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80 NYPD and FDNY Retirees Indicted in 106-Defendant SSDI Fraud Indictment

One hundred and six defendants -- including at least 80 retired officers from the New York City Police Department, New York City Fire Department, and New York Department of Corrections -- were indicted January 7, 2014, charged with participating in a massive fraud scheme involving Social Security Disability Insurance (SSDI) benefits.

New York County District Attorney Cyrus R. Vance, Jr., said that the fraud scheme involved tens of millions of dollars being paid out to the defendants, who were coached to fake psychiatric distress and other conditions to obtain SSDI benefits as completely disabled persons.

Four principle defendants were charged with one count of Grand Larceny in the First Degree, a Class B felony under New York law, 101 counts of Grand Larceny in the Second Degree, a Class C offense, and one count of Attempted Grand Larceny, a Class D offense.   Raymond Lavallee, 83, Thomas Hale, 89, Joseph Esposito, 64, and John Minerva, 61, were the alleged ringleaders of the scheme.  The remaining defendants were charged with Grand Larceny in the Second Degree and other crimes.

Seventy-two of the indicted were NYPD officers; 8 were FDNY firefighters; 5 worked for the New York Department of Corrections, and one was a Nassau County Police Department Officer.

According to a press release, the scheme was headed by Lavallee, a Long Island attorney and former Nassau County prosecutor who started his career as an FBI agent.   Lavallee worked closely with Hale, a pension consultant, and Minerva, a former police officer who works for the Detectives Endowment Association.  Former NYPD officer Esposito and Minerva are accused of being the primary recruiters for the scheme, and along with Hale, coached applicants on how to fake Post-Traumatic Stress Disorder (PTSD) and other illnesses.   While many of the NYPD and FDNY applicants had limited physical disabilities, they applied for SSDI payments as completely disabled persons unable to work.

Scores of former police officers and firefighters were arrested and brought in handcuffs to New York Supreme Court, charged with collecting between $30,000 and $50,000 a year.  Some defendants collected retroactive payments as high as $100,000.  Cash kickbacks of more than $28,000 were collected from the applicants by the four principles.

The scheme was alleged to date back to 1988, and included many civil servants who claimed disabilities arising from the September 11, 2001 terrorist attack.  NYPD Commissioner William J. Bratton said, "The retired members of the NYPD indicted in this case have disgraced all first responders who perished during search and rescue efforts on [9/11], and those who subsequently died from 9/11 related illness, by exploiting their involvements in that tragic day for personal gain."

The "coaching" for SSDI psychiatric examinations was extensive.  Almost every application included identical descriptions of the applicants' daily activities to fake psychiatric distress, such as "I nap on and off during the day . . . I have the TV on to keep my company . . . I was a healthy, active productive person . . . I'm unable to perform any type of work activity in or out of the house."   Esposito was recorded advising an applicant how to misspell words and how to pretend to be depressed at interviews.  "When you're talking to the guy, don't look directly at him," Esposito said.   "You know, pause for a second.  You're trying to show that, you know, you're depressed."

Many of those indicted were alleged to have unwittingly bolstered the case against them via postings on social media, and were even gainfully employed.  One "disabled" defendant worked as a helicopter pilot and one taught and performed mixed martial arts.   Others rode jet skis and one appeared on television working a cannoli stand at the San Gennaro Festival.

Sources:  New York County District Attorney's Office Press Release,,,

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