NEW YORK - FBI officials announced today the arrest of 11 people who are accused of exploiting the Long Island Rail Road's (LIRR) disability system to get big pensions as part of a massive scheme.
Prosecutors have charged the suspects, including two Long Island doctors, a former union president, and six retired railroad workers, with fraud.
Assistant Director in Charge Janice Fedarcyk said that the scheme could cost more than $1 billion.
The investigation began in 2009 when it was discovered that nearly 100 percent of disability claims filed by retired LIRR workers were approved.
Prosecutors say beyond the 11 people who were arrested, hundreds of railroad workers falsely claimed disability to boost their pensions ahead of retirement.
According to a 74-page criminal complaint, most of the workers would see two Long Island doctors, Peter Ajemian and Peter Lesniewski, who allegedly ran "disability mills." The physicians would perform unnecessary tests and write exaggerated medical narratives to ensure their patients could be approved for disability, according to the document. In return, workers would allegedly pay them about $1,000 cash.
"LIRR employees would decide in advance when they wished to retire, usually in [their] early 50s, and then in a very impressive display of clairvoyance would effectively schedule the onset of their disability," says U.S. Attorney Preet Bharara.
LIRR President Helena Williams says a reform is under way at the railroad. She says the crackdown includes ethics training and asking the Railroad Retirement Board to require secondary medical reviews.
LIRR officials also say that approvals are down 40 percent as the result of the reforms, which began in 2008.
For the full press conference on the LIRR pension fraud scheme, go to your digital cable box and select iO Extra on Ch. 612.