CBC: LIRR Pension Fraud Could Happen Again

Long Island Rail Road pension fraud could happen again if the federal agency administrating disability pensions isn't vigilant enough, according to a New York budget watchdog.

"Lack of action by that agency, the Railroad Retirement Board, could cost MTA riders and taxpayers in coming years," Charles Brecher and Ashley Emerole wrote in a Aug. 5 commentary on the Citizens Budget Commission website. "Although the RRB has agreed to the recommendations, it remains to be seen whether they will be implemented or if they will be effective."

LIRR is a unit of New York's Metropolitan Transportation Authority.

The federal Government Accountability Office in late July issued a report accusing the RRB of not having done enough to prevent a repeat of a widespread fraud scheme by LIRR employees uncovered in 2008. Also late last month, the MTA proposed a fiscal 2015 budget and four-year capital plan that funds its tentative 6-1/2 year contract with LIRR unions.

The scheme involved as many as 1,500 retirees conspiring with several physicians to falsely claim disability payments to supplement their legitimate pension benefits under an RRB-administered program. Those found guilty have paid about $400 million in restitution and forfeiture. An additional 44 persons voluntarily revealed their involvement and agreed to terminate their RRB disability benefits.

"The Long Island Rail Road strongly believes disability benefits should be reserved for those who are truly disabled and we agree with the [GAO] that there is a need for major reform in how the federal government administers disability programs," MTA spokesman Aaron Donovan said in a statement. "While the LIRR has no involvement in the RRB's approval of disability benefits for retired employees, we share the GAO's concern over the continued mismanagement of the program."

According to Donovan, the LIRR has fully cooperated with federal and local authorities since the issue surfaced.