Eleven people have been released on bail in what federal prosecutors contend was a monumental fraud scheme by Long Island Rail Road employees falsely claiming disabilities in order to augment their pensions.
“Benefit programs like that of the U.S. Railroad Retirement Board disability program were designed to be a safety net for the truly disabled, not a feeding trough for the truly dishonest,” said Preet Bharara, U.S. attorney for the Southern District of New York.
“And in these tough economic times — with stretched budgets, rising costs, frozen wages unemployed people — it is especially disheartening to think that railroad employers would tell a train of lies to pad their early retirements and that a handful of doctors would traffic on the credibility of their profession to promote a culture of fraud.”
The federal complaint told of investigators conducting surveillance on some of the accused while they were taking part in strenuous physical activities that would have been impossible had they been suffering the disabilities they claimed.
Nearly all the accused were taken into custody early last Thursday.
The 74-page federal complaint said the scheme could cost the federal Railroad Retirement Board more than $1 billion in benefits “if disbursed in full.”
Prosecutors said more arrests were possible.
“If you have this kind of first-hand information, we would like to hear from you,” said Diego Rodriguez of the FBI. “For those who choose not to contract us, there is a good chance we will be contacting you.”
The defendants included those accused of seeking and getting fraudulent disability retirement status; so-called “facilitators,” who assisted disability candidates in filling out disability claim materials; and two doctors, who were accused of preparing fraudulent reports.
Prosecutors said one of the defendants, Gregory Noone, of East Islip, L.I., who draws a $105,000 pension, claimed severe pain in bending, crouching or gripping, although he often played tennis. And Steven Gagliano, of North Babylon, L.I., took a 400-mile bicycle trip, although he claimed disabling back pain, the complaint said.
The defendants, who have been freed on bail and nearly all of whom have travel restrictions, are Dr. Peter Ajemian, 62, Syosset, L.I.; Dr. Peter Lesniewski, 60, Rockville Centre, L.I.; Maria Rusin, 55, of Farmingdale, L.I.; Marie Baran, 64, of East Meadow, L.I.; Joseph Rutigliano, 64, of Holtsville, L.I.; Gregory Noone, 62, of East Islip, L.I.; Regina Walsh, 63, of New Hyde Park, L.I.; Sharon Falloon, 56, of Merrick, L.I.; Gary Satin, 62, of Moorsville, N.C.; Steven Gagliano, 55, of North Babylon, L,I.; and Richard Ehrlinger, 64, of Bayshore, L.I.
The U.S. Railroad Retirement Board administers benefits, including those for disability, for the nation’s railroad workers and their families. An LIRR contract allows workers to retire as young as 50 provided they have been employed for at least 20 years. An LIRR employee who retires and claims disability may receive a disability payment on top of their LIRR pension, regardless of age.
Prosecutors said Ajemian, with assistance of his office manager, Rusin and Lesniewki, used their medical practices as “disability mills” by preparing fraudulent medical narratives. The federal complaint said Ajemian and Lesniewski received some $800 to $1,200, usually in cash for the fraudulent assessments and narratives.
Court officials said the defendants will appear before a U.S. court judge within 30 days for further disposition of their cases.
Reach contributing writer Philip Newman by e-mail at timesledge
©2011 Community News Group
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