A Rockville Centre man and an East meadow woman, along with a man from Holtsville, were convicted yesterday in federal court for their roles in the massive LIRR disability fraud scheme.
Peter Lesniewski, 62, an orthopedist from Rockville Centre, was convicted on numerous counts of fraud for his role in the scheme and faces a maximum sentence of 165 years in prison. Marie Baran, 65, of East Meadow, worked as a disability consultant and helped LIRR clients maximize their chances of receiving disability benefits. She faces a maximum sentence of 150 years.
Also convicted was Joseph Rutigliano, of Holtsville, for his role as a disability consultant. He faces up to 115 years in prison.
“Dr. Lesniewski enabled hundreds of LIRR employees to dupe the government through medical paper trails filled with bogus diagnoses, while Baran and Rutigliano, in exchange for payments of thousands of dollars, helped lard the employees’ disability benefit applications with lies,” said Manhattan U.S. Attorney Preet Bharara in a release. “Lesniewski, Baran and Rutigliano served as engines of this fraud that led to a staggering 79 percent of LIRR retirees from 1998 to 2011 receiving federal disability benefits, costing the government hundreds of millions of dollars.”
According to Bharara’s office, the disability scheme exploited an overlap in benefits available to retirees from the LIRR and the Railroad Retirement Board (RRB). The former LIRR contract allowed employees with at least 20 years of service to retire at age 50. However, they would receive a much smaller pension than if they retired at 60. But if the LIRR workers retired and claimed disability, they would receive a disability payment from the RRB in addition to their LIRR pension, which in many cases would equal the salary earned during their career.
To facilitate this fraud, Lesniewski, a board-certified, orthopedist, would prepare fraudulent documentation to create a narrative of disability for his clients. These narratives, which were submitted to the RRB as proof of disability, were fabricated or grossly exaggerated. Lesniewski would receive between $850 and $1,000, often in cash, for the fraudulent assessments, as well as hundreds of thousands of dollars in health insurance payments for unnecessary medical tests.
Lesniewski is the second Rockville Centre doctor to be sentenced in the fraud scheme. In January, Peter J. Ajemian, an orthopedist with a practice in Rockville Centre, pled guilty to one count of conspiracy to commit mail fraud, wire fraud and health care fraud. He was sentenced to eight years in prison in May.
Baran worked to further pad the claims of LIRR employees as a “disability consultant.” She would fill out disability applications on behalf of LIRR employees to increase their chances of receiving benefits. She would charge $1,000 — in cash — for this. She hid this income she was receiving from her legitimate disability consultant employer.
Baran’s husband, himself an LIRR employee, receives RRB disability benefits based on an assessment performed by Lesniewski. Baran served as an RRB district manager in Westbury before her retirement in 2006, when she moved to disability consulting.
Lesniewski was convicted of one count of conspiracy to commit mail fraud, wire fraud and health care fraud; one count of conspiracy to defraud the RRB; two counts of health care fraud; two counts of mail fraud; and four counts of wire fraud. Baran was convicted of two counts of conspiracy to commit mail fraud, wire fraud and health care fraud; two counts of conspiracy to defraud the RRB; two counts of health care fraud; two counts of mail fraud; and two counts of wire fraud.
All three defendants will be sentenced by U.S. District Judge Victor Marrero on Dec. 13.