Here is the
description of the alleged disability fraud conspiracy in New York given by Social Security's Inspector General to the House Social Security Subcommittee today:
Upon retiring from the NYPD [New York Police Department] or FDNY [New York Fire Department]
(a few of the defendants are other public employees), retirees
would contact Esposito
or Minerva, who
were
known within the
New York City
law enforcement
community
as men who could assist
individuals
in obtaining disability or retirement benefits.
Esposito
and Minerva were the recruiters, and
generally instructed
the potential
applicants
that,
in order
to obtain
SSDI, their claim needed to include a psychiatric illness;
and
that
they could create
a convincing version
of such an illness
based on events that occurred while they were working, such as the
September 11,
2001
terrorist attacks
.
Once they had a new client reeled in, Esposito
and Minerva
would
connect
applicants with Hale, a
disability consultant who
would schedule
the applicant
with
a psychiatrist or psychologist.
Since a
qualifying disability must be expected to last for
a
year
or more
(or result in death), these
applicants
would generally undergo treatment for
a
full year before applying.
This medical evidence would be
included in
the
applicant’s
SSDI [Social Security Disability Insurance] claim,
which would be completed and
filed by Hale and
by
Lavallee
,
who would be the applicant’s attorney of record.
Esposito instructed applicants to exhibit symptoms of depression,
anxiety
,
and related disorders during
doctor visits
. He
coached
them on
how to act
at
an SSA consultative examination:
how to dress, how to
behave,
and
how to fail a concentration test. Finally, he coached them
on
specific claims to make, such
as that
they
couldn’t concentrate
or
sleep, didn’t go out, and even that they
were afraid of planes and
large buildings,
if they were claiming to be disabled based on their participation in the events following
the 9/11 terrorist attacks. ...
Because they were treated for a year before even applying for benefits, their ultimate SSDI award
included a lump sum retroactive
benefit payment from the alleged
disability onset
date. These lump
sum initial payments were
between $10,000
and
$50,000
.
The law
currently
limits a representative's fee to $6,000 of an applicant’s lump
-
sum retroactive benefit
,
and with Lavallee listed as the attorney of record, he would generally receive a payment of $6,000
directly from SSA
.
However, the
a
greed-upon
“fee” paid to the facilitators
by these fraudulent
beneficiaries
was generally
14
months’ worth
of benefits, as much as $45,000.
To make these payoffs,
Esposito instructed applicants to withdraw cash
from their banks
in small
amounts so
as
not
to trigger
IRS
reporting requirements or
any
suspicions
on the part of their
financial
institutions. The
applicants would
then
make cash deliveries to Esposito
and/or Minerva
of an amount
equal to
14
months’ worth of benefits, less the $6,000 Lavallee
had already received from SSA
.
Esposito and Minerva would then split the cash with
their co-conspirators.
Maybe it all went down exactly like this but it sounds bizarre to me. A few questions:
- Why were there all these middlemen?
- Why undergo a year of psychiatric treatment before filing the claim? You don't have to do that. The standard advice from reputable Social Security attorneys for claimants with psychiatric problems who are not in treatment is to file the claim now and get in treatment now. Don't delay doing either one.
- Here's the big question: I have a hard enough time persuading clients who unquestionably have psychiatric problems (and these include people with a history of multiple involuntary commitments due to mental illness) to get in treatment and stay in treatment yet the allegation here is that people who did not have psychiatric problems voluntarily submitted to seeing a psychiatrist over the course of a full year and repeatedly making false assertions to the psychiatrist. Would you do that?
- Why would these allegedly fraudulent claimants voluntarily pay vastly inflated attorney fees?
13 comments:
if you can't believe this scheme, you are pretty naive. Attending psych appointments for a year, knowing that you will get benefits for 15 years is an easy trade-off. Just go in, complain about PTSD and anxiety and they give you meds...15 mins, once a month.
People do a lot more to get drugs when they have no impairments. THe added incentive of getting paid makes this seems like a good choice for these guys (aside from the fraud).
To answer all your questions: because they are crooks.
In response to your question about why anyone would undergo a year of mental health treatment prior to filing the disability claim:
A claim of mental illness looks more credible if there is a history of mental health treatment prior to the application for benefits; the longer the history, the better. If treatment commenced after the application date, then I am inclined to think that the claimant only started treatment because she was trying to bolster her claim (usually at the urging of an attorney), not because she was actually trying to manage disabling mental health symptoms. This is the standard view at the Appeals Council even among claimant-friendly analysts and judges. I would assume that it is the prevailing wisdom at hearing offices as well.
@ 2:39
I work at a hearing office as an attorney. I have a somewhat opposing view. Typically, when I see long-term treatment prior to the app, I conclude that the claimant was able to work with the impairment and thus should still be able to work (absent evidence of increased symptoms).
