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10 Arrested In Brazen, Billion-Dollar LIRR Disability Fraud Scheme


By

Jen Chung

Published Oct 27, 2011

Modified Oct 27, 2011


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By

Jen Chung

Published Oct 27, 2011

Modified Oct 27, 2011


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Three years after the NY Times reported on rampant disability fraud among Long Island Rail Road employees, the federal authorities have arrested ten people for their roles in perpetrating the billion-dollar scam. According to the Times, "Most of the people — those charged in the case include seven former railroad workers accused of making false pension claims, the two doctors and a former federal railroad pension agency employee who helped the workers file the claims — were taken into custody in the early morning hours at their homes by F.B.I. agents and state investigators, the people said."

The Times article pointed out how many LIRR employees apply for disability after retiring...and most ended up getting those federal payments. Back in 2004, 97% of employees who retired after the age of 50, applied for and received disability. The implications of retiring early are huge, due to the costs of "overtime, training of replacements and early pension payments." A few days after the article, the feds raided the Long Island office of the Railroad Retirement Board.

You can read the federal complaint (PDF), which alleges that the defendants allowed retiring employees to earn as much as they did pre-retirement and cites these examples of faked claims:

The LIRR introduced measures to thwart disability abuse after the Times' articles.

Tagged

arrest

disability

fraud

long island rail road

MTA

pension

retirement

scam


Jen Chung

Jen Chung is a former WNYC and Gothamist editor.

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