The “gravy train” derailed yesterday for a doctor and two insiders who ran a $1 billion Long Island Rail Road disability-fraud scheme.
A Manhattan federal jury yesterday found Dr. Peter Lesniewski and railroad retiree consultants Marie Baran and Joseph Rutigliano guilty of helping hundreds of LIRR employees receive sham disability payments by faking career-ending physical ailments.
The jury found the defendants, who pocketed more than $1 million through the scheme, guilty on all 21 counts, including charges of mail fraud, wire fraud, health-care fraud and conspiring to defraud the federal government. They each face more than 15 years in prison and are set to be sentenced Dec. 13.
Prosecutors say Lesniewski, 62, was a “go-to” doctor whom workers sought out to falsely certify disabilities, while Baran, 65, a former manager of the Railroad Retirement Board, and former LIRR union President Rutigliano, who retired in 1999 at 52, tapped their inside knowledge to help retirees lie successfully in paperwork.
They were the first to stand trial for the long-running scheme, which the FBI busted in 2011. Twenty-five people have pleaded guilty in the case, which extends to the late 1990s, and are cooperating with the feds in a bid for leniency.
“Dr. Lesniewski enabled hundreds of LIRR employees to dupe the government through medical paper trails filled with bogus diagnoses, while Baran and Rutigliano, in exchange for payments of thousands of dollars, helped lard the employees’ disability-benefit applications with lies,” US Attorney Preet Bharara said after the verdict was announced. “[They] served as engines of this fraud.”
Following the decision, the defendants’ lawyers told Judge Victor Marrero that they planned to appeal. Baran cried with her head down and the other defendants shook their heads upon hearing the verdict.
Assistant US Attorney Justin Weddle said the government would seek presentencing detention of Baran and increased bail for the other defendants, alleging Baran committed perjury on the witness stand during the trial when she claimed innocence.
Lesniewski’s lawyer, Thomas Durkin said, they were “disappointed, but“We are not shocked” by the decision.
During the three-week trial, prosecutors and witnesses chronicled a culture of corruption in which the scam was common knowledge among the railroad’s workforce, with employees openly comparing tales on how to beat the system at retirement parties and elsewhere.
Lesniewski, they said, regularly created a “paper trail” of needless medical appointments and tests and then charged the cheaters $800 to $1,000 a pop for phony “narratives” of their purported disabilities.
Rutigliano and Baran, they added, also routinely charged $1,000 to help the scammers prepare “cookie-cutter” applications filled with lies., with Rutigliano even cutting and pasting out portions of his own phony disability papers for clients to use.
During the trial, prosecutors said that 79 percent of the LIRR’s 3,800 retirees between 1998 and 2011 left on disability compared to just 21 percent at Metro-North Railroad during that period. They blamed the discrepancy on a special early-retirement option at the LIRR that fueled the fraud scheme.
Marrero said the government can make its arguments for higher bails for Lesniewski and Rutigliano and detention for Baran before a magistrate judge next week.