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New York City’s Disability Grifters: One of the biggest disability-benefits frauds ever.
National Review ^ | 01/08/2014 | Jillian Kay Melchor

Posted on 01/08/2014 7:20:11 AM PST by SeekAndFind

More than a hundred people were indicted today for fraudulently obtaining Social Security disability benefits, constituting one of the biggest such fraud busts of all time.

At a news conference in Manhattan Tuesday afternoon, federal and local officials described a 26-year-old scheme through which 102 people — including 72 New York City Police retirees and eight retired New York firefighters — allegedly collected Social Security Disability Insurance (SSDI) fraudulently. A number of the 102 indicted have already been arrested.

Manhattan district attorney Cyrus R. Vance Jr. said at the news conference that about half of the participants fraudulently claimed they had suffered a mental disability as a result of September 11.

James T. Hayes Jr., the special-agent-in-charge of Homeland Security Investigations in New York, said in a news release, “Many of the individuals arrested today are alleged to have crafted an insidious scheme to profit off the tragedy of the worst terrorist attack in our nation’s history, one that affected all New Yorkers so very personally.”

The Social Security Administration paid out about $21.5 million in benefits to the defendants indicted today, according to the indictment filed Tuesday. On average, the defendants collected $210,000 in SSDI payments, according to the indictment. Eventually up to 1,000 indictments, the NYPD says, could be coming.

SSDI is supposed to be given only to those whose physical or mental ailments are so severe that they are incapable of performing any work whatsoever. Yet according to the indictment, some of those accused of fraud held jobs even as they collected Social Security disability payments; for example, one allegedly worked as a mixed-martial-arts instructor, and another piloted helicopters.

Photos and other evidence presented by the District Attorney’s office appeared to show defendants engaging in rigorous activities, including riding a motorcycle, training for a marathon, golfing, riding a jetski, and hauling in an enormous catch while deep-sea fishing.

The bust centers around four principal defendants: Raymond Lavallee, a disability attorney who once served as a Nassau County prosecutor and head of the county’s rackets bureau; Thomas Hale, a disability consultant who allegedly oversaw the scheme; John Minerva, a former cop and detectives’-union disability consultant; and Joseph Esposito, a retired New York City police officer.

The defendants seeking to fraudulently obtain disability benefits would first contact Esposito, “who is known within the law enforcement community as someone able to assist individuals in obtaining SSDI benefits in addition to their NYPD, FDNY or other retirement benefits,” the indictment says.

Esposito often advised those seeking disability that they would need to cite a psychiatric justification, “which they were instructed, could be created based on the events that occurred while they had worked, most often upon the September 11, 2001, terrorist attacks,” according to the indictment.

Esposito or Minerva would allegedly introduce those seeking disability to Hale, who, along with Lavallee, would file the SSDI application on their behalf.

Before filing that application, Hale and Esposito would arrange for the claimants to meet with designated psychiatrists or psychologists “to build a record of treatment for a psychiatric condition which would warrant an award of SSDI benefits,” according to the indictment, which noted that many of the applications followed distinctive patterns and “almost always listed the same diagnostic conclusions.” Many of the applications include identical phrasing and the same handwriting, which investigators say they have identified as Hale’s.

Before disability claimants met with SSA reps, Esposito would allegedly coach applicants on how to fake symptoms, appear properly disheveled, and fail concentration tests.

The court documents excerpted a phone conversation from January 2013 between Esposito and one applicant in which he told her how to answer the SSA’s examiners. Esposito said that if they asked her to “spell the word ‘world,’ so you go ‘W-R-L-D.’ Then they’re gonna say ‘Spell it backwards.’ You think about it, and you can’t spell it backwards.” He further instructed her to “put your head down now and then, don’t answer right away. You know, pause for a second. You’re just trying to show that, you know, you’re depressed. . . . And if [you] can, you pretend you have panic attacks?”

Once a claimant was awarded disability, the SSA would pay Lavallee $6,000 for legal representation. Those who had succeeded in receiving disability were allegedly expected to give a cash kickback to Lavallee, Hale, Esposito, and Minerva.

