11 charged in possible $1 billion rail pension probe

NEW YORK?? Eleven people, including two orthopedists and a former union official, are facing federal charges over an alleged $1 billion fraud in the pension system used by Long Island Rail Road employees, authorities said Thursday.

The criminal complaint says a retired engineering manager often played tennis and golf while collecting about $105,000 yearly in combined pension and disability payments.

LIRR President Helena Williams has said the federal agency acted as a rubber stamp without consulting the railroad.

In 2009, an investigative arm of Congress found that the system approved nearly 100 percent of claims filed by retired LIRR workers ? a higher rate than other commuter railroads.

A 2008 New York Times investigation prompted criminal investigations.

NBC New York reported that an orthopedist from Rockville Centre, Peter Ajemian, was among those charged.

It said he had been accused of helping 700 LIRR retirees get disability benefits from 1998 through 2008.

Peter Lesniewski, another orthopedist, allegedly helped more than 200 LIRR workers get benefits, NBC New York said.

Former union president Joseph Rutigliano and Marie Baran, who were also charged, worked as consultants to help workers "game" the system, officials told NBC New York.

LIRR workers Gregory Noone, Regina Walsh, Sharon Falloon, Gary Satin, Steven Gagliano and Richard Ehrlinger are accused of lying to get disability benefits.

Officials said 86 percent of all LIRR disability cases went through doctors Ajemian, Lesniewski and a third doctor who has since passed away. The doctors are accused of conducting unnecessary tests and grossly exaggerating conditions. Many of the worker were still doing their jobs when the disability findings that they were too sick or disabled to work were offered. The doctors were often paid $1200 in addition to thousands billed to insurance companies.

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Prosecutors said Lesniewski made more than $750,000 while disability payments to his patients have already totaled more than $31 million and could receive $64 million more. Dr. Ajemian made over $2 million and his patients have already collected $90 million with expectations they will get $210 million more.

Gregory Noone collects an annual combined retirement and disability pension of $105,000 every year. In 2008, investigators said the disabled Noone signed in to play golf at an area club on 140 different days.

Early morning arrests
The Times reported Thursday that the defendants faced a prison sentence of up to 20 years if they are found guilty.

The paper said the FBI arrested most of those charged in the early morning hours at their homes.

It added that the charges were expected to be announced at a news conference Thursday by Preet Bharara, the United States attorney in Manhattan, and Janice K. Fedarcyk, head of the New York FBI office.

The paper said that its previous articles reported that "virtually every career employee of the railroad was applying for and receiving disability payments, giving the Long Island Rail Road a disability rate of three to four times that of the average railroad."

The Times investigation also found that retired railroad workers played golf regularly at a state-owned course for free, another benefit of claiming disability.

Jonathan Deinst of NBC New York and The Associated Press contributed to this report.

Source: http://www.msnbc.msn.com/id/45061924/ns/us_news-crime_and_courts/

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