$1 billion fraud – 11 arrests in Long Island Rail Road pension probe

They are accused of falsely declaring themselves disabled in a “game where every retiree was a winner,” said FBI head.

October 27, 2011 3:10 p.m.
(AP) – Hundreds of Long Island Rail Road employees may have cheated their way to big pensions through a $1 billion fraud by paying off doctors to say they were unable to work, authorities said Thursday.
Eleven people, including two orthopedists and a former union official, face charges in an investigation of fraud in the pension system used by employees of the nation’s largest commuter railroad.
Janice Fedarcyk, the head of New York’s FBI office, called it a “game where every retiree was a winner.” U.S. Attorney Preet Bharara said the disability pension program was not designed to be “a feeding trough for the truly dishonest,” but authorities say that’s what happened.
Hundreds of LIRR employees falsely declared themselves disabled to collect more pension money from the ages of 50 to 65, when they would otherwise qualify for full benefits, the complaint said.
The federal criminal complaint said a retired engineering manager who complained of severe hand, knee, shoulder and back pain often played tennis and golf while collecting about $105,000 yearly in combined pension and disability payments.
Another former employee said she suffered neck, shoulder and hand pain from computer work and couldn’t stand more than five minutes without leg pain. She was “surveilled shoveling heavy snow for approximately one and a half hours,” the complaint said. She gets about $108,000 a year in combined pension and disability payments.
“The disability doctors prescribed for the LIRR employees a series of unnecessary medical tests, including at times rounds of x-rays, scans and nerve conduction tests, as well as purported treatments, including physical therapy, in order to pad the patients’ medical files,” the complaint said.