LIRR disability applications down nearly 50%
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The number of retiring Long Island Rail Road employees applying for disability benefits dropped nearly 50 percent last year from 2011 -- the year that federal prosecutors started going after former LIRR workers on fraud charges, federal statistics show.
According to U.S. Railroad Retirement Board figures, 90 LIRR retirees sought federal disability benefits in 2012 -- a 46 percent decline from 2011, when 167 people applied.
"Guys are terrified," said one LIRR union leader who declined to be identified. "When they started seeing guys go to prison, they said, 'It's not worth it.' "
While the numbers fell sharply in 2012, the majority of the 133 who retired still filed for disability annuities that could pay $30,000 or more annually.
"There were real problems in this system, and these new numbers give a strong indication that people who do not deserve disability benefits won't get them, and those that do will get the help they deserve," said Sen. Charles Schumer (D-N.Y.), who led the call in Washington for railroad disability reform.
The 167 applications in 2011 were just one fewer than in 2008, when the alarmingly high rate of LIRR retirees applying for and receiving disability benefits was first disclosed.
In 2008, the retirement board approved 98 percent of disability claims coming from retiring LIRR workers, figures show. The New York Times reported at the time that former LIRR employees -- including white-collar managers -- were paid nearly $250 million in federal occupational disability money since 2000. Some of the people receiving disability payments were healthy enough to play golf and do other strenuous forms of exercise, federal prosecutors contend.
The retirement board, an independent federal agency based in Chicago, administers retirement-survivor and unemployment-disability benefits for the nation's railroad workers. It also oversees Medicare programs for rail workers.
Disability benefit applications did drop by a third in 2009, following some measures to reduce fraudulent claims, including increased scrutiny from federal officials of LIRR applications.
The number of disability applications approved by the retirement board has declined from 178 in 2008 to 114 last year -- a drop of 36 percent. Through July of this year, the board approved 59 LIRR applications.
"At first, nobody really took it that serious," said the union leader. "What they were doing was absolutely ridiculous."
In 2011, federal prosecutors began arresting people who were allegedly part of a massive decadelong scheme to collect on hundreds of phony Long Island Rail Road disability claims worth millions of dollars.
To date, 28 defendants have been convicted or pleaded guilty to charges in the case. Two more former LIRR workers are currently standing trial in federal court in Manhattan on fraud charges. The LIRR has also said it will consider revoking the separate railroad pensions of any retiree charged with defrauding the federal disability system. Several unions represent LIRR workers.
The LIRR said in a statement that it is "hard to draw concrete conclusions from the raw data" on LIRR disability rates, in part because the number of retirements fluctuates each year and retirees don't necessarily apply for disability benefits in the same year they leave their jobs.
"The LIRR believes that federal disability benefits should be reserved for those who are truly disabled, and we have instituted significant actions internally to support that result," the railroad statement said.
A spokeswoman for the office of Manhattan U.S. Attorney Preet Bharara declined to comment on the most recent LIRR disability figures.
Nationally, 1,708 railroad workers applied for disability benefits last year, a decrease of about 25 percent from 2011.
Through August of this year, disability applications from LIRR employees were 171. But Retirement Board officials said that 133 of those came from former workers reapplying for benefits after having them terminated in July because they were examined by Dr. Peter Ajemian.
The Garden City doctor pleaded guilty in January to federal fraud charges for lying about retirees' medical conditions. About 600 LIRR retirees lost their disability benefits because of the decision.
The 133 LIRR retirements in 2012 are 29 percent fewer than in 2011, when there were 187, according to the railroad.