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Thread: Agents Raid Office in L.I.R.R. Disability Inquiry

  1. #1

    Default Agents Raid Office in L.I.R.R. Disability Inquiry

    Agents Raid Office in L.I.R.R. Disability Inquiry

    Published: September 23, 2008

    Federal agents raided the Long Island office of the federal Railroad Retirement Board on Tuesday amid an intensifying investigation into the legitimacy of disability payments to thousands of former employees — including white-collar managers — of the Long Island Rail Road.

    Uli Seit for The New York Times
    Federal agents took evidence from the Railroad Retirement Board’s Long Island office on Tuesday amid questions about the legitimacy of disability awards.


    Further Reading

    Long Island Rail Road

    A page of resources on the L.I.R.R., including a time line of the railroad's history and past coverage of labor disputes.

    Go to the Times Topics page »

    Uli Seit for The New York Times
    Investigators eventually hauled off nine file boxes and five personal computers. The retirement board’s inspector general declined to comment on the raid, except to say, “We’re investigating.”

    As former rail workers were arriving to file new disability claims, investigators showed up and closed the office in Westbury, eventually carting out nine file boxes and five personal computers.

    The raid came two days after The New York Times reported that nearly all career employees of the railroad — from 93 percent to 97 percent of retirees every year since 2000 — retire early and soon after begin getting disability payments from the federal agency. The retirement board almost never turns down a claim, and since 2000 has paid more than a quarter of a billion dollars in disability checks to former Long Island Rail Road workers, The Times found.

    Responding to the findings, Gov. David A. Paterson immediately directed the state attorney general to begin a wide-ranging inquiry into disability claims at the railroad. On Tuesday, he called on Congress to aid in that investigation.

    The raid, part of a separate federal inquiry, was led by investigators for the retirement board’s inspector general, joined by agents for the F.B.I.
    And after the disclosure that dozens of the railroad retirees have been enjoying free golf on state-owned courses, state parks officials have also begun a review of who gets an Access Pass, which gives the disabled free use of sports facilities in state parks.

    Martin J. Dickman, the retirement board’s inspector general in Chicago, declined to comment on the raid, except to say, “We’re investigating.”
    The retirement board is run by three presidential appointees, one representing labor, one representing management and one representing consumers.

    L.I.R.R. workers file for occupational disability benefits after they retire and can get them if they are unable to perform their regular railroad jobs — even though they might be capable of doing other work. Under retirement board rules, rail employees can pick the doctors who conduct their medical evaluations.

    “I understand the outrage that has ensued,” Jerome F. Kever, the management member of the railroad board, said in a statement released on Tuesday. “The occupational disability program that exists today under the Railroad Retirement Act too easily permits medical conditions normally associated with aging to be adjudicated as occupationally disabling.”

    In his statement, Mr. Kever recommended that the board’s policies be changed so that it could solicit medical information about applicants from railroad companies. He also recommended that disabled workers be required to undergo rehabilitation and be subject to mandatory medical reviews once a disability status is granted.

    Helena E. Williams, the L.I.R.R. president, said on Tuesday that the board “clearly needs to tighten its rules,” but added, “Another key issue is whether the L.I.R.R. belongs in the Railroad Retirement Board system at all.”

    Ms. Williams said she believed that the Metropolitan Transportation Authority, the L.I.R.R.’s parent agency, would save millions if the railroad were part of the Social Security system instead, because per capita taxes would be lower.

    On Tuesday, Michael S. Schwartz, the retirement board’s chairman, released a memorandum dated in August in which he asked the inspector general to “take whatever steps are necessary” to identify any possible problems with disability claims for L.I.R.R. employees. He said his release of the memo showed his early concern about the matter — a concern that arose after he was interviewed by The Times in July.

    Former employees of the Long Island Rail Road file for disability benefits at a rate three to four times that of the average railroad, records show.

    Unlike workers at most other railroads, they can often retire on a regular pension as early as age 50, allowing them to supplement that pension with tens of thousands of dollars in annual disability payments.

    Steven A. Bartholow, general counsel for the retirement board, said it was wrong for The Times to have suggested that the L.I.R.R. retirees receive “very generous benefits.”

