The Long Island Rail Road is notorious for several reasons: constant delays; late-night battle royales
; and, apparently, a shit ton of fraudulent pension claims.
You might remember this: last October, eleven people
connected to the LIRR were arrested as part of a widespread "fraud scheme." While it included not only retired workers, but consultants and pension administrators too, the charges were clear: through a shared network of trust, ex-employees were cashing in on false disability problems and, like any good embezzler, spending the money on more appropriate activities, like golf or biking.
Now, seven months later, a federal prosecutor announced yesterday that another ten people
are being brought to court on similar charges. And it seems as if there's many more arrests to come in a scheme that has left the federal government high, dry and out a $1 billion.
In 2008, The New York Times
wrote a scathing feature
on the LIRR's growing "disability epidemic" that brought up suspicions of a system in which 90 percent of workers who filed for disability monies were receiving payments. The federal Railroad Retirement System was alarmed by the investigation and decided to look deeper into the problem; thus leading to the initial arrests in October.
The story revolves around two shady orthopedists: Peter J. Ajemian of Syosset and Peter J. Lesniewski of Rockville Centre. Together, the duo ran what are known as "disability mills," which are very similar to the clinics in California where a simple claim of 'anxiety' leaves you with tons of medical marijuana. Except these mills are ten times more illegal and weed is not the end result.
Retired LIRR workers would go to Ajemian and Lesniewski for the whole nine yards of embezzlement: unneeded tests, a completely made up narrative and a disability application that was wildly exaggerated. This is where the shared network of trust comes in: the two orthopedists were known in the inner circles of the LIRR community as the go-to sources to get a fat disability check in the mail.
When it was mentioned before that more arrests are sure to come, here's why: the complaint that led to the arrests cites over 550 people that were patients of these two unprofessionals - a number that constitutes 86 percent of the total money lost. With only 21 people arrested so far, it's evident that this is an exploding mini-Ponzi scheme that the federal officials are just now unfolding. And, for many insiders at the love/hate LIRR, it could end real ugly.