Ex-LIRR boss asks judge to show leniency for Regina Walsh in disability fraud

A former president of the Long Island Rail Road who headed the agency while phony disability claims spiraled has asked a judge to show leniency to an ex-worker convicted of disability fraud.

James Dermody, who served as the LIRR acting president and president from 2003 until 2006, made the plea to Manhattan U.S. District Judge Victor Marrero, who is scheduled to sentence former LIRR director of employee services Regina Walsh Friday.

Dermody said he spent 48 years at the LIRR, and worked with Walsh for "over 20 years" on human resources matters, praising her assistance to other workers and willingness to volunteer during service disruptions.

"I know that Regina made a mistake, for which she is deeply sorry and regrets," wrote Dermody, who did not remark on any LIRR blame for the disability scandal. "I believe that one mistake, as serious as it is, should be taken in the context of all the good Regina has done."

Walsh, 65, of New Hyde Park, is one of 33 ex-workers, doctors and consultants charged and convicted of participating in a decadelong conspiracy by hundreds of LIRR retirees to submit phony disability claims to the federal Railroad Retirement Board.

After pleading guilty in January, she testified as a government witness at two trials of her former accused co-conspirators, and she will be the first cooperating witness to be sentenced.

She faces 6 months to 12 months in prison under federal sentencing guidelines, but defense lawyer Paul Bergman has filed 65 letters from supporters including Dermody, other former co-workers, family, friends and clergy in a bid for probation.

Bergman said that the relatively small amount of Walsh's fraudulent disability payments -- $56,364, all paid back -- combined with good works over a lifetime and her willing agreement to cooperate and testify merited a departure from the guidelines.

"The agreement was reached, in major part, out of Mrs. Walsh's very keen sense that her conduct was a serious moral, as well as legal, breach of her sense of herself," wrote Bergman, who also noted that many alleged participants in the LIRR fraud have escaped prison through an amnesty program, or have never been prosecuted at all by U.S. Attorney Preet Bharara.

Walsh will be the fifth person sentenced in the case. Two retirees who made fraudulent claims received 20 months and 30 months. Dr. Peter Ajemian, who admitted vouching for scores of phony claims, got 8 years in prison, and an office manager was sentenced to probation.

Prosecutors did not take a position on Walsh's sentence, but said in a letter to Marrero that she provided "credible" testimony and "meaningful" assistance that should be considered in her sentence.