10 Arrested in $1 Billion L.I.R.R. Disability Scheme

By WILLIAM K. RASHBAUM

Excerpts from The New York Times … N.Y. / Region

Published: October 27, 2011

Ten people, including a doctor and a former union president, were arrested early Thursday and charged in a major fraud scheme in which hundreds of Long Island Rail Road workers made false disability pension claims costing a federal agency an estimated $1 billion, according to people briefed on the matter.

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The Times articles reported that virtually every career employee of the railroad was applying for and receiving disability payments, giving the Long Island Rail Road a disability rate of three to four times that of the average railroad. The Times found that retired railroad employees who had successfully claimed disability were regularly playing golf at a state-owned course without charge — another perquisite of their disability.

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The two doctors charged in the case, and a third one who recently died, were responsible for more than three-quarters of the disability applications filed before 2008, running what amounted to “disability mills,” the people said. They prepared false medical assessments for the retirees to file with the Railroad Retirement Board, the people said.

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See full story for details of the recreational sports participation of other “disabled” retirees.