The retired New
York City police officers and firefighters showed up for their psychiatric
exams disheveled and disoriented, most following a nearly identical script.
They had been
coached on how to fail memory tests, feign panic attacks and, if they had
worked during the Sept. 11, 2001, terrorist attacks, to talk about their fear
of airplanes and entering skyscrapers, prosecutors said. And they were told to
make it clear they could not leave the house, much less find a job.
But their
Facebook pages told investigators a starkly different story, according to an
indictment and other court papers.
Former police
officers who had told government doctors they were too mentally scarred to
leave home had posted photographs of themselves fishing, riding motorcycles,
driving water scooters, flying helicopters and playing basketball.
“The brazenness
is shocking,” Cyrus R. Vance Jr., the Manhattan district attorney, said on
Tuesday.
The online
photos, along with intercepted phone calls and the testimony of undercover
officers, were evidence of what officials said was the largest fraud ever
perpetrated against the Social Security disability system, a scheme stretching
back to 1988 in which as many as 1,000 people — many of them officers and
firefighters already collecting pensions from the city — were suspected to have
bilked the federal government out of an estimated $400 million.
An indictment
unsealed on Monday by the Manhattan district attorney’s office charges 106
people, four of whom are accused of running the scheme. The group was headed by
Raymond Lavallee, 83, a Long Island lawyer who started his career as an agent
with the Federal Bureau of Investigation and once served as a senior Nassau
County prosecutor, court papers said.
Mr. Lavallee
worked most closely with two men: Thomas Hale, 89, a pension consultant who
investigators say filled out applications, and Joseph Minerva, 61, a former
police officer who works for the Detectives’ Endowment Association.
The organizers
received cash kickbacks of more than $28,000 from each applicant, money that
was taken from the recipients’ first check from the Social Security
Administration, prosecutors said.
Lawyers for all
four men denied the accusations.
Scores of former
police officers and firefighters were arrested on Tuesday and brought in
handcuffs to State Supreme Court in Manhattan, where they were arraigned before
Acting Justice Daniel Fitzgerald on charges of grand larceny. They are accused
of collecting between $30,000 and $50,000 a year.
Many of the 72
city police officers and eight firefighters named in the 205-count indictment
had blamed the Sept. 11 attacks for what they described as mental problems:
post-traumatic stress disorder, anxiety and severe depression.
“It’s a
particularly cynical part of the charged scheme that approximately half the
defendants falsely claimed that their psychiatric disabilities were caused by
the 9/11 attacks,” Mr. Vance said at a news conference.
Yet investigators
said the accused were living full lives and in many cases were holding jobs in
private security, construction and landscaping.
Several of the
defendants documented their activities on Facebook. The bail letter includes
photographs culled from the Internet that show one former officer riding a
water scooter and others working at jobs including helicopter pilot and martial
arts instructor. One is shown fishing off the coast of Costa Rica and another
sitting astride a motorcycle, while another appeared in a television news story
selling cannoli at the Feast of San Gennaro in Manhattan.
Prosecutors said
Joseph Esposito, 64, who retired from the Police Department in 1990, coached
the applicants to act symptomatic during exams conducted by psychiatrists for
the Social Security Administration.
In one secretly
recorded telephone conversation, Mr. Esposito told an applicant to misspell
words and miscalculate simple arithmetic, and to say that she kept the
television on at home “just to hear a voice in the house,” but to emphasize
that she kept changing channels because she could not focus.
“When you’re
talking to the guy, don’t look directly at him,” Mr. Esposito said, according
to a transcript of the conversation in the bail letter. “You know, pause for a
second. You’re just trying to show that, you know, you’re depressed. You, you
can’t, you, you don’t have any desire for anything, and if you can, you pretend
you have panic attacks.”
Mr. Vance said
one of the defendants, Louis Hurtado, had retired from the Police Department
with a disability pension after sustaining a neck injury and then opened and
taught at a martial arts studio. Yet he still applied for disability from the
Social Security Administration, saying he had post-traumatic stress disorder.
During the bail
hearing, Christopher Santora, an assistant district attorney, outlined how the
scheme worked. The defendants generally first contacted Mr. Esposito, who was
known in law enforcement circles for helping people secure disability benefits.
Mr. Esposito would take applicants to Mr. Hale and Mr. Minerva, who referred
them to one of two psychiatrists.
With Mr.
Esposito’s coaching, the applicants would go to the psychiatrists for a year to
build a false record of mental instability before applying for benefits.
Mr. Hale then
filled out the applications in cookie-cutter fashion, using the same phrases,
like, “I don’t have interest in anything,” and “I am up and down all night
long.”
The bail letter
traced the scheme’s origins to 1988 and estimated that the retirees collected
fraudulent disability awards, over time ranging from approximately $50,000 to
$500,000. All told, $21.4 million in disability benefits was paid to people
charged in the indictment. Among the others charged were correction officers, Nassau
and Suffolk County police officers and civilians.
Lawyers for the
men accused of organizing the scheme predicted they would prevail in court. Mr.
Lavallee’s lawyer, Raymond Perini, said “a decorated Korean War vet, F.B.I.
agent and prosecutor lost his 60-year reputation today and we are going to win
that back in the courtroom.”
Mr. Hale’s
lawyer, Joseph Conway, said that his client’s consulting business would prove
to be legitimate. Mr. Esposito’s lawyer, Brian Griffin, said his client denied
the accusations.
Mr. Griffin said
most of the people named in the indictment did have a disability of some kind,
noting prosecutors appear to be alleging that only the mental disabilities
underlying the federal Social Security applications were exaggerated.
Mr. Minerva’s
lawyer, Glenn Hardy, said his client had a legitimate job helping officers
obtain benefits and denied that Mr. Minerva had told applicants what to say.
Mr. Lavallee and
Mr. Hale were each released on $1 million bail, while Mr. Esposito posted $500,000
and Mr. Minerva put up $250,000.
The inquiry
started in 2008 when Social Security investigators noticed that two retired
police officers who had gun permits were also receiving payments for a mental
disability. That discovery led to a review of other applications handled by Mr.
Lavallee and a multiagency investigation.
Patrick P.
O’Carroll Jr., the inspector general for the Social Security Administration,
said more arrests were expected.
