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LIRR Scandal Charges May be Dropped

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Fredrick Kreuder faces a 49-count indictment, but Judge John Kase (Nassau County) is said to mulling over whether to drop the charges against him after hearing arguments from defense attorneys.

Kreuder’s attorneys say that he is being made a scapegoat after the revelations that nearly every Long Island Railroad employee is granted disability pension benefits from a federal railroad agency.

Back in October 2008 an orthopaedic surgeon (who preferred not to be named) ‘blew the whistle’ on the disability scam. He described how the system had, with no oversights, rubber stamped hundreds of disability claims. Railroad workers in their 50’s about to head for early retirement were diagnosed with sudden hip, knee, back and spine pain. Explanations for how these injuries had occurred included such things as ‘unlevelled flooring’ at work.

The disability rate of LIRR workers had climbed to three times the national average at a cost of $250 million to taxpayers since 2000. 90 per cent of retired LIRR workers had applied for disability and 98 per cent received it (interesting in the light that the LIRR has earned national awards for worker safety over the last few years). The New York Times found supposedly ‘disabled’ former railroad workers, wandering leisurely round golf courses (a free perk for state retirees).

Attorney General Andrew Cuomo has led the investigation for this scam on the taxpayers. Documentation was shown that showed an employee advising co-workers how to cheat the retirement and pension system.

LIRR President Helena Williams set up additional ethics training for all LIRR employees and set up a hotline for employees and public to report any suspected fraud, waste and abuse. She called for changes in legislation of the disability system.

Williams also asked for a congressional review of the existing statutes governing the Retirement Board, and suggested that more stringent standards were needed to “weed out frivolous claims” Helena Williams also noted that the Railroad Retirement Board does not consult with the LIRR before approving disability claims.

Federal agents seized documents and computers from the Westbury, N.Y., office of the Railroad Retirement Board and Gov. David Paterson called for a congressional investigation of the federal board. "At a time when our state and national economies are facing unprecedented strain and families are worried about meeting the cost of basic necessities, we must ensure the most appropriate, efficient use of taxpayer dollars," he said.

Manager of Operations and Analysis worker Fred Krueder was suspended and charged with corruption. On November 17 2008 he was relieved from duty without pay. He had been a worker with Long Island Railroad for 23 years. Kreuder pleaded not guilty to charges of official misconduct and receiving unlawful gratuities.

While it seems clear that Kreuder had been showing workers how to apply for and get disability pensions his attorneys contend that while he may have violated ethical standards he did not break the law. They see Kreuder as a scapegoat, and something of a pawn in a larger game.




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  1. Bull says:
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    The TAXPAYERS are really FED UP with the CRAP Civil Servants and quasi Civil Servants (like these) get away with.

    The standard for a disability retirement should be meeting Social Security’s definition of disability.