80 From N.Y. Police and Fire Forces Are Charged in Social Security Fraud
By WILLIAM K. RASHBAUM and JAMES C. McKINLEY Jr.
Eighty retired New York City police officers and firefighters were charged on Tuesday in one of the largest Social Security disability frauds ever, a sprawling decades-long scheme in which false mental disability claims by as many as 1,000 people cost taxpayers hundreds of millions of dollars, according to court papers.
Scores of those charged in the case essentially stole in plain sight, according to a 205-count indictment and a bail letter, collecting between $30,000 and $50,000 a year based on fabricated claims that they were completely incapacitated by serious psychiatric disorders. Many said that their actions in response to the Sept. 11, 2001, terrorist attacks were responsible for their psychiatric conditions, such as post-traumatic stress disorder, anxiety or depression.
But their Facebook pages and other websites, according to the court papers, tell a starkly different story.
The bail letter includes photographs culled from the Internet that show one riding a jet ski and others working at jobs ranging from helicopter pilot to martial arts instructor. One is shown fishing off the coast of Costa Rica and another sitting astride a motorcycle, while another appeared in a television news story selling cannoli at the Feast of San Gennaro on Mulberry Street in Manhattan.
Indeed, prosecutors charge that they were coached by the scheme’s organizers to appear disheveled and disoriented during interviews, in which doctors initially evaluated their disability applications before finding them to be mentally disabled and incapable of any work whatsoever.
The indictment, brought by the office of the Manhattan district attorney, Cyrus R. Vance Jr., charges a total of 106 people, four of whom are accused of running the scheme. That group includes an 83-year-old lawyer who has worked as an F.B.I. agent and a prosecutor, an 89-year-old pension consultant and a 61-year-old official of the union that represents New York City police detectives, according to the bail letter.
Scores of those charged, including a number of the 72 retired officers and eight firefighters, were arrested early Tuesday morning and were scheduled to be arraigned on Tuesday in State Supreme Court in Manhattan before Acting Justice Daniel Fitzgerald.
"It’s a particularly cynical part of the charged scheme that approximately half the defendants falsely claimed that their psychiatric disabilities were caused by the 9/11 attacks,” Mr. Vance said at a news conference Tuesday afternoon. “This fraud not only forced taxpayers to finance the lifestyles of New York scammers but it also takes away from the already limited resources we have for people who actually suffer from psychiatric disabilities, and that includes of course the brave first responders who ran toward the fires on Sept. 11.”
Mr. Vance said one of the defendants, Louis Hurtado, had retired from the Police Department with a disability pension after suffering a neck injury, and then opened a martial arts studio. Yet he still applied for disability from the Social Security Administration, saying he suffered from post traumatic stress syndrome.
Another former officer, Glenn Lieberman, told government doctors he had panic attacks because of his experiences immediately following the terrorist attacks, and could not go outside. Nonetheless, his Facebook page revealed a picture of himself online cavorting on a jet ski.
“The brazenness was amazing,” Mr. Vance said.
The indictment accuses the four men it identifies as the scheme’s organizers of directing hundreds of applicants to the Social Security Disability Insurance program to lie about their psychiatric conditions and feign certain symptoms in order to obtain benefits to which they were not entitled. Those men — the lawyer, Raymond Lavallee; the pension consultant, Thomas Hale; the detectives’ union official, John Minerva; and Joseph Esposito, 64, a retired New York police officer who recruited many of the other defendants — were charged with first- and second-degree grand larceny and attempted second-degree grand larceny.
The other 102 people charged in the case, who all received Social Security disability insurance payments based on what the indictment alleges were false claims, were charged with second-degree grand larceny and second-degree attempted grand larceny.
Mr. Vance announced the charges at the news conference with officials from the United States Social Security Administration’s inspector general’s office, the Secret Service and Police Commissioner William J. Bratton.
Most of those charged were expected to be arrested in the New York City area, but many live in other parts of the country, according to a person briefed on the matter.
Joseph Conway, a lawyer for Mr. Hale, said that he and the lawyers representing Mr. Esposito and Mr. Lavallee, Brian Griffin and Raymond Perini, respectively, would not comment until after the arraignments.
Mr. Minerva’s lawyer, Glenn F. Hardy, said that his client was “a hard-working individual” who had never been arrested and was “leading an exemplary life.” He added, “He was working within the rules as he understood them.”
The 11-page bail letter, addressed to Justice Fitzgerald, traced the scheme’s origins to 1988, and estimated that the retirees collected fraudulent disability awards ranging from approximately $50,000 to $500,000.
“Based on evidence gathered by the SSA Inspector General and the Manhattan district attorney’s office, we estimate that over the 26 years of the charged scheme, fraudulent claims were filed with respect to as many as 1,000 individuals totaling as much as $400 million in benefits received,” according to the letter from the assistant district attorneys Bryan Serino and Christopher Santora.
One person with knowledge of the matter said that Mr. Lavallee had been handling Social Security disability claims since the 1970s, and that investigators believed the scheme may have begun well before 1988.
The letter said that the Social Security Administration had paid out a total of $21.4 million in benefits to the 102 people charged in the indictment.
Several people involved in the case said that it was likely that as many as 50 more people would be charged in the coming weeks with making fraudulent claims. Investigators and prosecutors were still collecting evidence, the people said, to determine how many others among the roughly 1,000 people who they believe made false claims can be charged.
Susan C. Beachy and Kitty Bennett contributed reporting.
This article has been revised to reflect the following correction:
Correction: January 7, 2014
An earlier version of this article misstated the amount of money that the Social Security Administration paid out in benefits to the people charged in the indictment. It is $21.4 million, not $2.5 million.
