First arrest in LIRR disability investigation

The first arrest in the investigation into disability payments given to over 90 percent of Long Island Rail Road (LIRR) retirees was made recently.
Frederick S. Kreuder, 49, the LIRR manager of budget development and analysis, was arrested for allegedly accepting payments from LIRR employees in exchange for assisting them in obtaining federal disability benefits, including referring them to private physicians and filling out federal disability paperwork, said State Attorney General Andrew Cuomo.
After being arrested on the morning of Monday, November 17 at his Long Island home, Kreuder pleaded not guilty and was released without bail, said his lawyer, William Petrillo, explaining that his client’s next court date is December 17.
Kreuder, who did not respond to numerous phone calls from The Courier, had been working out of LIRR’s Hillside Support Facility in Hollis until he was suspended in October after revelations in Cuomo’s ongoing investigation of retirement and disability benefits at LIRR.
According to the complaint, Kreuder accepted $100 from one employee in
the form of a contribution to his baseball team and agreed to accept $900 more once that employee’s application for Railroad Retirement Board occupational disability benefits was approved, Cuomo explained.
In exchange for these payments, Kreuder allegedly agreed to help the
employee with his application for Railroad Retirement Board benefits, including referring him to a doctor that he knew would provide supporting documentation, Cuomo added.
According to his office, the complaint charges Kreuder with receiving a reward for official misconduct in the second degree, a Class E felony, punishable by up to four years in prison, and official misconduct, a Class A misdemeanor, which is punishable by up to one year in jail.
“Today’s arrest is the first time that someone is being held accountable
for the culture of entitlement and systemic abuse that plagued the LIRR
and Railroad Retirement Board,” said Cuomo, describing the great number of disability applications and payments as “unchecked abuse.”
“The credible evidence will demonstrate that this case is being portrayed as something that it’s not and Mr. Kreuder is the classic scapegoat,” said Petrillo, Kreuder’s lawyer. He explained that he was unable to give more details at this time.
Kreuder’s arrest took place amid Cuomo’s ongoing investigation into disability and retirement payments made to LIRR retirees. He began the investigation upon request from Governor David Paterson after news reports revealed that over 90 percent of LIRR retirees receive occupational disability payments from the Railroad Retirement Board in addition to receiving private pensions through LIRR.
According to published reports, the LIRR retirees were getting disability payments despite the fact that the company was receiving safety awards.
During an October public hearing as part of the LIRR investigation, testimony was introduced from a Long Island doctor who admitted that a high number of LIRR employees requested federal disability paperwork from him just before they became eligible for LIRR retirement benefits.
Other testifying witnesses included former LIRR Controller Kim
Porcelain, LIRR President Helena Williams and an investigator from the
insurance company Aflac, who testified to unusually high payout rates on
private short-term disability insurance policies held by LIRR employees.