Thread: 11 Charged in $1 Billion L.I.R.R. Disability Scheme

11 Charged in $1 Billion L.I.R.R. Disability Scheme

By WILLIAM K. RASHBAUM
Published: October 27, 2011

Eleven people, including two doctors and a former union president, were charged on Thursday in a “massive fraud schemeâ€

Statement by Special Agent in Charge Diego Rodriguez on Long Island Railroad Fraud Scheme Involving up to $1 Billion in Fraudulent Annuity Payments

FBI New York October 27, 2011
Main Press Line212-384-2100

The complaint unsealed today summarizes a bold and deceptive scheme involving a massive fraud against the Railroad Retirement Board’s occupational disability program. One that played out for more than 10 years, culminated in the payout of over $300 million in fraudulently obtained annuity payments, and served as a game where everyone who played was a winner—until today.

Although only a handful of Long Island Railroad retirees are named in today’s complaint, it is estimated that this scheme involved a significant number of railroad retirees who sought compensation beyond retirement for a disability that did not exist.

In 2007 alone, over 84 percent of Long Island Railroad retirees sought and received RRB disability. And throughout the period of time detailed in this complaint, almost all employees who filed disability applications saw one of three disability doctors.

Applications were filed by employees who suddenly claimed they were plagued by a physical disability that prohibited them from performing certain tasks. They paid a hefty stipend to doctors on board with the plan in return for a fraudulent medical assessment, after which they hired facilitators who were “in the knowâ€