Former NY Police, Firefighters Accused in Disability Fraud
Authorities in New York have charged 106 people – many of them former police officers and firefighters – with perpetrating a $400 million fraud against the Social Security disability system.
Local, state and federal investigators said the scam began in January 1988 and proceeded under the guidance of four men: Raymond Lavallee, 83, a former FBI agent and prosecutor; Thomas Hale, 89; Joseph Esposito, 64, a retired New York Police Department (NYPD) officer; and John Minerva, 61, a disability consultant for the union that represents NYPD detectives.
Each man is charged with 102 counts of felony grand larceny and one count of felony attempted grand larceny, the New York County District Attorney’s Office announced in January 2014. Almost all of the other defendants face charges of felony grand larceny and misdemeanor attempted grand larceny.
Investigators said the four ringleaders “directed and assisted” hundreds of disability applicants in falsely claiming mental disabilities in order to collect Social Security Disability Insurance (SSDI). Many received unwarranted payments in addition to their department pensions. Many of the applicants also used their experiences during and after the Sept. 11, 2001, terrorist attacks as a pretense for claiming they suffered from post-traumatic stress disorder, depression and anxiety, according to prosecutors.
Hale and Esposito are accused of instructing applicants on ways to defeat memory tests, and on how to dress and act during visits to doctors. In exchange, the applicants provided the ringleaders with financial kickbacks once their applications were approved, authorities said.
The applicants were paid between $2,000 and $5,000 in fraudulent benefits each month, averaging a total of about $200,000 in bogus benefit payments, prosecutors said.
Authorities acknowledged that many of the defendants had some physical disabilities that entitled them to limited disability payments; however, none of the claimants was entitled to SSDI, which requires a complete inability to work. In addition, none of the defendants had a history of mental illness prior to their applications for SSDI.
In their SSDI applications, many of the defendants claimed they were unable to leave their homes, didn’t interact with friends or family and did not travel. In reality, the defendants were traveling the world, engaging in sports or working full-time jobs, investigators said.
One of the accused, Louis Hurtado, 60, a former police officer in Queens, N.Y., taught mixed martial arts in Trinity, Florida. The New York Post reported that Hurtado is accused of receiving more than $470,000 in bogus disability payments over 26 years, the most money over the longest period of anyone charged.
Some of the scheme’s ringleaders had large amounts of cash at the time of their arrests, the Post also reported. According to the paper, Esposito had $650,000 in a safe-deposit box and $62,000 at his home, Minerva had $325,000 in a safe-deposit box and $60,000 at home, and Hale had $51,000 at his home.