More Than 100 Defendants – Including Four Principal Targets – Have Pleaded Guilty to Felony Charges for Fraud Costing Taxpayers Millions of Dollars


Approximately $25 Million Ordered To Be Returned to Social Security Administration


Manhattan District Attorney Cyrus R. Vance, Jr., today announced the trial conviction of KEVIN HURLEY, 56, for stealing over $200,000 in connection with a massive fraud committed against the Social Security Disability Insurance (“SSDI”) program by multiple individuals including the defendant, resulting in the loss of hundreds of millions of dollars in federal taxpayer funds. To date, more than 100 individuals — including four principal defendants responsible for coordinating and organizing the scheme — have pleaded guilty to felony charges. In addition, approximately $25 million in forfeiture funds and restitution orders are being returned to the Social Security Administration. HURLEY is expected to be sentenced on June 2, 2016.

“Taxpayers paid the price for this blatant abuse of the social safety net for far too long,” said District Attorney Vance. “This defendant, like others convicted in connection with this scheme, purposefully sought out individuals who could help him fraudulently obtain benefits to which he was not entitled, thereby depleting the resources available to legitimately disabled individuals. I thank all those involved in ending this fraud and returning valuable monies to the Social Security Disability Insurance program and those who rely upon its support.”

Under the federal Social Security Act, individuals are entitled to collect SSDI payments if they suffer from a disability that prevents them from assuming any job available to them in any field of work. The amount varies by recipient, with an average annual payment of approximately $30,000 to $50,000 per individual.

According to the indictment and guilty pleas of the defendants, between January 1988 and December 2013, four principal defendants — RAYMOND LAVALLEE, 84, THOMAS HALE, 90, JOSEPH ESPOSITO, 65, and JOHN MINERVA, 62 — recruited and assisted more than 100 individuals with applications for SSDI benefits, and directed many to lie about psychiatric conditions in order to obtain benefits to which they were not entitled. Applicants, which included retirees of the NYPD and FDNY, were instructed to claim that they suffered from psychiatric conditions such as post-traumatic stress disorder, anxiety, and depression that prevented them from holding jobs. While some of the NYPD and FDNY applicants had limited disabilities that legitimately entitled them to New York State disability pensions, their conditions did not necessarily entitle them to SSDI benefits, which require a complete inability to work.

Typically, applicants were brought into the scheme by ESPOSITO, a retired member of the NYPD, or MINERVA, a disability consultant for the Detectives’ Endowment Association, the union that represents NYPD detectives. Applicants were later referred to LAVALLEE, an attorney, and HALE, who coached applicants to describe symptoms of depression and anxiety to establish false clinical records of psychiatric treatment.

Prior to filing their SSDI applications, virtually none of the applicants involved in the scheme had histories of psychiatric conditions that would qualify them to receive benefits. Among the indicted and convicted defendants, the highest total amount of money fraudulently obtained by an individual applicant was $500,000 over a period of two decades, a portion of which was collected by the principal defendants in the form of cash payments.

In 2004, HURLEY, a retired member of NYPD, began filing false SSDI applications with the Social Security Administration. With the help of the principal defendants, HURLEY obtained more than $200,000 in SSDI benefits over a nine-year period by making false, exaggerated claims of mental illness. By 2013, he had paid the principal defendants $20,000 in cash for their assistance in completing and submitting the falsified applications.

All four of the principal defendants in this case have since pleaded guilty. ESPOSITO, HALE, and MINERVA each pleaded guilty to Grand Larceny in the First Degree; LAVALLEE pleaded guilty to Conspiracy in the Fourth Degree. More than 100 felony guilty pleas have been entered on behalf of applicants indicted in connection with this scheme, with approximately $25 million ordered in restitution and forfeiture to the Social Security Administration.

Assistant District Attorneys Christopher Santora and Michael Ohm, Deputy Chief of the Rackets Bureau, handled the prosecution of the cases, under the supervision of Assistant District Attorney Jodie Kane, Chief of the Rackets Bureau, Assistant District Attorney Brenda Fischer, Chief of the Cybercrime and Identity Theft Bureau, and Executive Assistant District Attorney David Szuchman, Chief of the Investigation Division. Assistant District Attorney Vimi Bhatia, Senior Investigative Counsel and Deputy Chief of the Asset Forfeiture Unit, handled the asset forfeiture portion of the case. Law Fellow Alexas Tsakopoulos provided assistance with the trial. The following individuals also assisted in the investigation: Chief Investigator Walter Alexander; Supervisory Rackets Investigator Donato Siciliano; Christopher Stiansen; as well as Investigative Analysts Angela Jenkins, William Burmeister, Sara Dennis, and Willa Thompson.

District Attorney Vance thanked the following agencies and individuals for their assistance in the investigation: Patrick P. O’Carroll, Jr., Inspector General for the United States Social Security Administration, and the Special Agents John Grasso and Peter Dowd of the New York Field Office; New York City Police Commissioner William J. Bratton and the NYPD’s Internal Affairs Bureau; Special Agent in Charge Steven G. Hughes and the U.S. Secret Service’s New York Field Office; U.S. Department of Homeland Security Investigations, including Supervisory Special Agents Shawn Polonet and Marcos R. Castro; the U.S. Postal Inspection Service; the New York Regional Office of the U.S. Social Security Administration; the New York State Attorney General’s Office and its Organized Crime Task Force; the New York State Department of Taxation and Finance; New York State Police; the New York State Division of Criminal Justice Services; Suffolk County Police Department; and Nassau County Police Department.

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