    Mr. Bartholow said retired rail workers nationwide get on average $26,400 annually in disability payments from the retirement board. In 2005, records show, L.I.R.R. retirees got significantly more — about $36,000 a year — because their disability payments are based in part on their higher wages.

    The retirement board declined to provide a more current figure.

    Andrew W. Lehren and Nicholas Phillips contributed reporting.

    Copyright 2008 The New York Times Company

  2. #2


    New Subpoenas From Cuomo on L.I.R.R. Disability Cases

    Published: September 25, 2008

    ALBANY — Attorney General Andrew M. Cuomo has sent subpoenas to officials at the Long Island Rail Road and the federal Railroad Retirement Board as part of an investigation into questionable disability payments to retired L.I.R.R. employees, a senior assistant to Mr. Cuomo said on Thursday. The subpoenas seek documents and testimony.

    A page of resources on the L.I.R.R., including a time line of the railroad's history, a video report and recent articles from The Times.

    Mr. Cuomo’s office also sent a letter on Thursday to the inspector general of the retirement board, Martin J. Dickman, asking him to quickly produce copies of all documents collected this week from the board’s Long Island office as part of the inspector general’s own inquiry. The letter also suggested that Mr. Cuomo’s inquiry would be more credible than one led by Mr. Dickman.

    In a statement, Alex Detrick, a spokesman for Mr. Cuomo, said, “the attorney general believes that an independent, thorough and prompt investigation is required in order to protect New York taxpayers first and foremost.”

    The attorney general’s office is also subpoenaing individual retirees from the Long Island Rail Road, a senior official in Mr. Cuomo’s office said.

    The actions come after The New York Times reported on Sunday that nearly all career employees of the railroad — from 93 percent to 97 percent of retirees every year since 2000 — retire early and soon after begin getting disability payments from the federal agency. Their claims are almost never rejected by the Railroad Retirement Board, a federal agency that reviews disability claims and makes payments to L.I.R.R. retirees.

    The board has paid more than a quarter of a billion dollars in disability checks to former Long Island Rail Road workers since 2000. After the article appeared, Gov. David A. Paterson used his powers under state law to give Mr. Cuomo’s office jurisdiction to investigate the matter.

    On Tuesday, investigators from the Railroad Retirement Board, along with agents from the F.B.I., collected nine file boxes and five personal computers from the board’s offices in Westbury, N.Y. But Mr. Cuomo’s office, in its letter to the board’s inspector general, Mr. Dickman, said that “the allegations in this case merit an external investigation that is free from any possible claim of bias or taint” and that it wanted copies of the documents collected by Oct. 1.

    “We look forward to working with you and can see no reason why your office should have any trouble complying with our request right away,” the letter concluded.

    On Monday, Mr. Cuomo’s office subpoenaed personnel records from the L.I.R.R.

    Joseph Calderone, an L.I.R.R. spokesman, said, “We’re cooperating fully.”

    A spokesman for the retirement board declined to comment on the new subpoenas.

    William Tebbe, assistant inspector general for investigations, said his office would confer with the United States attorney for the Eastern District of New York, with whom the inspector general’s office has been cooperating, on how to respond to Mr. Cuomo’s request.

    Robert Nardoza, a spokesman for the United States attorney, Benton J. Campbell, had no comment.

    Copyright 2008 The New York Times Company

  3. #3
    Disgruntled Optimist lofter1's Avatar
    Join Date
    Jun 2005
    NYC - Downtown


    The Chairman of the federal Railroad Retirement Board is a Bush appointee:

    "Michael S. Schwartz was appointed Chairman of the Board by President Bush in 2003,
    and reappointed to a second term of office in 2007."

