More than 100 indictments were handed down on January 7 in a Manhattan courthouse relating to a disability fraud ring that received an estimated $21 million dollars in benefits from a federal disability program. In filing the indictments, Manhattan District Attorney Cyrus Vance stated that many of the retirees named had claimed posttraumatic stress disorder and depression relating to the terrorist attacks of September 11, 2001.
The accused include more than 72 retired city police officers, eight firefighters, four correctional officers, and a Nassau County police officer. Others are suspected of being involved as Vance suggests that hundreds of others may have filed false claims as well. Many ex-officers collected years of benefits for psychiatric disorders which supposedly left them unable to work. While many claimants had legitimate physical problems, they were often coached to magnify their symptoms to qualify for federal Social Security disability insurance.
In a statement released to the press, Vance reported that participants in the scheme "cynically manufactured" mental illness claims. “For years, federal taxpayers unwittingly financed the lifestyles of the defendants charged today,” he said in his statement and that the people involved dishonoured the legitimate first responders who did serve their city at the expense of their own health and safety.
From January 1998 to December 2013, the four ringleaders of the disability scheme earned tens of thousands of dollars in kickbacks by coaching claimants on how to falsely describe symptoms of depression and other mental disorders. One of the ringleaders, 81-year-old Raymond Lavallee is a former FBI agent and retired head of the rackets bureau at the Nassau County District Attorney's office. Lavallee and the other three primary dependents are charged with grand larceny in the first and second degree as well as attempted grand larceny in the second degree. Other people named in the indictments have been charged with attempted grand larceny in the second degree
Investigators found that many of the claimants who had filed disability claims often held jobs despite their claims of being completely disabled. Claimants often reported symptoms of depression, anxiety, and posttraumatic flashbacks whic made them unable to do any kind of work despite their holding down jobs. Many who denied being able to operate a computer had Facebook pages and Twitter handles and maintained an active online presence. With what Vance described as "shocking brazenness", claimants often made little effort at concealing their fraud despite some receiving hundreds of thousands of dollars in disability claims.
The indictments handed down by Vance are likely to take years to resolve. Arraignments have already begun for the dozens charged with several people already pleading guilty and being released without bail. Attorneys for the accused have already blamed the flawed disability claims system for many of the problems involved in requiring proof of complete disability before allowing claimants to receive compensation. The fact that many of the claimants also have legitimate injuries will probably complicate what is already proving to be a nightmarish case to resolve for the legal system and the federal agencies involved.