Amnesty for NY rail workers who faked disabilities

Associated Press

NEW YORK (AP) — Long Island Rail Road retirees who faked disability claims in order to get more lucrative pensions would avoid prosecution and be able to keep their benefits if they admit wrongdoing under a deal with the federal government, officials said Tuesday.

In announcing the arrest of an additional 10 people in the months-long probe, federal officials also said they are offering an amnesty program for others to come forward by July 6. In exchange for admitting they made false or misleading statements to get more money from disability claims, former workers would be able to keep their pension benefits and won't be prosecuted.

But those arrested or under investigation are ineligible for the deal.

Six retirees were arrested Tuesday morning on Long Island, FBI spokesman J. Peter Donald said. Another person was arrested in Florida. The charges included conspiracy to commit health care fraud and the defendants were expected in court later Tuesday.

The round-up came five months after an initial batch of 11 arrests targeted railroad workers who retired legitimately from the railroad, then filed disability claims due to supposed on-the-job injuries, only to be spotted later playing golf and tennis, working out, and even riding in a 400-mile bike race. Two doctors were charged with fabricating or exaggerating medical assessments to bolster bogus claims.

While fewer than two dozen people have been arrested so far, authorities have said they suspect that hundreds of other workers pulled similar stunts, inflating future costs for the commuter rail system's retirees by an estimated $1 billion. The U.S. Railroad Retirement Board and the LIRR are separate organizations, and workers received disability payments from the former and pensions from the latter.

Under the amnesty program, workers who respond by July 6 give up the right to all future disability benefits. Workers who respond by Aug. 10 would also have to give back half the money they received under the phony circumstances. LIRR president Helena Williams said the program was an important opportunity for anyone else who has been dishonest.

"We urge those involved to carefully consider this offer. These federal pension benefits ... must be reserved for those who are truly disabled," she said in a statement.

Federal officials said some may have to apply for the amnesty program in order to find out whether they are under investigation and thus ineligible.

Those who don't come forward, or who federal authorities determine engaged in fraud, will face criminal prosecution, according to Preet Bharara, the U.S. Attorney for the Southern District of New York.

Agents began investigating after The New York Times wrote in 2008 about the suspiciously high rate of disability pensions being awarded to middle-aged LIRR retirees. Under contract, workers can retire at the relatively young age of 50 if they've been employed by LIRR 20 years.

An investigative arm of Congress later reported that the federal Railroad Retirement Board, which is supposed to review requests for disability pensions, had approved nearly all LIRR disability applications, despite evidence that something was amiss.

Between 2004 and 2008, nearly 870 LIRR workers between ages 50 and 55 were granted a disability pension.

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Associated Press Writers David B. Caruso and Frank Eltman in Garden City, N.Y., contributed to this report.

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