  4. #4


    New York Times

    January 7, 2014

    80 From N.Y. Police and Fire Forces Are Charged in Social Security Fraud


    Eighty retired New York City police officers and firefighters were charged on Tuesday in one of the largest Social Security disability frauds ever, a sprawling decades-long scheme in which false mental disability claims by as many as 1,000 people cost taxpayers hundreds of millions of dollars, according to court papers.
    Scores of those charged in the case essentially stole in plain sight, according to a 205-count indictment and a bail letter, collecting between $30,000 and $50,000 a year based on fabricated claims that they were completely incapacitated by serious psychiatric disorders. Many said that their actions in response to the Sept. 11, 2001, terrorist attacks were responsible for their psychiatric conditions, such as post-traumatic stress disorder, anxiety or depression.
    But their Facebook pages and other websites, according to the court papers, tell a starkly different story.
    The bail letter includes photographs culled from the Internet that show one riding a jet ski and others working at jobs ranging from helicopter pilot to martial arts instructor. One is shown fishing off the coast of Costa Rica and another sitting astride a motorcycle, while another appeared in a television news story selling cannoli at the Feast of San Gennaro on Mulberry Street in Manhattan.
    Indeed, prosecutors charge that they were coached by the scheme’s organizers to appear disheveled and disoriented during interviews, in which doctors initially evaluated their disability applications before finding them to be mentally disabled and incapable of any work whatsoever.
    The indictment, brought by the office of the Manhattan district attorney, Cyrus R. Vance Jr., charges a total of 106 people, four of whom are accused of running the scheme. That group includes an 83-year-old lawyer who has worked as an F.B.I. agent and a prosecutor, an 89-year-old pension consultant and a 61-year-old official of the union that represents New York City police detectives, according to the bail letter.
    Scores of those charged, including a number of the 72 retired officers and eight firefighters, were arrested early Tuesday morning and were scheduled to be arraigned on Tuesday in State Supreme Court in Manhattan before Acting Justice Daniel Fitzgerald.
    The indictment accuses the four men it identifies as the scheme’s organizers of directing hundreds of applicants to the Social Security Disability Insurance program to lie about their psychiatric conditions and feign certain symptoms in order to obtain benefits to which they were not entitled. Those men — the lawyer, Raymond Lavallee; the pension consultant, Thomas Hale; the detectives’ union official, John Minerva; and Joseph Esposito, 64, a retired New York police officer who recruited many of the other defendants — were charged with first- and second-degree grand larceny and attempted second-degree grand larceny.
    The other 102 people charged in the case, who all received Social Security disability insurance payments based on what the indictment alleges were false claims, were charged with second-degree grand larceny and second-degree attempted grand larceny.
    Mr. Vance was expected to announce the charges at a news conference Tuesday afternoon with officials from the United States Social Security Administration’s inspector general’s office, the Secret Service and Police Commissioner William J. Bratton.
    Most of those charged were expected to be arrested in the New York City area, but many live in other parts of the country, according to a person briefed on the matter.
    Joseph Conway, a lawyer for Mr. Hale, said that he and the lawyers representing Mr. Esposito and Mr. Lavallee, Brian Griffin and Raymond Perini, respectively, would not comment until after the arraignments Tuesday afternoon.
    Mr. Minerva’s lawyer, Glenn F. Hardy, said that his client was “a hard-working individual” who had never been arrested and was “leading an exemplary life.” He added, “He was working within the rules as he understood them.”
    The 11-page bail letter, addressed to Justice Fitzgerald, traced the scheme’s origins to 1988, and estimated that the retirees collected fraudulent disability awards ranging from approximately $50,000 to $500,000.
    “Based on evidence gathered by the SSA Inspector General and the Manhattan district attorney’s office, we estimate that over the 26 years of the charged scheme, fraudulent claims were filed with respect to as many as 1,000 individuals totaling as much as $400 million in benefits received,” according to the letter from the assistant district attorneys Bryan Serino and Christopher Santora.
    One person with knowledge of the matter said that Mr. Lavallee had been handling Social Security disability claims since the 1970s, and that investigators believed the scheme may have begun well before 1988.
    The letter said that the Social Security Administration had paid out a total of $21.4 million in benefits to the 102 people charged in the indictment.
    Several people involved in the case said that it was likely that as many as 50 more people would be charged in the coming weeks with making fraudulent claims. Investigators and prosecutors were still collecting evidence, the people said, to determine how many others among the roughly 1,000 people who they believe made false claims can be charged.
    This article has been revised to reflect the following correction:
    Correction: January 7, 2014
    An earlier version of this article misstated the amount of money that the Social Security Administration paid out in benefits to the people charged in the indictment. It is $21.4 million, not $2.5 million.

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