Auditor: LIRR employees timed retirement for later months

Regina Walsh, a retired LIRR Employee, exits Manhattan

Regina Walsh, a retired LIRR Employee, exits Manhattan Federal Court. Walsh was one of ten people that were arrested by Federal agents in connection with a $300 million scheme to defraud the Long Island Rail Road on disability claims. (Oct. 27, 2011) (Credit: Patrick McCarthy)

More than 90 percent of Long Island Rail Road retirees who claimed they were unable to work because of a disability timed their retirement for the last seven months of the year after a special pension perk kicked in, a Metropolitan Transportation Authority auditor testified in federal court in Manhattan yesterday.

Robert Murray, appearing at the first trial stemming from the LIRR disability fraud scandal, said LIRR retirees could get a buyout bonus for five weeks of vacation for the year after retirement if they worked 100 days or more in the year they retired -- but it was surprising that so many disability claims would occur after the trigger date.

"When you have a health issue, that could occur at any time during the year," said Murray, testifying for the prosecution. "Theoretically, it should occur during any month."


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Accused disability doctor Peter Lesniewski of Rockville Centre and consultants Marie Baran of East Meadow and Joseph Rutigliano of Holtsville are charged in the case with being part of a massive, decadelong conspiracy to file phony disability claims for LIRR workers with the federal Railroad Retirement Board. Twenty-five people already have pleaded guilty.

Prosecutors, who have already gotten 25 guilty pleas in the case, contend that evidence of preplanning for early retirement to coincide with a disability claim is evidence many of the injuries were concocted.

Murray said that from 1998 to 2011, only 9.5 percent of the LIRR retirees claiming disabilities left between January and May. But after the 100-day benchmark was reached, 90.5 percent retired between June and December, qualifying them for a buyout including five extra weeks of vacation the following year.

That made sense for people planning to retire, he said, but, "For disability retirees, I'm not sure I would expect it."

The trial is in its second week. Several LIRR retirees who pleaded guilty have testified Lesniewski, while appearing to offer treatment, padded their medical files, and have said Baran, a former retirement board manager, and Rutigliano, a former union official, helped them fill out false applications. The defendants say they were misled by applicants.

In other testimonies Tuesday, two of Baran's former clients attested that for $1,200 cash she made up claims that pain made it "hard" for them to perform tasks like walking, sitting or standing for extended periods, and doing chores -- sometimes using identical language.

"We were relying on her to put down whatever needed to be put down to get a disability," said former LIRR electrician Michael Stavola of Farmingdale.

Another witness, John Chirichella of East Northport, Baran's tax preparer, testified he got an "urgent" call from Baran in 2008, shortly after the FBI visited her and seized her computer from a union office. She told him she wanted to "restate" her 2007 consulting income, from $14,400 to more than $67,000.

"I was shocked," Chirichella said.

Baran and her co-defendants are charged with conspiracy and fraud, not tax violations. But prosecutors say tax underreporting shows her state of mind.

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