N. Merrick F.D. commish convicted in LIRR fraud case

Michael Costanza faces up to 55 years in prison


A federal jury Thursday convicted Michael Costanza, 60, of Merrick, a retired Long Island Rail Road transportation manager and North Merrick Fire Department commissioner, of fraud and conspiracy to commit fraud. Costanza now faces a maximum of 55 years in prison.

The jury delivered its verdict after a two-week trial and three days of deliberation in the U.S. District Court for the Southern District of New York, in downtown Manhattan. The jury also convicted Frederick Catalano Jr., another retired LIRR worker and co-defendant of Costanza’s, on fraud and conspiracy charges. Catalano faces a maximum of 75 years in prison.

Sentencing for both will be on Feb. 26, according to the office of the U.S. Attorney for the Southern District of New York.

Costanza retired from the LIRR in December 2003. The jury found that Costanza made false statements in January 2004 to the federal Railroad Retirement Board claiming he had become disabled on the job. He since drawn tens of thousands of dollars in disability payments.

Costanza’s lawyer, Peter Tomao, argued during the trial that Costanza’s disability claims were legitimate. The government introduced evidence and elicited witness testimony about Costanza’s golfing and firefighting activities in an attempt to demonstrate that his disability claims were bogus.

According to the office of Preet Bharara, the U.S. Attorney for the Southern District of New York, Costanza was among hundreds of individuals who participated in a “multi-year, systemic fraud to obtain RRB disability benefits.”

“Hundreds of LIRR retirees received RRB disability benefits to which they were not entitled,” stated a press release from Bharara’s office. “The foreseeable loss to the RRB disability funds — if the scheme had not been uncovered and all fraudulent claims had been paid out in full — would have exceeded approximately $1 billion.”

Dozens of individuals have so far been convicted or pleaded guilty to the LIRR fraud scheme. Costanza’s indictment described 2004, the year he filed his disability application, as the “peak” of the scheme. Eighty-eight percent of LIRR employees retiring that year obtained a RRB disability annuity, the indictment stated.

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