Esposito even allegedly instructed them on how to withdraw cash without triggering alerts for suspicious activity. The district attorney’s office has estimated that the four men running the scheme together received between $20,000 and $50,000 in cash payments for each person they helped fraudulently receive disability.

Once defendants aged into Social Security retirement benefits and were no longer eligible for disability payments, they would quit getting psychiatric care, “suggesting the medical claims had been bogus,” the indictment says.

New York City police commissioner William Bratton said at the news conference that the investigation is not yet complete, and “it is likely that more arrests will come in the coming months.”

— Jillian Kay Melchior is a Thomas L. Rhodes Fellow for the Franklin Center for Government and Public Integrity.


TOPICS: Crime/Corruption; Culture/Society; News/Current Events; US: New York
KEYWORDS: disability; fraud; nyc; psychiatryisfake

Richard Cosentino is accused of receiving more than $200,000 in fraudulent disability payments.
1 posted on 01/08/2014 7:20:11 AM PST by SeekAndFind
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To: SeekAndFind

It is just not in NYC. It is replete throughout the entire country.

They don’t put those Cochran Firm “we can get your denied disability claims fixed for you” ads on TV for nothing.

Biggest scam there is.

Together with SSI, SSDI accounts for 25% of all Social Security disbursements. (SSI is not an SSA funded entitlement, but it is managed by SSA).


2 posted on 01/08/2014 7:26:56 AM PST by Gaffer
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To: SeekAndFind
I was always amazed at this scam.
You KNOW that if those cheats were THAT good at cheating, they were smart enough to earn money legally.
One can be INDECENTLY rich legally. It's the stupids or the born-with-the-hand-out-lazies who are the problem. It's my read that the latter folks were TAUGHT to take and take only...born and bred with an entitlement attitude.
3 posted on 01/08/2014 7:28:55 AM PST by cloudmountain (.)
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To: SeekAndFind
After stealing numerous Social Security numbers and deriving benefits from them, he won the Presidency Lotto...


4 posted on 01/08/2014 7:29:01 AM PST by Slyfox (We want our pre-existing HEALTH INSURANCE back!)
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To: SeekAndFind

SSDI is very difficult to apply for and one usually needs legal assistance to get a SSA determination of SSDI eligibility.

Its far easier to qualify for and collect SSI because the eligibility standards are far looser.

There are people who fraudulently obtain Social Security benefits and that’s a felony. The vast majority of SSDI beneficiaries do meet the SSA determination.


5 posted on 01/08/2014 7:31:00 AM PST by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives In My Heart Forever)
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To: Gaffer

There are people who are legitimately disabled. They can be denied benefits on the first application. Usually Social Security will send applicants to a doctor at their expense to determine whether a disability classification should be granted.

You have be incapable of doing any kind of normal gainful work to qualify. And obviously, this is where it can get subjective.


6 posted on 01/08/2014 7:34:28 AM PST by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives In My Heart Forever)
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To: goldstategop

We all know here there are legitimately disabled people on it so it’s just a distraction really in discussing fraud. No one is talking about you or your relative, whatever.

The overarching point is there has been a steady increase in SSDI over the years, especially under Obama, and it is NOT due to legitimate disability.


7 posted on 01/08/2014 7:46:06 AM PST by Gaffer
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To: Gaffer

My sister-in-law works for a charity and interviews these people all the time. She says, in our area, the biggest scam is “bipolar disorder”.

Whole families not working because of it. They even have thirty year old children living at home and can’t work because of “bipolar disorder”.


8 posted on 01/08/2014 7:49:08 AM PST by Ruy Dias de Bivar (Sometimes you need 7+ more ammo. LOTS MORE.)
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To: Ruy Dias de Bivar

We could make them officially ‘bi-polar’.

Make every one of them take a job for 6 months in Antarctica
and at the North Pole weather stations for 6 months.

Then, I’d say they were ‘bi-polar’.

These people are all coached by lawyers and their retained scam doctors, IMO.


