Derailed: Feds arrest, charge 11 in $1 billion LIRR disability scam

Federal authorities arrested 11 people, 10 of them Long Islanders, including a Rockville Centre doctor, last week and charged them with fraud for participating in a multimillion dollar Long Island Rail Road scam.

A criminal complaint unsealed in federal court in Manhattan on Oct. 27 accused orthopedist Peter Lesniewski, 60, and another physician of running "disability mills" that approved hundreds of false disability claims worth about $1 billion to the federal Railroad Retirement Board, which administers the benefits. A doctor's office manager, two facilitators — one a former LIRR union president and the other a one-time RRB official — and six LIRR retirees were also charged.

"The complaint … summarizes a bold and deceptive scheme involving a massive fraud," said Diego Rodriguez, the special agent in charge of the FBI's Criminal Division in New York. "One that played out for more than 10 years, culminated in the payout of over $300 million in fraudulently obtained annuity payments, and served as a game where everyone who played was a winner — until today."

The arrests followed a three-year probe into the high approval rate of disability pensions for retiring LIRR employees: according to the complaint, LIRR workers collected disability benefits at a rate 12 times higher than Metro-North workers.

The complaint charged that Lesniewski recommended 222 LIRR employees for disability benefits throughout the course of a decade, while Syosset orthopedist Peter Ajemian, 62 — with the help of his office manager, Maria Rusin — recommended some 839 railroad workers. A third unidentified doctor, recently deceased, also participated in the scheme, according to Manhattan U.S. Attorney Preet Bharara. In return for their participation, the LIRR workers paid the physicians between $800 and $1,200, often in cash: through the cash payments and billings to private insurers, Lesniewski collected about $750,000 and Ajemian collected $2.5 million. The 587 LIRR employees who received false paperwork from the two physicians have already collected $121 million in RRB disability benefit payments: they are slated to received more than $274 million in total.