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NEW YORKA former pension manager for the Long Island Rail Road has been accused of helping employees obtain fraudulent disability pensions, New York state officials said.
The arrest announced Monday by New York Attorney General Andrew Cuomo was the first to arise out of the state's ongoing investigation into the legitimacy of retirement and disability payments at LIRR.
According to the complaint, 49-year-old Frederick Kreuder allegedly accepted $1,000 from LIRR employees in exchange for helping them obtain federal disability benefits, including referring them to private physicians and filling out federal disability paperwork.
The disability claims are paid by the Chicago-based U.S. Railroad Retirement Board.
"Today's arrest is the first time that someone is being held accountable for the culture of entitlement and systemic abuse that plagued the LIRR and Railroad Retirement Board," Mr. Cuomo said in a statement.
The attorney general said he began investigating the railroad after published reports indicated that more than 90% of LIRR retirees receive occupational disability payments from the federal agency in addition to receiving private pensions through LIRR.
Since 2005, Mr. Kreuder has been the LIRR's manager of budget development and analysis. Previously, he was the railroad's pension office manager. He is accused of official misconduct.
Last month, Mr. Cuomo held a public hearing on the LIRR investigation, during which a doctor testified about the high number of LIRR employees who sought federal disability paperwork from him just before they became eligible for LIRR retirement benefits, according to a statement.
Mr. Cuomo noted that the investigation is ongoing.