9 posted on 01/08/2014 7:52:51 AM PST by Gaffer
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To: SeekAndFind

dishonest people are everywhere… when you have no conscience you have no shame


10 posted on 01/08/2014 8:33:00 AM PST by Nifster
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To: Gaffer; goldstategop


The important question is this -- Why the SUDDEN SURGE IN SSDI Applications?

How many of these are LEGITIMATELY disabled, and how many are on SSDI simply because they have run out their unemployment insurance?
11 posted on 01/08/2014 8:59:00 AM PST by SeekAndFind
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To: Nifster
dishonest people are everywhere… when you have no conscience you have no shame


Why the sudden surge in SSDI applications compared to previous years? Are we to believe that suddenly, millions of people became disabled? If so, what's the cause?
12 posted on 01/08/2014 9:01:02 AM PST by SeekAndFind
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To: SeekAndFind

The surge is because so many of the people in between UIC expiration, unemployed, not able to qualify for some entitlements because of too much personal wealth (assets, savings, etc.) are simply to young to even hit the minimum SS age of 62. The only thing left is SSDI, which they seek often and aggressively. They don’t want to have to go back to work at 50-55 and wait for age 62-66


13 posted on 01/08/2014 9:07:15 AM PST by Gaffer
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To: Gaffer

RE: The only thing left is SSDI, which they seek often and aggressively.

The ‘D’ in SSDI is DISABILITY. Are these people really DISABLED?

If not, why the heck are we even considering their applications?


14 posted on 01/08/2014 9:08:46 AM PST by SeekAndFind
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To: SeekAndFind

Cut off everyone, and make them re-apply with strict controls.


15 posted on 01/08/2014 9:29:24 AM PST by petercooper ("I was for letting people keep their health insurance, before I wasn't". --- Barack Obama)
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To: petercooper

The city’s finest. Heroes all...no?


16 posted on 01/08/2014 10:22:18 AM PST by hal ogen (First Amendment or Reeducation Camp?)
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To: SeekAndFind

surely that is a rhetorical question…. if not then you merely need to look around at the moral decay around you. that is the answer to your question


17 posted on 01/08/2014 11:02:01 AM PST by Nifster
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To: SeekAndFind

D = Democrat


18 posted on 01/08/2014 12:29:07 PM PST by Organic Panic
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To: SeekAndFind

What did these guys do to get on the wrong side of the Democrats? This is the kind of behavior typically winked at.

It’s not some crusading right winger who is after them.


19 posted on 01/08/2014 12:35:11 PM PST by nascarnation (I'm hiring Jack Palladino to investigate Baraq's golf scores.)
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To: hal ogen

You can bet they took bribes, made false charges while on duty as police. All their cases would have to be looked into.


20 posted on 01/08/2014 12:42:44 PM PST by minnesota_bound
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To: SeekAndFind
This chart is telling:

Notice the climb during the early 1970s recession. Then, strangely, a decline starts in 1978 and continues through the Reagan recovery of the 1980s.

There is a ramp up associated with the early 1990s, which declines briefly in the mid-1990s during the tech boom, but still increases.

There is ramp up in the early 2000s recession, followed by a slight decline during the mid 2000s recovery, but still not a decline.

Then there is a dramatic ramp up in the Obama economic depression.

I don't need a PhD in economics, or a supercomputer to do a regression analysis to see the obvious correlation of negative macroeconomic conditions and positive SSDI/SSI applications and recipients.

Think about it. We have nearly tripled the ration of disability recipients to workers in the last 45 years. Add to that the dramatic increase in Social Security and Medicare recipients due to the aging population, the dramatic growth of non-defense government workers, and the dramatic growth of other entitlements (SNAP, TANF, WIC, Extended UEI, Medicaid, and now Obamacare subsidies).

We are going to reach the point where every person working paying for one government worker or non-working beneficiary, and also subsidizing one non-taxpaying low-income worker who receives payment in kind government benefits.

The deficit exploded under the first year of Obama, but declined as TARP and Stimulus ran their course. But it is being set up to explode again. And unlike TARP and Stimulus, these programs do not end.

21 posted on 01/26/2014 7:43:16 AM PST by magellan
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