Five current or former Long Island Rail Road employees pleaded not guilty Wednesday to an indictment charging them with fraud and conspiracy for covering up a scheme in which they illegally got tens of thousands of dollars in unearned overtime pay, according to officials.
U.S. District Judge Paul Engelmayer in Manhattan released each of the five on $100,000 bond, according to spokesmen for federal prosecutors in the Southern District.
In addition to the $100,000 bond, the five were required to surrender their passports, restrict their travel to the Southern and Eastern districts of New York, and have no contact with their co-defendants without the presence of their attorneys.
The defendants in the case are Thomas Caputo, 56, of Holbrook; Joseph Ruzzo, 56, of Levittown; John Nugent, 50, of Rocky Point; Joseph Balestra, 51, of Blue Point; and Frank Pizzonia, 53, of Howard Beach, Queens.
Balestra, Nugent and Pizzonia have been suspended without pay by the LIRR. Caputo and Ruzzo retired in 2019.
The indictment brought by Southern District prosecutors charged that the defendants "fraudulently overstated the number of hours that they had worked, and thereby each received … payments for hours that they did not in fact work."
A host of investigators, including federal and state prosecutors and the MTA inspector general, began looking into potential time and attendance fraud at the MTA after a 2019 report by the Empire Center for Public Policy revealed surprisingly high overtime rates among the agency’s top earners — particularly at the LIRR.
Caputo was the MTA’s top earner in 2019, making more than $344,000 in overtime, in addition to his $117,499 annual salary.
Acting Manhattan U.S. Attorney Audrey Strauss said in a statement that the defendants "made themselves some of the highest-paid employees at the entire MTA by claiming extraordinary, almost physically impossible amounts of overtime."
As part of the scheme, the indictment also alleged that the defendants "worked together" on the scheme, including by "repeatedly covering for one another’s absences from work while nonetheless understanding that time sheets including the unworked hours would be submitted."
If convicted, they each face a maximum sentence of 10 years in prison on the fraud charges.