Eleven individuals were charged on May 3, 2012 for their participation in a fraud scheme in which hundreds of former Long Island Rail Road employees falsely claimed to have disabling injuries.  The Metropolitan Transit Authority, the parent agency of the LIRR, and the Railroad Retirement Board—the federal railroad agency that sometimes supplements disability pensions—have paid as much as $121 million to retired workers with contrived or exaggerated disabilities.  But the potential disability disbursements in the pipeline and not paid could be as much as $1 billion.

Criminal prosecutors of the U.S. Attorney General’s office in Manhattan may have clued in to the fact that nearly every career employee of the LIRR was applying for and being granted disability pay-outs—over three to four times the employee disability rate of the average railroad.  After investigations, the U.S. Attorney General’s office in conjunction with the FBI have targeted select employees who were receiving disability payments while also engaging in activities ranging from 140 rounds of golf in a nine-month period to a 400-mile bike tour around New York State.  An overwhelming number of the charged and suspected employees visited one of two doctors who were known among LIRR employees for providing unnecessary medical treatments and preparing falsified medical records in exchange for cash.  The U.S. Attorney General’s office of Manhattan has charged both doctors as well.

Now, all defendants face up to 20 years in prison if convicted.  For most, it seems their early retirement and receipt of excess payments have come to an end as they must face the possibility of spending the rest of their retirement behind bars.

The criminal prosecution by the U.S. Attorney General’s office has opened the door for the MTA and the Railroad Retirement Board to attempt to recoup the more than $121 million in damages already caused by the scheme.  A piggyback civil action on behalf of the MTA and the Railroad Retirement Board seems likely given the extremely large damage values.