Derailing the LIRR Disability Gravy Train

Last month the New York Times discovered that thousands of retired LIRR employees were busy getting disability payments from the Federal Railroad Retirement Board to the tune of nearly $250 million despite a lack of actual disabilities. That reporting led the LIRR and investigators to look into how the LIRR operates and demands that the federal agency change how it does business.

Now, the LIRR has taken action against one of its employees who helped facilitate this scam.

At a hearing on abuse of the retirement system, Williams declined to identify the employee or his position at the LIRR, pending an ongoing investigation. But sources yesterday identified him as Fred Kreuder, a 23-year veteran, now of Bellmore, the railroad's manager of operations support and analysis.

Reached at his home yesterday afternoon, Kreuder said, "I'm sorry, but I can't comment."

Kreuder's attorney, William Petrillo of Rockville Centre, confirmed that his client had been suspended, but said he was "convinced that when the investigation is completed, the attorney general will conclude that Mr. Kreuder had not done anything wrong."

Williams said the employee's side job was uncovered during an internal investigation by the LIRR's newly created compliance unit -- but he had been transferred from a previous job in the railroad's pension office for doing the same thing, sources said. The investigation turned up an e-mail he sent to a colleague who was seeking advice on how to apply for the U.S. Railroad Retirement Board's occupational disability benefit.

In the e-mail, the employee gave advice on how to maximize his benefits, when to set up appointments with a doctor and with retirement board representatives, and how to choose just the right retirement date.

Nearly all LIRR employees somehow managed to get disability payments from the federal agency. 98% of disability applications were approved by the federal board. The LIRR had an incredible number of disability claims despite being recognized annually for running one of the safest railroad operations in the nation.

All this comes at a time when the MTA, the LIRR's parent agency, is mulling yet another fare hike.