Railroad Workers Charged $1 Billion for Disability Fraud

by PLK Law Firm on November 7, 2011

U.S. prosecutors have charged eleven people for their connections with an expensive fraud scheme involving hundreds of railroad workers filing fraudulent disability claims. The scam allegedly cost the Railroad Retirement Board over $1 billion. The charges are coinciding with heavy criticism that is aimed at public workers’ unions for negotiating pension obligations that led many government agencies to slash services and lay off police offers, teachers, and other public servants.

The Railroad Retirement board is a government agency that administers retirement benefits to railroad workers across the country. Retirees who qualify for disability receive a boost to their benefits because their pension is topped off with additional disability payments. The allegations here are that former Long Island Railroad workers, doctors, and at least one federal railroad agency employee were involved in the scheme. The workers allegedly filed disability claims just before retirement in order to obtain additional benefits. According to the prosecution, many of the employees claimed injuries so severe they could not sit, stand, walk, or climb steps, yet managed to retire to lives of regular golf, tennis, biking, and aerobics. For example, one of the defendants received $105,000 in annual pension and disability benefits after establishing an inability to grip, bend or crouch. He then played golf 140 days over the course of nine months.

The investigation began after the New York Times issued several reports in 2008 about Long Island Railroad workers, including their reports that those workers had a 90% disability rating, approximately four times that of the average railroad. The reports tipped off federal investigators about the systematic abuses of Railroad Retirement Board pensions by workers.

The workers are accused of paying up to $1,200 to hire one of several disability doctors. According to the prosecution, those doctors conducted unnecessary tests and fabricated medical issues that allowed the workers to qualify for disability. Each defendant (doctors, workers, agency employee) faces a maximum of twenty years in prison, if convicted.

Because of the heavy labor involved with railroad employment, it is often difficult to dispute a meritless claim for disability or workers’ compensation benefits without a thorough investigation. The Long Island Railroad case is an unfortunate example of how expensive misappropriation of benefits can become. If you employ railroad workers or analyze these claims, Peterson, Logren & Kilbury highly recommends you seek the advice of an attorney knowledgeable in defending such claims. Such advice can help you efficiently resolve questionable claims and allow you to focus your resources on the bona fide ones.

(Via NYTimes.)

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Social Media as Evidence IV: Recommendations

by PLK Law Firm on March 21, 2011

(This is part of a 4-post series. Start from the beginning here.)

Based on the previously posted cases and statute, you might be able to obtain and review information shared by an individual through social media sites or programs. While the law continues to develop in this area, the two most common trends in current law are as follows:

  • There is generally no recognized right to privacy in social media postings.
  • An individual given permission to view someone else’s online postings can, in turn, extend that permission to other persons.

Using this knowledge, a party can learn more information about its opponent and strengthen its case even further. Our firm can work with you to utilize this method while investigating claims. In doing so, we will help you observe a claimant’s online presence and assist you in determining which information, communicated by a claimant, you own and can review.

For assistance in structuring human resources policies relating to online communication, please contact Peterson, Logren & Kilbury, P.A.

Social Media as Evidence III: The Stored Communications Act

March 1, 2011

(This is part of a 4-post series. Start from the beginning here.) The Stored Communications Act prohibits access of stored information owned by another without the owner’s authorization. The Act has an important exception, however:  any person or people who subscribes to those communications or to whom the communication is made can authorize access. If [...]

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Social Media as Evidence II: Case Law

February 21, 2011

(This is part of a 4-post series. Read the first post here.) Right to Privacy in Social Media:  Is There Any? So far, case law generally says No. The reasoning behind this is that social media, by nature, involves the sharing and disclosure of information. Courts take that into consideration and also note that if [...]

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Social Media as Evidence

February 15, 2011

Social media use has exploded in the last few years. A substantial amount of people in the United States access social media websites daily. Facebook alone has over 500 million active users. The evolution of these sites now allows users to publish information about their every day lives by posting comments, pictures, links, writing messages, [...]

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Are They Independent Contractors or Employees?

December 27, 2010

A recent Minnesota Court of Appeals case offers a new guide for employers regarding the difference between independent contractors and employees. In July, the Court clarified the distinction between employee and independent contractor in St. Croix Sensory v. Dept. of Employment & Economic Dev. The case involved a company hiring assessors to perform odor evaluations [...]

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