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Total of 132 Individuals Arrested In Social Security Fraud

Feb 26, 2014 | Fraud |

September 11, 2001 was a day that will forever be engrained in our nations minds. It has recently been discovered that this day may have served as more than a tragedy to a large number of individuals. For these individuals, that day was the chance to scheme and take approximately $400 million from the federal government.

104 individuals, including dozens of former police officers and eight former firefighters, were arrested last month. Now there are 28 additional individuals that are facing federal charges, totaling 132 people. The 132 people have been indicted as part of the Manhattan district attorney’s investigation into an extensive scheme to defraud Social Security disability insurance.

These defendants are currently being accused of pretending to have mental illnesses to obtain disability payments from the federal government. Currently these individuals have obtained more than $21.4 million. It is alleged that many of the accused falsely claimed to have been unnerved and mentally impaired while working during the September 11, 2001 terrorist attacks.

How could so many individuals get away with faking these illnesses? According to the court papers, many of the defendants were coached on how to pretend to have symptoms of depression and post-traumatic stress disorder during exams. It is alleged that retired officer, Joseph Esposito, was the main coach of these symptoms; he played a large part in preparing the defendants for the exams they would undergo by psychiatrists from the Social Security Administration.

There were many other individuals involved with this scheme. Prosecutors for the government say that the scheme was originally orchestrated by a Long Island lawyer, Raymond Lavallee, 83, and a consultant, Thomas Hale, 89, many years ago. Hale had been convicted of operating a similar fraud scheme involving veterans on Long Island in 1983 and Lavallee specializes in representing people with similar disability claims. Along with the two orchestrators, a former disability consultant for the Detectives Endowment Association was a major player in the scheme. John Minerva is allegedly responsible for referring retired officers and firefighters sent to him by Mr. Esposito to two psychiatrists who said they had mental illnesses. As of now the doctors have not been charged.

This is one of the biggest cases of its kind in the history of the Social Security Administration. Right now, the federal government is estimating that the total loss is about $400 million. Although only 132 people have been arrested, prosecutors believe that the scheme may involve as many as 1,000 people.

Source: New York Times, Indictments for 28 More in Fraud Case, James C. McKinley Jr., 2/24/14

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