Wednesday, February 26, 2014


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More defendants indicted in ongoing Social Security fraud investigation

NEW YORK – The indictments of 32 defendants for their participation in a massive fraud against the federal Social Security Disability Insurance Benefits program that resulted in the loss of hundreds of millions of dollars from federal taxpayers was announced on Tuesday.

On January 7, 2014, Manhattan District Attorney Cyrus Vance, Jr., announced the indictment of 106 defendants for their participation in this scheme; today’s indictments are a continuation of that ongoing investigation. The four principal defendants, Raymond Lavallee, 83, Thomas Hale, 89, Joseph Esposito, 64, and John Minerva, 61, who were also charged in the previous indictment, are additionally charged with grand larceny in the second degree and conspiracy in the fourth degree. The remaining 28 defendants are each charged with grand larceny in the second degree and criminal facilitation in the fourth degree.

“Last month’s indictment was the first step in ending a massive fraud against American taxpayers,” said Vance. “Today, dozens of additional defendants have been charged with fabricating psychiatric conditions in order to fraudulently obtain Social Security Disability insurance, a critically important social safety net reserved for those truly in need. These defendants are accused of gaming the system by lying about their lifestyle, including their ability to work, drive, handle money, shop, and socialize, in order to obtain benefits to which they were not entitled. Their lies were repetitive and extensive. My Office is continuing to work with the U.S. Social Security Administration to bring additional cases, where appropriate.”

Under the United States Social Security law, individuals are qualified as “disabled” and entitled to SSDI payments only if they suffer from a disability that prevents them from assuming any job available to them in the national economy. The payment amount varies per recipient, but the average annual payment is approximately $30,000 to $50,000 for each recipient.

According to documents filed in court and statements made on the record in court, from approximately January 1988 to December 2013, the four principal defendants are accused of directing SSDI applicants, including many retirees of the NYPD and FDNY, to lie about their psychiatric conditions in order to obtain benefits to which they were not entitled. The operators of the scam received cash payments in return for coaching the applicants.