It seems like every day the TV or online news outlets report incidents of fraud, impacting every industry, governmental body and political office. The stories are incredible and many times the individuals involved have literally gotten away with their schemes for years. Fraudsters are all around us, in the stores we shop, the restaurants we frequent, and the companies where we work. They can even be the people to whom we entrust our safety, as in the case of a recent disability fraud investigation in New York.
First Wave of Arrests In Fraud Investigation
On January 7, 2014, CBS New York reported that 106 defendants were indicted on charges of grand larceny for participating in a scheme to defraud taxpayers to the tune of an estimated $400 million. Included among those charged were 72 former officers of the NYPD and eight firefighters.
Manhattan District Attorney Cyrus Vance stated that the accused were filing bogus claims of phony mental health problems, including job-related depression, so they could collect Social Security Disability (“SSDI”) payments in addition to their existing pensions. In a statement, Vance also detailed additional allegations.
- Many of the defendants lived lifestyles that clearly demonstrated contradictions to their SSDI applications.
- Some defendants contended that they suffered from Post-Traumatic Stress Disorder in the aftermath of the 9/11 attacks in NYC.
- Photos posted on social media sites showed the supposedly disabled individuals deep-sea fishing, jet skiing, and selling pastries at regional festivals.
- One defendant was teaching martial arts classes, while another was a helicopter pilot.
In response to the fraud investigation in New York, one defendant’s attorney defended his client’s actions. Keith O’Halloran, representing Douglas Hale, stated “My client has pled not guilty, and he looks forward to defending himself in court.”
Vance maintains that the four ringleaders provided tips on how to fraudulently describe mental health issues, which would make officers eligible for benefits and SSDI payments. They are accused of taking kickbacks for their coaching efforts and have been indicted with charges of grand larceny and conspiracy.
New Arrests Announced
The disability fraud investigation in New York continued February 25th when 28 new defendants were arrested for making fraudulent representations on applications to receive SSDI and pension benefits. Court records show that these individuals, also former police and fire department employees, were receiving $20,000 to $50,000 per year, and revealed a scheme of fraud continuing over several years.
The new defendants are each charged with criminal facilitation, as well as grand larceny.
Public Outcry
Taxpayers are infuriated by the claims.
- “It also annoys me because there’s people out there with real health conditions that are getting denied left and right,” said Demarys Vasquez of Harlem.
- Crown Heights resident Jermel Glover said “If they fooled the public by applying for Social Security and falsely using it when they’re not eligible for it, I think they should be locked up.”
In announcing the second set of charges, Vance stated that he would aggressively pursue the case and was dedicated to “ending a massive fraud against American taxpayers.”
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Veriti Consulting, LLC provides fraud and forensic accounting services to organizations across the U.S., and has experience in helping organizations mitigate fraud investigations. The firm is also a licensed private investigation agency. Learn more about our fraud investigation services by calling 855.232.4410 or contact us via email.
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