A Manhattan federal judge on Tuesday refused to resentence two doctors and a union official who were sent to prison for 8 years each in the Long Island Railroad disability scandal, ruling that the later validation of over 90 percent of allegedly phony claims didn’t affect the sentences.
U.S. District Judge Victor Marrero said federal guidelines he used to sentence Dr. Peter Lesniewski, Dr. Peter Ajemian and Joseph Rutigliano depended on the losses they intended to cause by lying — not actual losses suffered by the federal Railroad Retirement Board.
“Even if the full extent of the actual loss sustained during the course of fraudulent activities has not been realized, if the intended amount is greater, the intended loss must be considered when applying offense level enhancements,” Marrero wrote.
Manhattan U.S. Attorney Preet Bharara alleged in 2011 that LIRR retirees had made as much as $1 billion in phony claims. Lesniewski and Ajemian, the two doctors who vouched for the most claims, and Rutigliano, an ex-conductor who advised other workers, received the longest prison terms among 33 defendants convicted in the case.
The sentences were based on massive anticipated losses, but the retirement board later reviewed all claims supported by diagnoses from Lesniewski or Ajemian. It found 498 of 530 qualified under its lenient standard, which requires only inability to do any job task, not total disability.
Although those findings triggered requests for a new trial or a resentencing, the government has argued that the crime in the LIRR cases was a widespread practice of lying or exaggerating on applications to insure approval, even if truthful information would have qualified a person.
Ajemian’s lawyer could not be reached for comment Tuesday, but lawyers for Lesniewski and Rutigliano said they planned to appeal Marrero’s refusal to resentence, and his earlier denial of requests for new trials.
“We are extremely disappointed . . . and intend to pursue our appeal to the Second Circuit vigorously,” said Tom Durkin, Lesniewski’s attorney.
Rutigliano’s attorney, Joseph Ryan, complained that from the start prosecutors were permitted to create the misimpression that anyone able to walk and play golf should not have a disability, and the retirement board’s high rate of re-validation discredited that approach.
“The judge failed to recognize that the retirement board and its inspector general found that the loss, the disability was wrongly determined at trial,” Ryan said. “Both agreed you don’t have to be in a wheelchair to be eligible for disability, and that was the thrust of the government’s case.”
Ajemian, 67, is due to be released in 2020, and Lesniewski, 65, and Rutigliano, 69, are due to be released in 2021.
The eight-year sentences imposed by Marrero were less than the 10 years or more called for by federal sentencing guidelines based on massive “intended” losses ranging from $93 million to $210 million. But if the actual loss figures were used, Marrero said, guidelines would have called for less than a year for each man.
Although the judge refused to reconsider the term of imprisonment, he said his multimillion dollar orders of restitution were supposed to be based on actual losses, and may have been undercut by findings that so many claims were valid. He asked for further briefs.