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Former electrician gets probation in LIRR disability fraud case

May 15, 2014 by  
Filed under Blog

Steven DeStefano, a 63-year-old former Long Island Rail Road electrician from Manorville, on Thursday became the 19th defendant to escape a jail sentence for fraudulently claiming disability benefits.

DeStefano, who pleaded guilty and cooperated with prosecutors after he was caught, was put on probation for 3 years and ordered to repay $183,107 in disability payments he lied to get from the federal Railroad Retirement Board.

“I want to take full responsibility,” DeStefano told Manhattan U.S. District Judge George Daniels. “I apologize to everyone involved and I’m very sorry this happened.”

Of 33 doctors, consultants, and ex-workers charged in what the government says was a decadelong scam that involved hundreds of retirees, 28 have now been sentenced. No one who agreed to aid in prosecuting their ex-colleagues has received prison time.

DeStefano allegedly put in 1,100 hours of overtime, nearly doubling his salary, in his last year before retiring, and then claimed he was unable to do his job due to being shot in the knee in the 1990s and a degenerative arthritic condition.

In fact, he later admitted, he was still able to work, but decided to retire because of a dispute with the LIRR. In retirement, he got a $20,000 pension from the railroad and $33,700 in disability benefits.

Daniels ordered DeStefano to pay 10 percent of his income a month toward repayment of the $183,107. When a defense lawyer asked for a reduction to 5 percent because of family financial burdens, the judge said full repayment was unlikely at 10 percent, but gave probation officials discretion to reduce the rate if “appropriate.”

Federal guidelines called for DeStefano to serve 15 to 21 months in prison, but prosecutors said he gave them “substantial assistance,” including providing information on a consultant who helped with his phony disability form who has never been charged.

DeStefano did not testify at either of two trials of other LIRR defendants, and a spokeswoman for U.S. Attorney Preet Bharara had no comment on why the consultant DeStefano implicated was never charged.

Bharara also has never commented on the status of the dozens of other retirees his office once suggested were involved in the scandal.

DeStefano declined to comment as he left court.


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