Two federal appeals judges on Monday expressed concern about whether the high rate of re-approvals of allegedly fraudulent Long Island Rail Road disability pensions undercut the government’s criminal convictions as three imprisoned defendants sought review of their cases.
“There is something disquieting about the fact that in the end such a large number of the claimants turned out to get disability benefits,” 2nd U.S. Circuit Court of Appeals Judge Reena Raggi told a prosecutor. “Is it your position that a . . . court hearing a criminal appeal should just be unconcerned?”
Judge Susan Carney, another panel member, said she was “troubled” by the pattern during argument on appeals from ex-union leader Joseph Rutigliano, and Peter Ajemian and Peter Lesniewski, both doctors who were convicted of leading a massive scam to claim bogus LIRR disabilities.
Prosecutors relied at trial in part on statistics showing LIRR disabilities were approved at a rate of 79 percent compared to 21 percent at Metro-North as proof of a massive fraud, and used that statistic to compute high loss estimates from the fraud that hiked sentences. All three men are serving 8-year prison terms.
But the government’s claims later were called into question when the federal Railroad Retirement Board, after terminating hundreds of disability pensions that relied on diagnoses by Lesniewski and Ajemian, later recertified 498 out of 530 based on exams by new doctors.
“I am optimistic,” Joseph Ryan, the lawyer for Rutigliano, said after the hearing. “Judge Raggi’s comment that it was disquieting that most of these applications were reapproved gives us hope that justice will be served.”
The same arguments, however, were rejected by U.S. District Judge Victor Marrero, the trial judge, and despite their reservations, appeals judges Raggi, Carney and Judge Denny Chin spent most of Monday’s hearing poking holes in the defense claims.
Echoing prosecutor Daniel Tehrani, the appeals judges said even if claimants actually turned out be disabled, it was a crime to exaggerate symptoms or lie on applications — which Lesniewski admitted to law enforcement agents.
“There was lots of false evidence,” Chin said.
Tehrani also argued that recertifications by the federal retirement board came years after the original applications were approved, so they didn’t prove that workers were disabled when they first applied. He said it was “possible” that fraud was still occurring in the recertifications.
Altogether, 33 defendants were convicted on charges related to the LIRR disability scandal. The 2nd Circuit previously rejected appeals by Lesniewski and Rutigliano, but they began a new bid for relief based on the retirement board findings.
Ajemian, 68, who pleaded guilty, is scheduled to be released in 2020. Lesniewski, 66, and Rutigliano, 70, both convicted at trial, are scheduled for release in 2021. The judges reserved decision.