More than 100 busted in one of the largest Social Security disability-fraud cases in U.S. history.
More than 100 people, including 72 former New York City police officers and eight former firefighters, were charged Tuesday in one of the largest Social Security disability-fraud cases in U.S. history, which authorities said cost taxpayers as much as $400 million over two decades.
The plot,
allegedly under way since at least 1988, involved four facilitators who
helped coach hundreds of applicants on how to convince the Social
Security Administration that they were entitled to monthly disability
payments because they were unable to work at any job due to psychiatric
conditions, said Manhattan District Attorney
Cyrus Vance Jr.
About half of the defendants "falsely
claimed" that their psychiatric injuries were caused as a result of the
Sept. 11, 2001, terrorist attacks, Mr. Vance said at a news conference.
The
arrests are the latest in a wave of crackdowns as investigators seek to
tackle fraud in the Social Security Disability Insurance program, which
has grown rapidly in recent years. In August, federal and local
authorities arrested more than 70 people in Puerto Rico on charges
related to disability fraud. A separate criminal investigation is under
way into the possible relationship between a West Virginia Social
Security judge and a disability lawyer in Kentucky.
Investigators
have been targeting people who they allege should not have qualified
for benefits, as well as some lawyers, doctors and others who profited
from the arrangements. The scope of the alleged scheme wasn't clear,
though authorities warned it eventually could include hundreds more.
Mr.
Vance said the four people who oversaw the scheme included attorney
Raymond Lavallee,
83 years old, and
Thomas Hale,
89, who worked as a manager under him. The others—
Joseph Esposito,
64, and
John Minerva,
61—are former NYPD officers who helped to recruit the other 102
defendants. All four pleaded not guilty at their arraignment |
| Glenn Lieberman |
Mr. Lavallee and the three others "coached
the applicants on how to describe the symptoms of depression and anxiety
during the application process," Mr. Vance said. "Specifically they
instructed them on how to intentionally fail memory tests, how to dress
when they presented themselves and how to present their demeanor."
Authorities
said they began catching on to the scam around 2008, when investigators
began noticing that nearly all of applications had the same handwriting
and contained boilerplate descriptions of their ailments.
When
applications were granted, the four managers received cash kickbacks
ranging between $20,000 and $50,000 in return for their help in
submitting the paperwork in each case, Mr. Vance said.
The
men are charged with filing fraudulent applications. The group includes
72 retired NYPD officers, eight retired FDNY firefighters, five former
corrections officers and a former police officer from Nassau County.
Mr.
Minerva currently is employed by the Detectives' Endowment Association,
the NYPD detectives union, as a disability consultant. Mr. Lavallee
once served as the chief of the rackets bureau at the Nassau County
District Attorney's office.
According
to prosecutors, authorities used wiretaps and monitored Internet
activity as part of the investigation, finding that those who claimed
severe disabilities were leading active lives despite assertions that
they were "unable to perform basic life skills like cooking for
themselves, grooming themselves, paying bills and socializing."
"Many
said they could no longer drive or be out of the house for more than a
short walk around the block," Mr. Vance said. "The investigation
revealed lifestyles that were very different."
Screenshots
of websites included in the indictment show defendants riding
motorcycles and
Jet Skis,
and one who was running a martial-arts school, going as far as
setting his movements to music and uploading them on YouTube.
Prosecutors
showed another in which defendant
Richard Cosentino,
49, a former NYPD sergeant who allegedly claimed ailments,
including an inability to socialize or leave the house, was seen on a
boat holding a large marlin he reeled in during a fishing trip.
Most defendants were arraigned Tuesday before Justice
Daniel Fitzgerald
in Manhattan Criminal Court. All pleaded not guilty and were released on their own recognizance.
