Former electrician gets probation in LIRR disability fraud case

Steven DeStefano, 63, leaves court in Manhattan Thursday,

Steven DeStefano, 63, leaves court in Manhattan Thursday, May 15, 2014. DeStefano, a former LIRR electrician from Manorville, was put on probation for 3 years and ordered to repay $183,107 in disability payments he lied to get from the federal Railroad Retirement Board. Photo Credit: Bryan Smith

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Steven DeStefano, a 63-year-old former Long Island Rail Road electrician from Manorville, became the 19th defendant to avoid prison for disability fraud when he was sentenced Thursday in a scandal that the government says permeated the LIRR.

DeStefano, who pleaded guilty in 2012 after he was caught and cooperated with prosecutors, was put on probation for three years and ordered to repay $183,107 in disability payments he received by lying to the federal Railroad Retirement Board.

"I want to take full responsibility," DeStefano told U.S. District Judge George Daniels in Manhattan. "I apologize to everyone involved and I'm very sorry this happened."

Of 33 doctors, consultants, and ex-workers charged in what the government says was a decadelong scam that involved hundreds of retirees, 28 have now been sentenced. No one who agreed to help prosecutors has received prison time.

DeStefano put in 1,100 hours of overtime, nearly doubling his salary, in his last year before retiring in November 2006, then claimed he was unable to do his job due to being shot in the knee in the 1990s and a degenerative arthritic condition.

In fact, he later admitted, he was still able to work, but decided to retire because of a dispute with the LIRR. In retirement, he got a $20,000 pension from the railroad and $33,700 in disability benefits annually.

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Daniels ordered DeStefano to pay 10 percent of his income a month toward his repayment. When a defense lawyer asked for a reduction to 5 percent because of family financial burdens, the judge said probation officials can reduce the rate if "appropriate."

DeStefano will continue to receive a pension from the Metropolitan Transportation Authority. He declined to comment while leaving court.

Federal guidelines called for him to serve 15 to 21 months in prison, but prosecutors said he gave "substantial assistance," including providing information on a consultant who helped with his phony disability form but who has never been charged.

DeStefano did not testify at either of two trials of other LIRR defendants, and a spokeswoman for U.S. Attorney Preet Bharara had no comment on why the consultant DeStefano implicated was never charged.

Bharara also has never commented on the status of dozens of other retirees his office once suggested were involved in the scandal but never prosecuted.

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