NYC Scheme Ringleaders Plead Guilty as OIG Issues Disability Fraud Report

Beyond the Numbers

Tuesday, September 23, 2014
Posted by: 
The Office of External Relations
(Joseph Esposito, photo from the New York Times)


The New York City-based disability benefit fraud scheme involving former city police officers and firefighters continues to generate headlines. 

In the past month, two former NYPD officers have pled guilty to their leading roles in a multi-million-dollar Social Security disability fraud scheme. 

  • Joseph Esposito pled guilty on August 27 to helping concoct and carry out the scheme; he was ordered to repay $733,000.
  • John Minerva pled guilty on September 12, and was ordered to repay $315,000.

As part of their plea deals, Esposito and Minerva both agreed to testify against other defendants in the case in exchange for reduced prison sentences.

Our investigation, conducted with the NYPD and the Manhattan’s District Attorney’s (DA) Office, revealed that Esposito and Minerva recruited and coached individuals though the disability claims process, intentionally misrepresenting their medical conditions to qualify for benefits.

The Manhattan DA indicted 130 beneficiaries connected to the scheme.  So far, 73 defendants have pled guilty to grand larceny; together they have been ordered to repay more than $14.6 million to Social Security.  And, we are continuing to investigate this case, working closely with the Manhattan DA and the NYPD.

This widespread scheme—and other disability program-related concerns—prompted Congressman Sam Johnson, Chairman of the Subcommittee on Social Security, House Ways and Means Committee, to ask us to undertake a “top-to-bottom” review of the Social Security Disability Insurance program.  In response to his request, we recently released a special report, The Social Security Administration’s Ability to Prevent and Detect Disability Fraud.

The report surveyed existing OIG work—audit reports, investigative results, and other related findings to identify significant vulnerabilities. We produced the report for informational purposes only; nonetheless, it does suggest some steps that SSA could take to further protect its disability programs from criminals and large-scale fraud schemes.

With insight gained from interviews, and gathering input from our criminal investigators, auditors, and attorneys, and even from the Manhattan DA’s office, the report points out that even with what SSA has done and is doing, more is needed in this ever-evolving fight against fraud.

In the report, we highlighted key actions that SSA should take to improve program integrity, including:

  • Investing in program integrity tools that analyze disability claims to identify those that are potentially fraudulent, to flag them for more scrutiny.
  • Investing in a comprehensive, searchable system of records, to provide valuable management information, and to identify fraud or emerging fraud trends; and
  • Modernizing medical and vocational guidelines to reflect advances in medicine and technology.

As we said in the report, this will not be quick, easy, or inexpensive.  But it has to be done to protect the disability programs, now and into the future.

We, of course, are an invested partner with SSA in this endeavor, and we will continue to do everything we can to help detect and prevent fraud, waste, and abuse against Social Security’s programs.