NY rail retirees in disability scam lose benefits

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Associated Press

Posted on July 2, 2013 at 8:32 AM

Updated Tuesday, Jul 2 at 9:01 AM

MINEOLA, N.Y. (AP) — Nearly 600 retirees of a major New York commuter railroad are losing their disability benefits in the wake of a widespread scandal that has cost hundreds of millions of dollars and seen at least one physician sent to prison, a federal official said Tuesday.

The decision to cut off the benefits was made last week at a U.S. Railroad Retirement Board meeting in Chicago, said Martin Dickman, inspector general for the board. The action follows last month's sentencing of a physician who admitted inventing "narratives" to justify claims for hundreds of corrupt Long Island Rail Road workers trying to retire on disability for more than a decade.

The employees "were not in fact disabled and could have continued working in their railroad jobs," Dr. Peter Ajemian told a federal judge after pleading guilty this year. He was sentenced to eight years in prison.

Dickman recommended that any LIRR retiree who was treated by Ajemain lose his benefits. He said if any of the retirees are legitimately disabled "then they should reapply for benefits and the board should then perform a new review." He estimated that the retirees connected to the Ajemian case were collecting $2 million in benefits a month; he said some recipients were getting checks of $3,000 to $4,000 a month.

Ajemian was among 32 defendants arrested in the past two years amid a probe targeting the LIRR, one of the nation's largest commuter railroads, which serves Long Island and has 81 million riders a year. Two dozen have pleaded guilty and eight others are awaiting trial. The workers allegedly claimed on-the-job injuries, only to be spotted later playing golf and tennis, working out, and even riding in a 400-mile bike race.

The U.S. Railroad Retirement Board and the LIRR are separate organizations, and workers received disability payments from the former and pensions from the latter. Authorities have said they suspect that hundreds of other workers pulled similar stunts.

A LIRR spokesman said the railroad has cooperated with federal prosecutors and others from the outset of the investigation, which began in 2008. It applauded the action taken by the Retirement Board.

"The LIRR believes that federal disability benefits should be reserved for those who are truly disabled and we have moved aggressively against those retirees who have pled guilty by seeking reductions in their LIRR pension benefits," said a statement from the LIRR.

Dickman said a second doctor accused in the scheme faces trial this month. If he is convicted or pleads guilty, the inspector general said he intends to target those retirees who were treated by that physician as well.

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