Treatment that begins at or after the onset is more credible as it indicates increased problems that were not present when the claimant was working.
"Why undergo a year of psychiatric treatment before filing the claim?"
I agree it is bad perception to begin psychiatric treatment at the initiation of a claim. But more importantly, many of these conditions can be treated with the proper medication regimen. And such medications generally do not work overnight but can be effective within several months. As a result, it would not be unreasonable to conclude that such an applicant who initiates treatment at the time of filing, would lack a showing that the impairment in its severity would meet the 12 month requirement.
"Typically, when I see long-term treatment prior to the app, I conclude that the claimant was able to work with the impairment and thus should still be able to work (absent evidence of increased symptoms)."
In most cases (and ideally), the claimant would continue to work if they had the functional capacity rather than roll the dice with an uncertain and lengthy disability process.
In other scenarios, such as when the factory shuts down, you would have to agree that a claimant with a longstanding medical history would have more credibility than an individual who commences treatment at the time of filing a disability/unemployment claim.
In addition to the social security benefit, the mental disorders could bump up the disability retirement these guys might have been receiving from NYPD. So the short answer to why go through all this trouble is CASH. Why the elaborate scheme? There was nothing wrong with them, and as cops, they knew that had to do all that they could to cover their tracks.
I'm appalled by the lack of insight and the cynicism by the people in the AC and ODAR on the application date vs. the beginning of psychiatric treatment. Repeatedly, I see new clients who have been treated with medications for depression/anxiety by family physicians for years without improvement; community stigma and pride ["I aint crazy!] among less educated working class people keeps them from seeking necessary psychiatric/psychological evaluation and treatment. IF they have such symptoms, I make it a condition of my representation that they at least go to a mental health clinic for an evaluation to see if treatment is necessary. This is NOT "gaming the system." It is the ETHICAL DUTY of a COMPETENT attorney to ensure that ALL of his client's evidence is developed for evaluation.
1) so many middlemen? do you know how new york corruption works? lots of hands, every palm gets greased.
2) i dunno, this back and forth about what the timing of mental health treatment does for you credibility-wise as an SSA attorney (i am an odar attorney, as well) seems silly. i don't think i have a predisposition either way--some claimant's don't have good access, and only start Tx after their rep recommends it. some folks' symptoms got worse. some folks are trying to beef up their claims with Tx notes. it's a variety of factors for each case, and i find it interesting that people have such rigid, automatic beliefs about it.
3) think, Charles. these people are perfectly mentally healthy (well, maybe personality disorders or something). they are using rational thought to say "i will attend these visits because they will result in a huge payday." 15 minutes with a psych every month, every three months? it's the very regular therapy that would be hard to tolerate...your actually afflicted clients worry about stigma, feel they do not need treatment, etc.
4) my best guess is these guys are kinda stupid or lazy. it really isn't too tough to research all the ways to act mentally ill, go through the motions of treatment, etc. etc. independently. it was a machine, spread through word of mouth. if your buddy charlie did it and it worked, you'll do it too. plus, don't you like to talk about how difficult, scary, long, complicated, etc. the application process is? unless one has knowledge of the process (by working for SSA or a rep's office, maybe?), it probably seems daunting to pull off such a fraud by ones self.
It ain't Greek Boys, it's SSR 96-2p, treating physician rule. The claimant's have been treating with the physician a fair amount of time, his opinion is well supported and not inconsistent (at least not too inconsistent) the tie goes to the runner and "pop" another claimant gets paid and the backlog goes down by one.. Judges have to look for the easy way out and a year of Psych treatment is hard to resist..
@ 4:31, if they stopped working "when the factory shut down" they probably aren't disabled.
I wonder if any of these claimants were in fact working close to the World Trade Center on 9/11.
Is the retirement for NYPD and NYFD really so awful that they would need to do this? I guess these are men and women who cannot easily work into their 50s and 60s. Pension consultants perpetuating fraud is pretty nasty and I'm sure that they all had themselves pretty well-convinced that this was their entitlement. The slick pension consultants taking huge fees are the worst, though.
Is ODAR going to review every case in this scheme?
For Anon 5:48 Jan 16,
Your comment “….it's SSR 96-2p, treating physician rule. The claimants have been treating with the physician a fair amount of time, his opinion is well supported and not inconsistent (at least not too inconsistent) the tie goes to the runner and "pop" another claimant gets paid…”
Joke, right? HA HA HA HA HA HA. Here’s an example of someone who probably never set foot in an ALJ Hearing.
Most judges slap an inconsistent label on the AP evidence and cherry pick anything negative in clinical findings and “pop” another claimant gets denied. Merits of the case be damned. SSR 96-2p is a joke and the Appeals Council is a joke because they support this façade and return less than 18% of ALJ decisions.
SSR 96-2p, yea, and Tie goes to the runner, yep that’s the ticket. Right.
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