Dozens More Accused of Social Security Fraud
MANHATTAN (CN) - Topping off last month's indictment of 106 alleged participants in a scheme to fatten the Social Security benefits paid to retired New York City firefighters and police officers, prosecutors announced 32 new indictments Tuesday.
The four principal defendants from January - Raymond Lavallee, 83, Thomas Hale, 89, Joseph Esposito, 64, and John Minerva, 61 - are among the 32 now facing additional charges.
None of the 28 remaining new defendants were among last month's indicted. Esposito and Hale's sons are both among the new defendants. They are Saverio "Sam" Esposito, 48, and Douglas Hale, 53.
That juggernaut complaint had accused Lavallee, Thomas Hale, Joseph Esposito and Minerva of directing hundreds of NYPD and FDNY retirees to obtain Social Security Disability Insurance, or SSDI, benefits by lying about their psychiatric conditions. These SSDI payments were in addition to any public pensions the retirees already received.
Aside from the four main defendants, the remaining 102 defendants were all SSDI recipients. All were charged in January with grand larceny and attempted grand larceny.
The new indictments charge Lavallee, Hale, Esposito and Minerva with additional grand larceny charges plus conspiracy in the fourth degree.
New grand larceny charges, and fourth-degree criminal facilitation charges, also face the remaining 28 defendants.
Most of the defendants are residents of New York or New Jersey, but some hail from Florida, Pennsylvania, North Carolina, South Carolina and Wisconsin.
District Attorney Cyrus Vance had lamented back in January that the alleged fraudsters were "dishonoring" the Sept. 11, 2001, first responders by "cynically" claiming to have suffered a mental illness as a result of those terrorist attacks.
"This alleged scam further depleted the already limited resources available for battling the real and complex conditions of PTSD and depression," Vance had said in a statement at the time.
Individuals qualified as "disabled" receive an average annual SSDI payment of approximately $30,000 to $50,000 under U.S. Social Security law.
Prosecutors said Lavallee, Hale, Esposito and Minerva had been defrauding the system since January 1988.
Of those initially charged in January, 72 collect NYPD pensions, eight collect FDNY pensions, five collect pensions from the New York Department of Correction, and one collects from the Nassau County Police Department.
Esposito was retired from the NYPD and Minerva was a disability consultant for the Detectives' Endowment Association, the union that represents NYPD detectives.
Prosecutors said these men referred applicants to Lavallee, a former assistant prosecutor and chief of the Rackets Bureau in the Nassau County District Attorney's office, and Hale, an alleged key manager under Lavallee, to submit the SSDI applications.
The lying retirees had limited physical disabilities that legitimately entitled them to state disability pensions, but such physical conditions would not normally net SSDI, which requires a complete inability to work, according to the indictments.
Prosecutors said Hale and Esposito coached applicants on how to plausibly fail memory tests, as well as how to dress and to behave.
Though the applicants claimed after such coaching that they rarely left their homes, did not travel, and had almost no social interactions with family and friends, investigators found that they "were in fact driving, traveling by air, engaging in recreational sports, and lifting heavy objects."
"Several of the defendants also were gainfully employed, including at energy and investment companies, private security and private eye firms, construction and landscaping, and even baking," prosecutors said in a statement.
"In some particularly striking examples, one defendant piloted a helicopter, another played blackjack in Las Vegas, another worked at a cannoli stand at the San Gennaro Festival in Manhattan, another rode a jet ski, and one defendant taught and performed mixed martial arts. And, notwithstanding that most defendants claimed they could not use a computer, many had Facebook pages, Twitter handles, and YouTube channels."
Prosecutors said the successful applicants repaid Lavallee, Hale, Esposito and Minerva for the coaching by with kickbacks from their payments.
"These one-time cash payments were based on the applicants' monthly awards, and ranged from approximately $20,000 to $50,000," the office's statement reads.
Lavallee meanwhile allegedly received $6,000 in attorney's fees for each applicant directly from the government.
Prosecutors said "the average SSDI payment to date for charged defendants, which included retroactive lump sum payments, was approximately $210,000."
The new 28 defendants are all accused of fraudulently applying for and receiving SSDI benefits.
Prosecutors say 16 of this group collect NYPD pensions, four collect FDNY pensions, one collects pensions from both outfits, and one collects from the Department of Corrections.