FBI arrests more in LIRR disability fraud

A file photo of the LIRR tracks near A file photo of the LIRR tracks near the Jay switching station on the west side of Jamaica train station. (Sept. 30, 2011) Photo Credit: Charles Eckert

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Federal authorities Wednesday filed disability fraud charges in federal court in Manhattan against 10 more Long Island Rail Road retirees and for a second time extended the deadlines for an amnesty program for others who admit to receiving phony disability pensions.

The new wave of complaints, bringing to 28 the number of LIRR retirees and others charged in a scheme worth as much as $1 billion, accused one retiree of pursuing a jujitsu black belt after his purported disability, two others of working as a firefighter and ironworker, and another of bragging to a neighbor that he was "scamming" the system.

The deadline for the amnesty program, which offers immunity from prosecution to those who confess and agree to stop receiving disability payments, was extended from Sept. 14 until Sept. 28. Applicants who wait until Oct. 26, extended from Oct. 15, can still sign up but will have to return half of the disability payments they have received.

As in July, when prosecutors first extended the deadline, officials used the new charges to push those who may have lied to take the amnesty.

"Make no mistake -- there is no deadline for concluding our investigation," said U.S. Attorney Preet Bharara. "We are both relentless and patient and will continue to aggressively investigate this widespread alleged fraud."

Prosecutors contend that hundreds of LIRR workers, with the help of corrupt doctors, made phony claims to the federal Railroad Retirement Board. Bharara has refused to reveal how many have signed up for the amnesty program.

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The 10 charged Wednesday included eight Long Islanders and two Floridians. One of them -- Steven DeStefano, 61, of Manorville, a former electrician -- pleaded guilty in a sealed proceeding last week. Officials said he is cooperating with the investigation. His lawyer did not return a call.

Long Islanders Christopher Parlante, 60, of Oyster Bay; Daniel Denis, 59, of East Rockaway; Frederick Catalano, 51, of Nesconset; Thomas Coscetta, 61, of Southold; William McAleavey, 61, of Bay Shore; Kevin Neville, 55, of Islip Terrace; and Michael Costanza, 59, of Merrick, identified as a North Merrick fire commissioner, were all released after brief court appearances.

Lawyers who commented said their clients were innocent, and some blamed the new raft of charges on informants. "Somebody is in trouble and is trying to get other people in trouble," said Joel Winograd, the lawyer for Denis.

With Alfonso A. Castillo

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