5 MTA workers charged with fraud, logged 'impossible' overtime

NEW YORK CITY (WABC) -- Five current and former MTA employees have been charged with fraud, accused of falsely claiming to have worked hundreds of hours of overtime.

The LIRR and NYC Transit workers were being paid while at home, on vacation, or bowling, federal prosecutors said Thursday.

"These defendants, senior LIRR and New York City Transit employees, allegedly made themselves some of the highest-paid employees at the entire MTA by claiming extraordinary, almost physically impossible, amounts of overtime," acting US Attorney Audrey Strauss said.

The defendants were identified as Thomas Caputo, Joseph Ruzzo, John Nugent, Joseph Balestra and Michael Gundersen. The FBI called their alleged scheme "incredibly blatant."

"In the case of at least one defendant, the excessive compensation he received from the MTA was equivalent to purportedly working 10 additional hours a day, every day, for 365 days," the FBI's Bill Sweeney said. "The others weren't far behind, collectively earning more than $1 million in overtime pay."

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In the case of Caputo, court records said he was paid approximately $461,000, most of it in claimed overtime, making him the highest paid employee at the MTA during 2018 -- higher than, for example, the chairman of the MTA.

The MTA Inspector General compared the time records for the defendants with various records that established their true whereabouts, such as location information for their cellular phones, bank records, MTA building access card data, work and personal emails, and social media records, as well as records from third parties such as a bowling alley where Caputo participated in bowling league games despite claiming to work an average of 10 hours of overtime every single day of 2018.

The men were each absent from work for hundreds of hours, for which they falsely claimed to have been present and worked in time reports submitted to the MTA, the criminal complaint said.

"We thank the FBI, Southern District of New York and MTA Inspector General for their diligent work on this matter," MTA spokesperson Tim Minton said. "The alleged conduct by these MTA employees is an egregious betrayal of public trust. The MTA has implemented a number of aggressive overtime controls that substantially increase oversight and accountability -- already resulting in a reduction of $105 million in overtime in 2019 alone and the implementation of a five-year plan to cut overtime costs by nearly $1 billion. We will continue to root out waste, fraud and abuse wherever it occurs and will continue cooperating fully with this critically important investigation."

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Caputo was an LIRR employee responsible for track inspection until he retired on or about April 1, 2019.

Ruzzo, who retired on or about October 1, 2019, and Nugent and Balestra, who are still employed, were all LIRR foremen during the relevant period.

In addition to their regular duties, Caputo, Ruzzo, Nugent and Balestra each volunteered to work and were assigned a number of lucrative overtime shifts during which they were required to, among other things, support third-party contractors working on construction projects on or around LIRR properties.

These voluntary overtime shifts were offered to LIRR employees in order of their seniority under the applicable union collective bargaining agreements, enabling the defendants to be assigned large numbers of voluntary overtime shifts due to their seniority.

Gundersen is a current NYC Transit employee as a Maintenance Supervisor Level II, which requires him to, among other things, provide managerial-level oversight and support of Third Rail Contract Compliance and Circuit Breakers.

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