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May 25 2012

Extortion Letter of a Different Kind – This One’s from Uncle Sam!!

So I have openly railed against copyright and trademark trolls using extortionate letters to extract unreasonable settlement amounts from folks accused of infringing on their intellectual property. In fact, I have a whole website devoted to the topic: www.extortionletterinfo.com. But Wednesday’s Newsday had a cover story about Long Island Railroad disability pension fraud that revealed perhaps the most outrageous extortion letter yet. This one comes from Uncle Sam, through his personal police squad- the FBI!

It seems the FBI recognizes that there is “rampant fraud” by LIRR workers who claim they are too hurt to work and then live off nice, fat, tax-free disability pensions fueled by the extortionate fees charged by their former employer, the LIRR. So rather than put more manpower and resources into this rampant fraud, here’s what they did. They made poster children out of about 20 of the worst offenders and then they sent letters offering a deal to all others: Come in and admit your fraud and we will not look to recoup your back pension benefits, just cut you off from future benefits. But if you do not come forward and reveal your fraud and we catch you later, then we will seek reimbursement for back earnings and cut off future benefits as well.

Uncle Sam Really Wants You!!

Forget that the FBI has just told folks they suspect to be criminals that they can keep their ill gotten gains as long as they come forward, that’s a whole other issue. The problem I have is not that they sent this letter to suspected cheats, its that they sent it to ALL persons receiving disability benefits from the LIRR.

Any disability recipient – even those legitimately hurt- will be quaking in his boots when he reads this. Was that all that physical therapy really necessary? Did I perhaps exaggerate how much pain I’m in a little bit? Did I try hard enough to see if the LIRR had a job for me to do with my limitations? The threat of an FBI investigation may make some folks who have done nothing wrong come forward “just to be on the safe side” and find themselves losing their rightful benefits.

We should expect the government to act only upon reasonable suspicion and probable cause. There is no justification for scaring the pants off some disabled person who may question their chiropractor’s credentials and decide they’d rather rough it in the future than face Federal prison and bankruptcy.

Let’s leave the mass mailing of threats to the IP trolls of the world.

4 comments

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  1. ????

    How quick the media is to brand an entire work force with the broad brush of fraud. They wish to demonize all former LIRR employees by painting them as cheats, liars and thieves when the truth lies obscured by the one sided attacks they are fomenting upon public approval. Handcuffed in spotlights, a select few retired rail workers are paraded through a gauntlet of media and in doing so, the media convicts through public opinion every former LIRR worker. The LIRR defends itself today by standing dumb founded that such large scale fraud took place under it’s nose, while in truth for years it was complicit with a system that allowed access to occupational disability. It even fostered the system by helping its work force out the door at an early age when they could be replaced by cheaper substitutes. They conducted seminars with representatives from the federal governments Railroad Retirement Board in conjunction with the LIRR’s unions that assisted and eased these workers out the door at an early age. They added the incentive of medical insurance until the age of Medicare, the carrot to get them to go when everyone who hit the streets could be replaced by someone at 70% of the pay scale who was also paying into a different type of pension.

    Some short history is in order. In the late 1960’s the LIRR was broke. Owned by the now defunct Pennsylvania RR, it was drastically under-staffed and often unable to support enough equipment to sustain it’s daily schedule. New York’s Governor at that time, Nelson Rockefeller, understood the magnitude of what such a failure of the public transportation system on Long Island would do. One hundred thousand plus daily commuters needed that system to get to work. He pushed to put the LIRR under the umbrella of the MTA. Funding was now available to purchase new rail cars and engines, but the work force still needed to be addressed. Work facilities were antiquated and generally unsafe and work rules were such that tenured employees were so favored that a new employee was not even guaranteed a days pay for a days work. That was changed contractually to insure a five day work week for new hires, but in doing so, a shrewd union leader negotiated a pension, privately funded through the state, to lure new employees. The LIRR became the only railroad in the country with a privately funded pension. In a few short years, the LIRR became a place where once no one wanted to work to a place that was now one of the more desirable jobs in the metropolitan area. The LIRR prospered and grew into the largest commuter railroad in the country. It also became the safest railroad in the country. A railroad, not a transit system, it fell under the rules of the Federal Railway Administration and its employees paid into the railroad retirement system administered by the Railroad Retirement Board, a system that pre-dates Social Security and is completely funded through employee and railroad contributions.

    The system worked and the LIRR flourished, but it was no longer a private company. It became your prototypical government bureaucracy, bloated and over-staffed at the top with the union representative employees constantly under scrutiny for staffing cuts to foster so called savings. The employee pension plan was renegotiated through union contracts over the years and no longer was completely funded by New York State. Over the years, the MTA also tried to lift the LIRR out of the FRA. Such a move would have allowed the MTA to run the LIRR like the subway system, laxer safety rules as well as a different system of collective bargaining. They took the case all the way to the United States Supreme Court, where it failed. The nine wizened judges decided that if it looked like a duck and quacked like a duck, it was a duck, it was a railroad. So it stayed under the auspices of the Federal Railway Administration and the Railroad Retirement Board.

