Lieberman is accused of participating in the Social Security disability scam that prosecutors say netted him $175,000.
Investigators say Lieberman has been living in Florida, enjoying a jet ski and renting a waterfront mansion.
Prosecutors say he is one of more than 80 former cops, firefighters and correction officers who stole $21 million with fake claims. Investigators said the scam stretched back more than two decades, with the ex-officers and other workers collecting years' worth of benefits for citing mental health problems so severe that they couldn't work at all. The workers were coached on how to portray their problems, reporting that they were so psychologically damaged that they couldn't take care of themselves, prosecutors said.
Many of the officers legitimately had physical disabilities that would have entitled them to state disability pensions, but would not have entitled them to federal Social Security disability insurance, which requires a complete inability to work.
Internal Affairs Chief Charles Campisi said many of the officers exaggerated their psychological trauma to gain the Social Security benefits. Most claimed post-traumatic stress disorder and many said it was because of the Sept. 11 attacks, he said. The NYPD has no information that they weren't actually working after the terrorist attack, just that they overstated the effect, he said.
One of the defendants who said he couldn't work taught martial arts. Another former police officer who claimed he couldn't leave the house worked at a cannoli stand at a street festival. Another claimed depression so crippling that it kept him house-bound but was photographed aboard a Sea-Doo watercraft.
Many said they could not use a computer but had Facebook pages, Twitter handles and YouTube channels, prosecutors said.
"The brazenness is shocking," Manhattan District Attorney Cy Vance said.
More than 100 defendants were charged with crimes including grand larceny. Arraignments in the sweeping case began late Tuesday morning, with several of the defendants pleading not guilty and being released without bail.
(The Associated Press contributed to this report)