They might not have been Oscar-worthy performances. But the acting job by hundreds of Long Island Rail Road (LIRR) employees and their enablers was convincing enough to run a racket that could wind up costing U.S. taxpayers $1 billion or more. On October 27, FBI and New York State agents arrested 11 persons for operating a scheme by which retired workers at the heavily unionized LIRR allegedly visited doctors who would prepare phony medical histories, allowing retirees to receive outsized pension and "disability" checks, courtesy of the U.S. Railroad Retirement Board. One arrestee, in fact, was a former union president. The investigation was triggered by revelations a few years ago of unusually high rates of disability claims and awards. "This was a game where every retiree was a winner," said FBI New York bureau head Janice Fedarcyk.
The massive scandal surrounding the renovation of New York Metropolitan Transportation Authority (MTA) headquarters in Lower Manhattan continues to reverberate. The latest casualty in this union-connected ghost-worker and money-laundering scam is Constantine Vafias, 70, a Brooklyn-based construction contractor. On April 7, Vafias was sentenced in U.S. District Court for the Eastern District of New York to three years probation and ordered to pay $1 million in restitution and $100,000 in forfeiture. Those sums, substantial as they are, represent only a fraction of the total funds siphoned off into the pockets of the lead contractor, two major local unions, various shell companies and the Gambino crime family.