Before they filed for disability insurance, prosecutors said, none of the defendants had a history of a psychiatric condition that would qualify them for disability insurance benefits. While collecting their cash benefits, officials said, many applicants lived lifestyles that starkly contradicted the representations on their applications.
Defendants often claimed that they rarely left their homes, did not travel and had almost no social interactions with family and friends, prosecutors said. But according to court documents, applicants were, in fact, driving, traveling by air, taking part in sports and lifting heavy objects. Officials added that several were also gainfully employed, at energy and investment companies, private security firms, and in construction, landscaping and baking.
Applicants were typically awarded benefits between three and 12 months after submitting their applications. Initial awards were paid in lump sums that included retroactive awards dating back to a year before the application filing date. The retroactive portions could be as high as $100,000. The recipients then continued to receive monthly payments.
According to the indictment, after the retroactive awards were deposited into the applicants’ accounts, Esposito and Minerva instructed them to withdraw cash in increments under $10,000, so the withdrawals would not raise suspicion or require the filing of currency reports with the federal government. Applicants then allegedly made cash payments to Esposito or Minerva, who in turn transferred the money to Hale and Lavallee. Vance said that these one-time cash payments were based on the applicants’ monthly awards, and ranged from $20,000 to $50,000.
In addition to a portion of the kickbacks, officials said, Lavallee received $6,000 directly from the government for attorney’s fees for each applicant.
Applicants’ monthly disability payments ranged from $2,000 to $5,000, depending on the number of their dependents. Officials said that the average total payment, including retroactive lump sum payments, was about $210,000.