While announcing that eleven people were charged in a billion-dollar Long Island Rail Road disability pension scheme, the federal authorities said that this was just the beginning. According to Newsday, U.S. Attorney Preet Bharara "said his office would explore civil cases to recover money, as well as new criminal cases, and FBI Criminal Division of New York special agent Diego Rodriguez urged people who had been part of the fraud to come forward -- but declined to promise leniency": "Who has better information about this scheme...than those who perpetrated it? We look forward to hearing from you. For those who choose not to contact us, there's a good chance we'll be contacting you."

Prompted by a 2008 NY Times article that showed a ridiculously high number of LIRR employees retired early (in 2004, 97% of employees who retired after the age of 50, applied for and received disability) and got their full pre-retirement incomes paid out. The authorities allege that doctors, union leaders, and LIRR employees all worked in concert to run "disability mills," faking disability claims for employees so the Railroad Retirement Board would rubber stamp their claims: "LIRR workers collected disability benefits at a rate 12 times higher than Metro-North workers, it said, and all 869 of the workers between 50 and 55 who retired during a five-year period ending in 2008 got disability awards."

The examples of the egregious claims make for fun reading (see the complaint below). Here are some from the NY Times:

Another defendant, Regina Walsh, 63, a railroad office worker who lives in New Hyde Park, N.Y., collects $108,000 a year in pension and disability payments; she had complained of significant neck, shoulder and hand pain caused by sitting at a desk and using a computer, and leg pain caused by standing for more than five minutes. But surveillance showed her shoveling snow for over an hour and walking with a baby stroller for 40 minutes, the complaint said....

[Sharon] Falloon, who collected $90,349 annually in disability and pension payments, said she had a hard time climbing stairs, the complaint said. But surveillance video showed her taking a 45-minute step aerobics class at a gym. The video ran out after two hours, the complaint, but Ms. Falloon was still working out.

One of the doctors charged apparently got $2.2 million for okaying the claims of 453 patients, who "have collected $90 million and are in line to collect $210 million."

Complaint