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February 10, 2014 Pension Fraud

Pension Scam in New York Results in Several Indictments Against Former NYPD Officers

As we have reported in the past, many states maintain legislation on the books to combat false claims for state money, akin to the False Claims Act, which combats false claims for federal money. With regard to healthcare fraud, these cases often invoke both federal and state laws as programs like Medicaid and Medicare are run by both state and federal agencies, using both state and federal tax dollars. In today’s case, we look at an example out of New York involving a decades-long disability scam, resulting in losses of nearly half a billion dollars in government funds. The cases involve several dozen former NYPD officers believed to have been fraudulently collecting federal Social Security benefits for exaggerated claims of post-traumatic stress disorder and other mental health issues. While the case does not directly involve allegations involving the False Claims Act, or a state equivalent, it serves as a good example of the type of conduct to watch out for and report.

Former Officers Caught Mocking the Social Security System

Early last month, the press released the identity of several of the officers found to be engaging in an unlawful pension and disability benefits scheme. According to the Chief of the Internal Affairs Bureau, approximately 72 former officers are accused of bilking the federal government out of disability benefits topping $400 million in taxpayer money. These officers are alleged to have learned special techniques for failing mental exams and feigning the symptoms of post-traumatic stress disorder. Several of the officers claimed they suffered mental health issues as a direct result of their involvement in the September 11th attacks on the World Trade Center. Each defendant received approximately $50,000 per year in benefits based on a finding of total disability by the Social Security Administration.

The investigation of the case revealed several disturbing pictures of “disabled” officers enjoying lavish vacations and costly recreational hobbies. In one picture, an officer dubbed too disabled to work is seen sitting atop a jet ski making obscene gestures to the camera. Others are seen flying a helicopter, playing softball, golfing, vacationing, and deep-sea fishing while receiving a monthly disability check.

New York’s Response

Understandably, authorities for the NYPD and the FDNY are outraged at the scam. James T. Hayes, Jr., special agent-in-charge of Homeland Security Investigations New York, stated:

“We will chase down every penny that these dishonorable thieves fraudulently pilfered so that the truly heroic firefighters, police officers, medics, and civilians who actually risked their lives on September 11, 2001, and are now suffering because of it, can get the care that they critically need….”

The Police Commissioner followed up by adding:

“As a New Yorker, as a U.S. citizen, I can only express disgust at the actions of these individuals involved in this scheme, particularly the 72 former members of the New York City Police Department who have certainly disgraced themselves, embarrassed their families, with their abuse of this system….The idea that many of them chose the events of 9/11 to claim as the basis of the disability brings further dishonor to themselves.”

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