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Fraudulence in Federal Funding

Thursday October 27th, 2011   •   Posted by Stephanie Freedman at 2:09pm PDT   •  

© Marek Niezabitowski |

The larger the federal government umbrella is, the more susceptible it is to fraud. Recent fraud cases within the Long Island Rail Road prove this to be true. The New York Times reports this morning:

Eleven people, including two doctors and a former union president, were charged on Thursday in a “massive fraud scheme” in which hundreds of Long Island Rail Road workers made false disability pension claims that could have cost a federal pension agency about $1 billion, according to court papers.

All were charged with mail fraud and conspiracy to commit health care fraud, according to a criminal complaint filed in the case.

The waste on taxpayer funds in this example is staggering:

The doctors were paid — often in cash — between $800 to $1,200 for each phony assessment and narrative, in addition to the millions of dollars in health insurance payments they received for unnecessary medical treatments and fees for preparing false medical records to support the disability claims, the complaint said.

Gregory Noone, who receives $105,000 in pension and disability payments each year, plays tennis several times a week and played golf more than 100 times in less than a year despite supposedly suffering severe pain when gripping objects with his hands, bending or crouching, the complaint said.

Another defendant, Regina Walsh, an office worker for the railroad, who collects $108,000 a year in pension and disability payments and complained of significant neck, shoulder, hand and leg pain when standing for more than five minutes, was seen under surveillance shoveling heavy snow and walking with a stroller for a long period of time, the complaint said.

And a third defendant, Steven Gagliano, who receives more than $75,000 in payments annually and claimed to be suffering from severe and disabling back pain, went on a 400-mile bike tour around New York State, the complaint said.

Who would have thought federal fraud was so lucrative. We pay into the system, while there are people out there looking to abuse it. It makes one ponder “how many schemes like this are out there wasting taxpayer money?”

Read Full Article Here

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October 2011