Busted NYC Disability Fraud Ring Raked In $400 Million
Over 100 former New York City cops and firefighters have been charged in one of the largest Social Security disability scams in U.S. history, costing taxpayers an estimated $400 million.
Over half of the defendants allegedly scored disability payments by claiming to have suffered psychiatric injuries due to the September 11, 2001 terrorist attacks that killed 3,000 Americans.
The scheme, dating back to at least 1988, involved four facilitators coaching hundreds of disability applicants on how to bag taxpayer-funded Social Security disability benefits in exchange for kickbacks ranging from $20,000 to $50,000, reports the Wall Street Journal.
The four alleged ringleaders include NYPD union detective John Minerva, former chief of rackets bureau Raymond LaVallee, former NYPD officer Joseph Esposito, and one of LaVallee's underlings, Thomas Hale. All have pled not guilty.
"As a New Yorker, and as a U.S. citizen, I can only express disgust at the actions of the individuals involved in this scheme," said New York Police Commissioner Bill Bratton.
Authorities monitored online activities and found photos and evidence of the accused engaged in rigorous physical activities. Louis Hurtado, for example, scored $470,000 over 24 years by claiming neck injuries and psychological problems kept him from working. Authorities found instructional videos of Hurtado teaching karate as a 6th-degree black belt. Similarly, Richard Cosentino, who bagged $208,000 in taxpayer dollars, claimed after the terrorist attacks he was too depressed to go outside, but was featured in photos aboard a boat holding a swordfish he caught during a fishing trip. Others claiming disability were found in photos riding motorcycles and jet skis.
The New York bust is merely the latest fraud revelation in the exploding Social Security disability program. Last August, federal agents arrested dozens of people in a Puerto Rico fraud ring. Puerto Rico is considered a hotbed for disability fraud. In 2006, 36% of applicants were approved. By December 2010, 69% of Puerto Ricans who applied for disability received it. Over 33% of Puerto Rico residents on disability qualified by claiming they could not work because they suffered from "mood disorders."
The number of Americans receiving disability benefits has exploded in the last decade. In 2003, 7.6 million were on disability. In 2012, 10.9 million received a total $136.7 billion in taxpayer-funded benefits—a level of spending nearly twice as large as the food stamp program. When the costs of health care for disability workers are included, federal spending on disability swells to $260 billion.