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Retired LIRR employees admit to disability fraud

Regina Walsh, a retired LIRR Employee, exits Manhattan

Regina Walsh, a retired LIRR Employee, exits Manhattan Federal Court. Walsh was one of ten people that were arrested by Federal agents in connection with a $300 million scheme to defraud the Long Island Rail Road on disability claims. (Oct. 27, 2011) Credit: Patrick McCarthy

Two retired LIRR employees admitted Monday they were part of what prosecutors contend was an extensive scheme to falsify disability claims, which officials estimate could have cost taxpayers $1 billion.

Testifying as witnesses for the prosecution in federal court in Manhattan, former LIRR benefits manager Regina Walsh, 65, of New Hyde Park, and retired conductor James Maher, 60, of Florida, said they exaggerated their disabilities and implicated two of the three defendants on trial facing charges they were key facilitators of the fraud.

Both Walsh and Maher said they pleaded guilty to charges stemming from their involvement in the case. Walsh, a 30-year LIRR veteran who retired in 2006, said she faces 6 to 12 months in prison when she is sentenced. Maher, who retired at age 50 in October 2003, said he faces up to 55 years. Walsh is testifying without a cooperation agreement; Maher said he has one. Both hope Judge Victor Marrero will give them a break when he eventually sentences them.

"I lied," Walsh said under questioning by Assistant U.S. Attorney Amy Friedlander about what she did to get a disability award from the federal Railroad Retirement Board around the time she retired. Walsh testified that she did so with the help of Dr. Peter J. Ajemian, a Rockville Centre orthopedist, and Marie Baran, who once worked for the board's office in Westbury until she retired in December 2006 and then started advising workers on filing for disability.

Baran, of East Meadow, is on trial with Dr. Peter J. Lesniewski, also an orthopedist, and former LIRR conductor and union president Joseph Rutigliano of Holtsville. Ajemian pleaded guilty in a separate trial earlier this year.

Under questioning by prosecutors, Walsh and Maher testified about a porous system of filing for disability, in which they were able to make exaggerated claims about occupational injuries that appeared to easily get approvals on the basis of applications that Baran and Rutigliano allegedly helped them complete. Walsh and Maher told of being examined by Ajemian, who they testified helped them make false disability claims.

"It was just common knowledge there," Walsh said about how to file for disability. Asked why she was testifying, she said she wanted to correct the wrong she had committed. "I know I lied and I am trying to make right," Walsh said when questioned by Friedlander.

According to Walsh, after Baran retired from the RRB, she helped her file the paperwork to make the disability claim to the board, a service for which she was paid $1,000 in cash.

"I think she knew the right words to use to get disability," Walsh said of Baran.

Walsh admitted that what she told Baran about her supposed ailments wasn't truthful and did nothing to correct the forms.

Maher said Rutigliano helped with his disability application and that Ajemian created a medical narrative with exaggerations used to get the disability award.

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