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Crime Does Not Pay

State: NY


Feds Log 24th Guilty Plea in Long Island Rail Road Probe:


Federal prosecutors on Monday announced the 24th guilty plea in the continuing investigation of pension and disability fraud on the Long Island Rail Road (LIRR).


U.S. Attorney Preet Bharara said Steven Gagliano, 55, a railroad signalman, pleaded guilty to using a false disability claim to supplement his pension in what prosecutors say is a pervasive pattern of false disability claims filed with the U.S. Railroad Retirement Board (RRB) by retiring LIRR workers.


A unique LIRR contract allowed workers to retire at age 50 with reduced benefits if they and been employed by the railroad for at least 20 years. Workers who chose the early retirement option could receive roughly the equivalent of their base salary by filing disability claims as they neared retirement, Bharara said.


He said hundreds of railroad employees have exploited the overlap between the railroad's pension plan and the RRB disability program.


Between 2004 and 2008, Bharara said in a news release, only three doctors were responsible for approximately 86% of the disability claims submitted by LIRR retirees. Of these, one has died and one, Dr. Peter J. Ajemian, has pled guilty and admitted that he declared "large numbers of Long Island Railroad employees" to be disabled even though they were not disabled and could have continued working in their railroad jobs.


Ajemian was sentenced in May 2013 to eight years in prison.


Gagliano, of North Babylon, N.Y., pleaded guilty Monday to one count of conspiracy to commit mail fraud, wire fraud, and health care fraud, and one count of conspiracy to defraud the United States and the RRB.


He faces a maximum of 55 years in prison and has agreed to make restitution to the RRB in the amount of $242,467.


The news release is here.


Source: U.S. Attorney's Office

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