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HomeDeath & Dishonor: Crisis at the VAAbout 100 people accused in NYC disability scam: DA

About 100 people accused in NYC disability scam: DA

More than 100 people were rounded up and arrested Tuesday morning as part of a massive investigation into disability fraud in the New York City area, authorities said Tuesday.

The alleged ringleaders, which included 83-year-old Raymond Lavallee, a former Nassau County assistant district attorney, and retired police officer John Minerva, surrendered to the Manhattan District Attorney's office, according to prosecutors.

Approximately 80 additional police and firefighters, mostly from the tri-state area but some from as far away as Florida, also were arrested in the multiagency sweep that started at 5:30 a.m.

Most of the police and firefighters arrested are former New York City workers, prosecutors said.

Glenn Lieberman, a suspect in a wide-ranging disability scam, sits on a wave runner, with both middle fingers hoisted. Prosecutors say he fraudulently pocketed more than $175,000.Source: Manhattan District Attorney's Office

Millions in claims over decades, prosecutors say

According to the allegations, police and firefighters falsely claimed stress-related illnesses to pocket tens of millions of dollars in disability benefits. Many of the suspects also received 9/11 pensions, sources said. As the case unfolds with potentially more arrests, the fraud dollar amount could rise even further, authorities said.

Meanwhile, more details are emerging on the fraud case.

Manhattan District Attorney Cyrus Vance released the names of the 106 defendants. The list includes the men who allegedly orchestrated the scam—Lavallee, Minerva, Thomas Hale and Joseph Esposito. According to prosecutors, they solicited NYPD officers, firefighters and corrections officers over 26 years and pushed fraudulent claims totaling as much at $400 million.

Prosecutors say suspect Richard Cosentino, seen on a boat fishing, fraudulently received more than $207,000 in a broad disability scam.Source: Manhattan District Attorney's Office

From swordfishing to martial arts

The Manhattan DA's office also released pictures of several suspects, who received hundreds of thousands of dollars in benefits. In one picture, a man named Richard Cosentino is seen on a boat and swordfishing. He received $207,639.70 in payments, according to prosecutors.

Another image shows Louis Hurtadoin inside a martial arts photo. He pulled in $470,395.20, prosecutors say. And in yet another photo, a man named Glenn Lieberman is sitting on a WaveRunner, with both middle fingers raised, smiling into the camera. He received $175,758.40 in benefits, according to prosecutors.

A spokesman for the NYFD union declined to comment. Calls to several associations that represent current and former NYPD workers were not immediately returned.

At least two doctors who allegedly received kickbacks for bogus diagnoses also were arrested Tuesday.

(Read more: Long haired and growing pot, 'dead' banker caught)

More than $1 million in assets have been seized form various bank accounts thus far, according to authorities, with additional seizure of assets likely.

By CNBC's Jeff Pohlman. Follow the team @CNBCinvestigate.


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