    So today, we now have twenty one under arrest on charges of fraud filed through the Department of Justice. They committed this fraud against the RRB by claiming a debilitating condition that prevented them from doing their jobs. Are they all guilty of some malfeasance? I am sure the DOJ did their due diligence, (one would hope wouldn’t one?), on the ones arrested, but it is where this debacle is going now that causes concern. With a work force of about eight thousand, the LIRR loses hundreds every year to retirement. Now the DOJ states that almost 95% of them have left railroad employ with a RRB disability annuity. That’s a staggering number of employees that leave the safest railroad in the country with some form of debilitating disability but, and this is the crux of the case being presented by the DOJ, were all of these employees really disabled? Well, according to the doctors reports submitted to the RRB and the RRB itself, YES, everyone of those employees met the criteria to claim a disability. Did the doctors lie? Well, two out of three of the biggest signatories on the claims have been arrested, (the third is dead), but one has to doubt that a doctor would jeopardize his medical license to commit such a fraud. The law is the law and therefore all these claimants must surely have met the criteria for a disability. So, did the claimants lie? Well, the doctors sent them all for CAT scans and MRI’s and physical exams and the findings were submitted to the RRB, which approved the lot of them. So where is the lie and why is the DOJ going back twenty years scanning the rank and file of every retired employee and offering this sham of an amnesty? That’s right, an amnesty from prosecution to anyone who steps forward and claims they committed fraud. And what constituted fraud?

    So I ask again, where’s the fraud, where’s the scam that has the media beating down doors and claiming these former rail workers to be pigs at the trough? The fervor with which they are roiling the pot makes one scratch his head. You worked for the railroad? You’re stealing, you’re guilty, off with your head! And how many heads are going to roll? The DOJ claims they are sending out over 1500 amnesty offers to former LIRR employees, and on good authority, some of those employees who have received this offer retired as early as 1992, twenty years ago. Does that mean they suspect only 1500 to be guilty, when the actual number of retirees spanning a twenty year period would be closer to 5000? If the math they have foisted off on the media is correct, that would mean almost 4750 retirees are out there with a disability annuity. So what makes the 1500 guilty, golf? That’s how this story broke, a number of former LIRR retired and disabled workers playing golf, shame on them. Why, if you are disabled you certainly cannot play golf. Wait a minute, the deaf play golf, amputees play golf, even the blind play golf. It’s exercise, not some physical contact sport, but the paper of record, the New York Times, ran with this story, video-taping a former LIRR union leader playing golf. The Times said that’s not right, playing golf while you’re disabled, but if you asked the Golf Channel’s resident critic David Feherty or the iconic former US Open champion who plies his trade on NBC, Johnny Miller, to critique the golf swing of that former LIRR worker, the only possible response would be, “sure, that guy’s disabled. With a swing like that he has to be disabled”. So where is the meat and potatoes that has the media all riled up in this story? What’s the criteria that the DOJ is using to determine who is getting an amnesty offer and who is being arrested? And, how are they going to prosecute the masses of malevolent miscreants they drag before the court of public opinion?

    As this case moves forward, there are really only two ways they can convict anyone they arrest. Fraud and income tax evasion seem to be the sole avenues to prosecute upon. Fraud in the sense that these retirees knowingly took something they weren’t entitled to, and income tax evasion because they earned money outside the RRB annuity and failed to claim it. Just the fact that a disability annuitant earned money is a violation of the agreement, but that’s a fine line, too. You see, an annuitant can make money but he cannot earn it. He can become a professional poker player sitting in a casino 24/7 and stacking up his chips, but he cannot sit in that same casino as a dealer. He can own an apartment building as long as he doesn’t manage it because he cannot own a business, unless it’s incorporated in someone else’s name, and even with that he still cannot work at that business. A fine line indeed, and that’s the line the DOJ is trying to tread as it moves forward trying to prosecute this case. That’s also most likely why they offered amnesty to anyone who steps forward. They don’t really have a slam dunk case against almost every retiree out there. There may be a couple that are breaking the law, but unfortunately they have let the media run wild with the story.

    To allow the media to massacre thousands of former railroad workers because of a few bad apples can only be summed up as a witch hunt. This is quite akin to the shenanigans the Puritans preformed in Salem centuries ago. Branded by the print, television and radio media each and every retired LIRR worker who went off on a disability is guilty and they certainly won’t step into the bright spotlight to attempt to prove their innocence. Let the DOJ find the guilty ones but, to brand 1500 as suspect is just plain wrong and has done nothing but stir up animosity against every former LIRR worker.

  2. Oscar Michelen

    Thank you for your extensive and well thought out comment. I agree that the DOJ is dead wrong to try and paint all disabled retirees with the same brush. While it may be harder to do , the DOJ needs to gather evidence on each individual it believes is defrauding the government. If it gathers sufficient probable cause, then arrest those individuals and prove the case. But this tactic is very likely to get innocent folks to give up their rights just to “play it safe” and not be brought into court and the press.

  3. Michele

    Exactly, scare the crap out o them, and use Entrappment on them as well.
    You have no clue what it’s like to go threw this for helping someone, they have good days and bad days and maybe they should video tape them popping pain killers.
    Who he hell are they to say whose disabled or not.
    A kid with no legs is disabled,but he can run, swim, jump, Drive, ride a scooter, but he is disabled.
    Why a man with job related alments is out threw the ringer bc they say hes not??
    No very wrong.
    MS

  4. Elizabeth

    ms, aren’t you married to one of the convicted?

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