5 MTA employees charged with overtime fraud scheme

The FBI called their alleged scheme “incredibly blatant.”

December 3, 2020, 1:59 PM

Five current and former Metropolitan Transportation Authority employees have been charged with fraud for falsely claiming to have worked hundreds of hours of overtime that they did not in fact work.

The L.I.R.R. and NYC Transit workers were being paid while at home, on vacation or bowling, federal prosecutors said.

“These defendants, senior L.I.R.R. and New York City Transit employees, allegedly made themselves some of the highest-paid employees at the entire MTA by claiming extraordinary, almost physically impossible, amounts of overtime,” Acting U.S. Attorney Audrey Strauss said.

The defendants – Thomas Caputo, Joseph Ruzzo, John Nugent, Joseph Balestra and Michael Gundersen – are expected to appear in court later Thursday.

"The alleged conduct by these MTA employees is an egregious betrayal of public trust," Tim Minton, communications director at the MTA, said in a statement. "The MTA has implemented a number of aggressive overtime controls that substantially increase oversight and accountability -- already resulting in a reduction of $105 million in overtime in 2019 alone and the implementation of a five-year plan to cut overtime costs by nearly $1 billion. We will continue to root out waste, fraud and abuse wherever it occurs and will continue cooperating fully with this critically important investigation."

The FBI called the workers' alleged scheme “incredibly blatant.”

“In the case of at least one defendant, the excessive compensation he received from the MTA was equivalent to purportedly working 10 additional hours a day, every day, for 365 days,” the FBI’s Bill Sweeney said. "The others weren’t far behind, collectively earning more than $1 million in overtime pay.”

In the case of Caputo, court records said he was paid approximately $461,000, most of it in claimed overtime, making him the highest-paid employee at the MTA during 2018 – higher than, for example, the MTA chairman.

The MTA inspector general compared the time records for the defendants with various records that established their true whereabouts, such as location information for their cellular phones, bank records, MTA building access card data, work and personal emails and social media records, and records from third parties such as a bowling alley where Caputo participated in bowling league games despite claiming to work an average of 10 hours of overtime every single day of 2018.

The men were each absent from work for hundreds of hours, for which they falsely claimed to have been present and worked in time reports submitted to the MTA, the criminal complaint said.

“As a result, each received at least thousands of dollars in unjustified and fraudulently obtained compensation,” the complaint said.

Anthony Simon, general chairman of the SMART Transportation Division, the L.I.R.R.’s largest union, defended the workers in a statement: “These accusations of overtime abuse and the pending investigations are approaching 2 years old. If a few workers have been pulled out of this investigation they have every right to the process to defend the accusations. They have worked tirelessly throughout these difficult times and are innocent until proven otherwise.”

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