Long Island Rail Road, Aflac, and Disability Orgy

In case you missed it, the New York Times has been reporting on the investigation of a bold disability scam involving employees of the Long Island Rail Road. This disability orgy of sorts has been going on too long to blame it on our recent tough economic times driving people to do the wrong thing. This matter seems to be a matter of mere greed driving people to do the wrong thing.

The investigation began when it was learned that the L.I.R.R. had a disability rate three to four times that of the average railroad. So far, the investigation seems to have revealed that L.I.R.R. managers and officials served as consultants to employees on how to get disability payments from both the federal government and private disability insurance companies. Since 2000, thousands of L.I.R.R. retirees have collected a quarter of a billion dollars in disability payments from the federal Railroad Retirement Board alone.

Shortly before retirement, railroad workers would go to doctors for a medical evaluation which almost always resulted in a finding that the workers were disabled. Thus, they were able to retire with normal retirement benefits, plus disability benefits. Many of the employees had also purchased private disability policies from Aflac and Transamerica, which they also cashed in on, based on the finding of disability. The L.I.R.R. officials and managers who served as the employees’ consultants signed off on the disability claims, making it easier for them to collect, particularly from the private insurers.

In hindsight, someone in authority should have known there was something rotten in Denmark, or at the L.I.R.R. There was the close proximity between retirement and the submission of disability claims by a lot of employees. They suffered from similar disabilities. They used the same three doctors. They were buying a load of private disability policies, causing investigators to now point fingers at Aflac and Transamerica for failing to figure out that something was amiss and to notify the L.I.R.R.

Checks and balances aren’t only necessary in government. They’re just as necessary in business. All you need is a few people willing to cooperate in a scam for millions of dollars to be gone. Some employers now have a compliance officer and a compliance department to make sure something like this doesn’t happen. Every employer needs to have some type of system designed to prevent their employees from giving in to their weaker selves, particularly when they’re in cahoots with other weaker selves.

1. 

   John Phillips says:

   November 15, 2008 at 9:36 am

   Thanks for the mention.