recommended that the 10 public school districts in the education collaborative sever ties with the Merrimack Education Center.
Thomas E. Lent, an attorney for the collaborative, said the agency is heeding Sullivan’s advice and has cut all ties except for lease agreements and a transportation contract scheduled to expire at the end of the school year.
Glenn A. Cunha, the current inspector general, said that Nystrom’s “leadership role at the nonprofit organization put him in a position to ensure that the Merrimack Education Center followed the law.”
If convicted on all 27 counts in the indictment, Nystrom could face up to 20 years in prison and fines of $250,000 for each count.