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Amnesty extended in LIRR disability fraud case

Customers walk by an LIRR train at Penn

Customers walk by an LIRR train at Penn Station. (Jan. 23, 2012) Credit: Craig Ruttle

Federal prosecutors investigating a massive Long Island Rail Road disability fraud on Friday extended the sign-up deadline on an immunity deal to hundreds of other potential defendants if they turn themselves in.

The office of U.S. Attorney Preet Bharara, which also charged a 22nd defendant in the alleged scheme to collect hundreds of millions in phony disability benefits, said the extension was necessary "in light of continuing inquiries" to give retirees "sufficient time to make an informed decision."

The two-month extension on the immunity runs until Sept. 14.

"We strongly encourage any LIRR retiree who lied to get disability benefits to come forward . . . while they still have the chance," Bharara said in a statement.

The amnesty plan, announced in May, allows retirees who admit to lying about a disability to escape criminal prosecution and keep both their LIRR pension and at least some disability benefits they have already received from the federal Railroad Retirement Board, in return for giving up any future disability payments.

The defendant charged Friday with conspiracy and fraud was Donald Alevas, 53, of Patchogue, the LIRR's former director of shop equipment, engineering and environmental compliance.

Prosecutors alleged that months before he retired at age 50 in 2008 with annual disability payments of $33,000 for hearing, back and neck problems -- on top of a $55,000 LIRR pension -- Alevas wrote emails discussing a plan for timing a disability claim to coincide with his early retirement date.

The criminal complaint also said Alevas plotted with Dr. Peter Ajemian of Syosset, charged in October, to fabricate medical notes from an exam that never took place, and claimed that he was in good health in applications for private disability insurance at the same time he was planning his federal disability claim.

Alevas was released on bail without entering a plea after an appearance in federal court in Manhattan. His lawyer, Bob del Grasso, said he had no comment.

Prosecutors say as many as 1,500 LIRR retirees are suspected of lying to get benefits. Bharara's office refused to disclose how many people have taken the amnesty offer, but defense lawyers for some former workers who have been charged said it appears the program has fallen short of expectations.

"The only thing to take away is that it hasn't gone quite along the lines they expected it to," said Paul Bergman, the lawyer for ex-worker Regina Walsh.Prosecutors first charged two doctors and nine others with participating in the fraud scheme last October, and accused 10 more former LIRR workers in May. They allege that the doctors OKd disabilities for more than 90 percent of the LIRR workers they saw, and recipients were later seen shoveling snow, working out and taking bike tours.

They said the amnesty program was needed to deal with the high volume of fraud, and achieve quick savings for the federal board. Recipients who signed up by July 6 would get to keep all their past benefits, and those who waited until the final deadline of Aug. 10 would have to forfeit half. That final deadline was delayed Friday until Oct. 15.

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