January 13, 2014


Nab 72 Retired Cops, 8 Ex-Firefighters In Social Security Scam

Claimed Psych Disabilities To Gain Extra Benefits; DEA Consultant Involved


Manhattan District Attorney Cyrus R. Vance Jr. announced an indictment Jan. 7 of 106 people, mostly police and fire retirees, on charges of lying about their psychiatric conditions in order to obtain Federal benefits to which they weren’t entitled.

Mr. Vance said the scheme was masterminded by four men, including an official of the Detectives Endowment Association and a former Nassau County prosecutor, who coached the retirees on what to say to qualify for Social Security Disability Insurance.

Only the Stories Were Lame

The retirees told examiners that they could not perform basic activities of daily living, including “cooking for themselves, grooming themselves, paying bills and socializing,” Mr. Vance said. “Many said they could no longer drive or be out of the house for more than a short walk around the block.” In fact, he said, some engaged in activities including construction work, travel and mixed martial arts.

More than half of those requesting SSDI said their ailments were 9/11-related, he said. Many had legitimate injuries that entitled them to disability pensions, but they invented or exaggerated psychological disabilities to get more money, he continued.

“This fraud not only forced Federal taxpayers to finance the lifestyles of New York scammers, it also took away from the already-limited resources we have for people who actually suffer from psychiatric disabilities,” Mr. Vance said. “And that includes, of course, the brave first-responders who ran toward the fire on Sept. 11 and who now suffer from post-traumatic stress disorder, depression, anxiety and other serious—but very real—psychiatric disabilities.”

Bratton: They’re Disgraced

Police Commissioner William J. Bratton echoed Mr. Vance’s distaste. “I can only express disgust at the actions of the individuals involved in this scheme, particularly the 72 former members of the New York City Police Department, who have certainly disgraced themselves and embarrassed their families...The idea that many of them chose the events of 9/11 to claim as a basis for their disability brings further dishonor to themselves.”

Patrick J. Lynch, president of the Patrolmen’s Benevolent Association, sounded a note of caution. “While we do not condone anyone filing false claims,” he said in a statement, “we caution everyone to recognize that there are serious psychological illnesses resulting from the devastating work performed by first-responders following the attack on the World Trade Center and in performing the dangerous and difficult work of police officers.”

To qualify for SSDI, recipients must show that they cannot perform any job available to them. The average annual payment is $30,000 to $50,000, Mr. Vance’s office said. Edward Ryan of the Social Security Administration’s Inspector General’s Office said the fraud cost the Social Security Trust Fund $23.2 million—just for the 102 retirees indicted so far. Mr. Vance said the investigation is continuing.

The Gang of Four

Prosecutors said each of the retirees paid the four alleged ringleaders $20,000 to $50,000. Court papers identified the four as:

• Raymond Lavallee, 83, a former Chief of the Nassau County District Attorney’s Rackets Bureau, who was allegedly in charge of the operation. Prosecutors said he was paid $6,000 in government funds as an attorney’s fee for each successful claim.

• John Minerva, 61, a disability consultant for the DEA, who was accused of obtaining doctors to provide diagnoses that would justify SSDI benefits. The DEA suspended Mr. Minerva without pay after his indictment, then terminated him, said Michael J. Palladino, the union president.

• Thomas Hale, 89, a pension consultant who allegedly coached retirees on how to pretend they were suffering from depression and anxiety.

• Joseph Esposito, 70, who prosecutors said also helped coach the retirees on how to pretend to psychiatric problems. He retired from the NYPD on a three-quarter disability pension in 1990, after 17 years on the job, citing two line-of-duty car accidents, according to court papers, and began receiving SSDI benefits the following year based on “mood disorders.” He and his family have received nearly $450,000 in SSDI benefits since then, prosecutors said.

Taught to Act Nuts

An announcement from Mr. Vance’s office said Mr. Hale and Mr. Esposito “instructed applicants on how to fail memory tests with plausibility, how to dress, and on their demeanor. Almost every application included identical description of the applicants’ activities of daily living, such as ‘I nap on and off during the day,’ ‘I have the TV on to keep me company,’ ‘I was a healthy, active, productive person,’ ‘My [family member] is always after me about my grooming,’ ‘I’m unable to perform any type of work activity in or out of the house.’’’

The announcement continued: “While collecting their cash benefits, many of the applicants lived lifestyles that starkly contradicted the representations made on their applications. For example, defendants often claimed that they rarely left their homes, did not travel, and had almost no social interactions with family and friends.

“But, according to court papers, applicants were in fact driving, traveling by air, engaging in recreational sports, and lifting heavy objects,. Several of the defendants also were gainfully employed, including at energy and investment companies, private security and private-eye firms, construction and landscaping, and even baking.”

Piloted Jet Ski, Chopper

The statement continued, “In some particularly striking examples, one defendant piloted a helicopter, another played blackjack in Las Vegas, another worked at a cannoli stand at the San Gennaro Festival in Manhattan, another rode a jet ski, and one defendant taught and performed mixed martial arts.”

Officials said the investigation began in 2008, partly because document analysis showed that a large number of the SSDI recipients had gun permits. That meant they would have had to swear they were psychologically sound to obtain them.

Those indicted include 72 retired NYPD officers, eight retired city firefighters, five retired city correction officers and one retired Nassau police officer, Mr. Vance said.

The four alleged ringleaders were charged with grand larceny in the first and second degrees and attempted grand larceny in the second degree. The remaining defendants were charged with grand larceny in the second degree and attempted grand larceny in the second degree.

First-degree grand larceny is punishable with a minimum prison sentence of 1 to 3 years and a maximum sentence of 81/3 to 25 years. In the second degree, there is no minimum term and the maximum term is 5 to 15 years. For attempted second-degree grand larceny, the maximum term is 7 years.