A Long Island attorney charged as one of four masterminds in a $400 million disability scam has pleaded guilty in a deal that would get him a year in jail in return for his cooperation in the case, the Manhattan district attorney's office said.
Raymond LaVallee, 84, of Massapequa, pleaded guilty to fourth-degree conspiracy Friday and will have to make $2 million in restitution and fines, authorities said. LaVallee, once an FBI agent and chief of the Nassau district attorney's rackets bureau, had faced up to 25 years in prison on the top charge, first-degree larceny.
He and three other Nassau men had been indicted in a fraud and kickback scheme to coach retired police officers and firefighters on how to fake mental illnesses to collect Social Security payments, from avoiding eye contact to complaining about sleep problems, District Attorney Cyrus Vance had announced in January 2014.StoryDA: 4 LIers led FDNY, NYPD Social Security fraudSee alsoRead the indictmentSee also35 LIers named in scam
At the time, 102 beneficiaries were also indicted, but in the ongoing investigation, prosecutors said as many as 1,000 ineligible retirees fed upon the scam, getting an average of $30,000 to $50,000 a year as far back as 1988.
Disability applicants were referred to LaValle's law firm, which submitted the claims.
The scheme fell apart in 2008, when someone questioned how a retired police officer could be mentally fit to hold a pistol license and also qualify for mental disability benefits, officials said.
LaVallee was the last of the four main figures to plead, and his attorney, Ray Perini of Hauppauge, said the deal on the sentence reflects his client's lack of heavy involvement in the scam.
"At the end of the day, it was apparent that his law firm was processing all these things and he did not supervise people sufficiently," Perini said.
LaVallee was not coaching people on how to collect disability, he said. Over time, he did pick up on clues that something was amiss, but did not follow up, Perini said.
Sentencing won't be scheduled for another year, pending his cooperation, authorities said.
LaVallee will work with prosecutors and the Social Security Administration to pursue civil remedies against beneficiaries who were never indicted, Vance's office said. Authorities hope to wrest back more money this way.
So far, more than 100 applicants have pleaded guilty to felony charges and more than $24 million has been recovered, prosecutors said.
"It's time to put this behind him," Perini said, "and it is a terrible way to end a very successful career."