U.S. prosecutors on Thursday charged 11 people in connection with an alleged $1 billion fraud involving hundreds of railroad workers filing false disability claims.
In some cases workers claimed they were unable to work even while they played golf, shoveled snow or rode bikes, the complaint says.
Former Long Island Railroad workers, doctors and a federal railroad agency employee are accused of participating in the scheme in which employees filed disability claims shortly before they retired. The move allowed them to get disability pay on top of their retirement pension, prosecutors said.
In filing the claims, the railway workers allegedly paid between $800 and $1,200 to hire one of several disability doctors.
Those doctors would then conduct unnecessary tests and concoct a medical issue that would allow the workers to go on disability, prosecutors said.
Two have been charged and a third doctor has died.
The U.S. attorney’s office in Manhattan said the scheme cost the Railroad Retirement Board more than $1 billion. The investigation developed after a series of reports by The New York Times starting in 2008.
The Times said that almost every longtime LIRR employee was receiving disability payments, resulting in a disability rate sharply higher than other railroads.
In many cases, workers were far healthier than those claims would indicate, according to prosecutors.
One defendant, a former engineering manager, receives about $105,000 a year in pension and disability pay, based on “severe pain when gripping and using simple hand tools and pain in his knees, shoulder and back from bending or crouching,” the complaint says.
An investigation found, however, that he plays tennis several times a week and golfs regularly in his retirement.
Another defendant was seen shoveling heavy snow and walking with a baby stroller for 40 minutes, despite a disability claim in which she claimed to be unable to stand for more than five minutes without leg pain. She is paid at least $108,000 a year by the railroad authority, prosecutors said.
U.S. Attorney for the Southern District of New York Preet Bharara was expected to announce the mail fraud and conspiracy to commit health care fraud charges later on Thursday.
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now multiply that a few times for ss disability. railroad pensions are paid by taxpayers
Amazing that the pension manager didn’t raise any red flags after EVERY RETIREE went on disability… That is the problem when the unions dominate an industry such as the railroads and then into the government that runs the RRB. The union’s power intimidates and slowly creeps into management where they become complaisant in the fraud. The same issues happen out here in CA where every public employee works overtime leading up to their retirement in order to boost their pensions (pensions are calculated by last 3 months wages in my county)… ROME BURNS