Massive New York Social Security Scam Shows Need for Reform

Manhattan District Attorney Cyrus R. Vance, Jr. announced an indictment of 106 defendants in an elaborate Social Security Disability Insurance (SSDI) scam this past Tuesday. Among those indicted were seventy-two NYPD and eight FDNY retirees, along with the four men accused of running the scheme.

According to a press release by the New York County District Attorney’s office, the group was led by Raymond Lavalle, 83, a Long Island based attorney who previously served as Assistant District Attorney and Chief of the Rackets bureau in the Nassau County District Attorney’s office. Lavalle colluded with a retired NYPD member, a disability consultant for the union representing NYPD detectives, and a pension consultant.

The four men are charged with Grand Larceny in the First and Second Degree, and Attempted Grand Larceny in the Second Degree. They served as ring leaders behind this massive scheme that has spanned twenty five years and has cost taxpayers hundreds of millions of dollars. According to court papers, applicants were brought in and then were coached and instructed on how to lie and cheat their way to disability benefits.  The four culprits were handsomely rewarded for each applicant, receiving a onetime cash kickback ranging from $20,000-$50,000, based on the applicant’s monthly payments. 

The other 102 defendants, all of whom are SSDI recipients, are charged with Grand Larceny in the Second Degree and Attempted Grand Larceny in the Second Degree. 

“For years, federal taxpayers have unwillingly financed the lifestyles of the defendants charged today,” said District Attorney Vance. 

By alleging they were unfit for employment due to disabilities that prevented them from socially interacting, many of the defendants were able to successfully collect on mental disability claims. Court documents portrayed a vastly different image of these disabled workers - many defendants claimed they could not use a computer, but their Facebook, Twitter, and YouTube accounts revealed otherwise. Many of the defendants were simultaneously employed in the private security sector, energy and investment companies, and construction.. The average SSDI monthly disability payment ranged from $2,000 to $5,000 per month and helped finance fraudulent beneficiaries’ trips to Las Vegas, fishing excursions, Jet Skis, and even to teach and perform mixed martial arts, a stark contrast to their alleged disabilities.

This scandal once again proves the ineffective methods in which the Social Security Administration tries to protect taxpayer dollars. The rampant waste and abuse of the Social Security system highlights the dire need for greater government transparency and reform to ensure benefits actually serve those in need in current and future generations. 

TAGS: Spending, Entitlement Reforms, issues

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