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SSDI fraud indictment includes 9-11 responders

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(Bloomberg) — More than 100 retirees, most of whom worked for the New York City police and fire departments, were charged with stealing benefits from a federal disability program by lying about psychiatric conditions.

Manhattan District Attorney Cyrus Vance Jr. said today that an indictment was filed against 106 defendants, including 80 police and fire department retirees and four people accused of directing others to falsely seek disability payments. The indicted individuals received about $21.5 million in fraudulent benefits, prosecutors said.

Many of the defendants lied about having conditions such as post-traumatic stress disorder and depression from the terrorist attacks of Sept. 11, 2001, to obtain benefits from the Social Security Disability Insurance (SSDI) benefits program, Vance’s office said. The scheme may have involved as many as 1,000 applicants and $400 million in benefits, prosecutors said.

“For years, federal taxpayers unwittingly financed the lifestyles of the defendants charged today,” Vance said in a statement. Participants “cynically manufactured” mental illness claims, “dishonoring the first responders who did serve their city at the expense of their own health and safety,” he said.

From about January 1988 to December 2013, the four primary defendants helped hundreds of applicants falsely claim disabilities in order to collect disability payments in addition to public pensions, according to Vance’s office.

Failed tests

Two of the primary defendants helped coach applicants to falsely describe symptoms to doctors, fail memory tests and dress and act appropriately to feign mental illness, Vance said.

One of the primary defendants, Raymond Lavallee, 81, of Massapequa, N.Y., formerly served as an agent with the Federal Bureau of Investigation and head of the rackets bureau at the Nassau County District Attorney’s Office, Manhattan prosecutors said in a letter filed today with the court.

The four primary defendants are charged with grand larceny in the first and second degree, as well as attempted grand larceny in the second degree. Other defendants are charged with grand larceny in the second degree and attempted grand larceny in the second degree.

“This exploitation, combined with the fact that many of those indicted formerly held positions of public trust, make these crimes all the more egregious,” Edward J. Ryan, special agent-in-charge with the U.S. Social Security Administration, said in a statement.

New York City Police Commissioner William J. Bratton said the indicted department retirees “disgraced all first responders who perished during the search and rescue efforts on Sept. 11, 2001.”

A representative from Lavallee’s law office in Farmingdale, New York, didn’t have an immediate comment on the allegations.

The case is the People of the State of New York vs. Lavallee, 201-2014, New York State Supreme Court, New York County (Manhattan).

–Editors: Stephen Farr, Andrew Dunn

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