11 charged in LIRR disability fraud case

U.S. prosecutors Thursday charged 11 people, including former Long Island Rail Road employees, with an alleged $1 billion fraud involving hundreds of railroad workers filing false disability claims.

The fraud reportedly also involved doctors, who assisted LIRR employees filing disability claims shortly before they retired. The move allowed those filing to claim disability pay on top of their retirement pension, prosecutors said. In filing the claims, the railway workers allegedly paid up to $1,200 to hire one of several disability doctors.

The U.S. attorney’s office in Manhattan said the scheme cost the RailroadRetirement Board more than $1 billion. The investigation developed after aseries of reports by The New York Times starting in 2008. The Times said that almost every longtime LIRR employee was receiving disability payments, resulting in a disability rate sharply higher than other regional passenger railroads, including sister railroad Metro-North.

Between 2004 and 2008, 61% of the 1,423 LIRR workers who retired and began receiving some form of Railroad Retirement Board benefits were between 50 and 55 years old, prosecutors said. By comparison, only 7% of 61 people who retired from the MTA-controlled Metro-North commuter railroad and started receiving benefits were between 50 and 55 years old during that period, prosecutors said.