In a one of the largest schemes in MTA history, people were arrested on Thursday and brought up on federal charges in which hundreds of the Long Island Rail Road workers made false disability claims costing an estimated $1 billion.
Seven of the people arrested and charged in this case were former railroad workers, who made the false pension disability claims. Two doctors and a railroad pension employee who were also in on the scheme were arrested. They were taken into custody by F.B.I. agents and state investigators early Thursday morning. They are expected to be arraigned in United States District Court in Manhattan later today.
These charges come at a bad time for union employees. Public workers unions have under criticism the last several weeks for placing undue burdens on government agencies and taxpayers because of their pension obligations. In 2009, Congress found that the LIRR disability pension system approved nearly 100 percent of claims filed by retired workers. This rate is dramatically higher commuter railroads in the United States. The railroad's retirement rate is even strikingly higher when compared to Metro-North, another subsidiary of the MTA, especially since Metro-North has a similar work force size and composition.
The United States attorney in Manhattan, Preet Bhara, who had recently announced charges of a gun running scheme by the NYPD, and the head of the F.B.I. office in New York, Janice K. Fedarcyk, are expected to announce the charges later today. Two inspectors general, Barry L. Kluger of the Metropolitan Transportation Authority and Martin J. Dickman from the Retirement Board will also be at the announcement. Their departments assisted in the investigation.
The New York Times first made investigations on this story in 2008 when they discovered several abuses by the Railroad Retirement Board. The Times also found that retired employees who were able to successfully claim disability and receive a pension were playing golf on a state-owned course free of charge, another perk for their disability pension. In fact, it was reported by the New York Times that one of railroad employees received disability payments by claiming he was unable to hold anything in his hands. He was caught playing the game several dozen times.
Long Island Rail Road President, Helena Williams, was displeased with the way the investigating agencies handled the case because they had not consulted the railroad.