Corporate Compliance

LIRR retirees, physicians face charges in disability fraud scheme

Compliance Monitor, November 2, 2011

Federal prosecutors in New York City have charged 11 defendants with participating in a scheme from 1998 to the present in which Long Island Railroad (LIRR) workers claimed disability upon retirement so they could fraudulently receive extra benefits.

The U.S. Attorney for the Southern District of New York said in a joint press release with other federal and local officials that the scheme could ultimately cost the Railroad Retirement Board more than $1 billion in excess occupational disability benefits if disbursed in full.

The defendants include two physicians and an office manager for one of the physicians allegedly involved in falsely diagnosing LIRR retiring workers as disabled, according to the press release. Two facilitators who served as liaisons between the physicians and retiring workers and seven LIRR retirees, including one who served as a facilitator, also face charges

Prosecutors allege that the physicians received $800 to $1,200, often in cash, for each fraudulent assessment and millions of dollars in health insurance payments for unnecessary medical treatments and fees for preparing fraudulent medical support for the claimed disabilities. The retirees facing charges had been receiving combined annual pension and disability benefits ranging from approximately $57,000 to $108,000.

Read more on the Department of Justice website.

Most Popular