MANHATTAN (CN) - Federal prosecutors today accused 11 people of conspiring in a massive scheme to defraud health care programs by helping Long Island Railroad workers on the verge of retirement falsely claim they are disabled, and occupationally disabled, to get benefits to which they were not entitled. Had the scheme succeeded, Uncle Sam says it would have netted more than $1 billion in undeserved payments.
The complaint states: "Specifically, LIRR employees who were eligible to retire as early as age 50 with an LIRR pension sought - through this widespread fraud - to supplement their LIRR pension with a separate RRB [Railroad Retirement Board] disability annuity which, when combined with their LIRR pension, resulted in a total income level that often approximated their pre-retirement, working income. This scheme was executed with the knowing assistance primarily of three doctors - two of whom are charged in this complaint and the other one of whom is recently deceased - who falsely declared disability on behalf of these retiring LIRR workers when in truth and in fact the workers were not disabled. This scheme was also aided by 'facilitators' who served as liaisons between the retiring workers and participating doctors. As a result of this fraudulent scheme, the doctors received millions of dollars in corrupt payments from patients and insurance companies. And based on my analysis of the data, including but not limited to the percentage of LIRR applicants handled by the three doctors discussed in this complaint and actual disability payouts to date, I further estimate that the fraudulent scheme could cause the RRB to pay unwarranted occupational disability benefits exceeding one billion dollars if disbursed in full."
The complaint/statement, unsealed today, is from Adam Suits, an agent with the U.S. Railroad Retirement Board Inspector General's Office of Investigations.
Suits says the conspiracy began in 1998 or earlier, and continued through this year.
Here are the defendants; all quotations are from the 74-page complaint:
Peter J. Ajemian, "a Board-certified orthopedist who has been assisting LIRR retirees apply for RRB occupational disability benefits since at least in or about 1998." He recommended "at least 734 LIRR employees for disability."
Peter J. Lesniewski, "a Board-certified orthopedist," who recommended "at least approximately 222 LIRR workers for disability benefits."
Maria Rusin, defendant Dr. Ajemian's office manager "in a succession of practices".
Marie Baran, an RRB district office manger in Westbury, N.Y., until she retired in late 2006, after which "she began working as a 'facilitator' who purported to advise and assist LIRR workers in planning their disability applications at the time of their retirement."
Joseph Rutigliano, "a former LIRR conductor and union president who applied for and received RRB occupational disability benefits after his retirement. After his retirement, Rutigliano also worked as a facilitator, like Baran".
Gregory Noone, Regina Walsh, Sharon Falloon, Gary Satin, Steven Gagliano, and Richard Ehrlinger, all "former LIRR employees who have retired on LIRR pensions. After they retirement, they each applied for and received RRB occupation disability benefits."
The complaint claims that 96.55 percent of Ajemian's LIRR employee-patients were declared disabled within 2 years of their first appointment with him, as were 97.5 percent of Lesniewski's LIRR employee-patients, also within 2 years.
Some of the information apparently was collected by "a colleague at the Ajemian practice" who wore "a consensual recording device."
Other nuggets from the lengthy document state: "The vast majority of Ajemian's patients were LIRR workers. Ajemian wrote approximately fifteen narratives a week for approximately $1,500 per narrative. Ajemian's LIRR patients were the only ones who received such lengthy, expensive narratives."
Lesniewski worked with Disability Doctor-3, who is dead. "Lesniewski's job was to work up the patient's medical file and prepare a narrative. He charged between $850 and $1,000 for the narrative.
"Facilitator-1 told Lesniewski how to write the narratives and what the RRB wanted to see on them. Lesniewski prepared incorrect narratives and disability documents with respect to approximately 25 percent to 30 percent of his LIRR patients.
"Lesniewski saw LIRR patients who had medical problems that were correctable by surgery. Many of those patients declined any treatment because all they wanted was to get the RRB disability. They were afraid that if their medical condition improved they would not get the disability ...
"Lesniewski knew that the LIRR patients were seeing him just to get their disability, and he believed the RRB would not approve their disability. He estimated that 50 percent were not in fact disabled."
Lesniewski allegedly got about 30 patients who were referred to him by Facilitator-1.
The complaint then specifically describes the alleged disabilities of the last six defendants, the former LIRR employees who got occupational disability benefits.
Suits swore to the 74-page affidavit before a U.S. magistrate judge on Wednesday, Oct. 26.
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