BOARD ORDER 13-33 -Page 5-

11.

As Dr. Ajemian admitted he provided false medical records in hundreds of cases,
the Board therefore finds that any application by any applicant of at least age 50 with
at least 20 years of creditable railroad service which includes medical evidence
supplied by Dr. Ajemian is invalid and must be re-filed.

ARTICLE III. DIRECTIONS TO AGENCY STAFF

1.

The Director of Programs shall review the claims of Long Island Rail Road
pension recipients who are currently receiving an annuity under the Railroad
Retirement Act on the basis of disability, and shall identify the claims filed at age 50
or later with 20 years of railroad service which considered medical evidence from Dr.
Ajemian. Disability annuities are converted to retirement annuities based on age when
the annuitant attains “full retirement age” as defined under the Social Security Act.

The Director of Programs shall notify each employee annuitant that pursuant to
this Order, the employee annuitant’s payment will end the last day of the month
following the third month following the date of the notice. Where the employee
annuitant has been determined to be entitled to Medicare, the employee annuitant shall
be notified that Medicare entitlement will end as well. Where a spouse annuity has been
awarded, the spouse annuitant shall be notified that payment will end with the month
the employee annuity payment ends.

The Director of Programs shall notify each employee annuitant that if he or she
believes that he or she is disabled or is otherwise eligible for an age and service
annuity, anew application may be filed. In a determination based on anew application,
the Director of Programs shall not consider any evidence furnished by Dr. Ajemian. All
benefit determinations will be made under the law on the basis of the new application,
except that an employee annuity applicant determined to have a “current connection”
as defined by the Railroad Retirement Act at the time of the initial application shall be
determined to have retained the current connection at the time a new application is filed
under this Order.


BOARD ORDER 13-33 -Page 4-

documents to the RRB which were material to the RRB’s adjudication process.
In fact, Ajemian’s fraudulent medical documentation formed the foundation of
the RRB’s decision to approve and pay these disability benefits. Since the RRB
approved and paid these benefits based upon the annuitants’ illegal actions, the
RRB must immediately terminate benefits (including Railroad Medicare
coverage, if applicable) for all annuitants whose disability awards were based
upon Ajemian’s fraudulent medical documentation.

It is imperative that the RRB take immediate action to terminate these benefits
because failure to act will cost the RRB approximately $2 million dollars (sic)
per month in improper benefits.

In a later memorandum to the Board dated April 1, 2013, the Inspector General stated:

10.

This memorandum reiterates, once again, my position that if [Dr.] Ajemian’s
name appears in any RRB disability application or on any supporting
documentation, the entire RRB disability application is tainted by Ajemian’s
admitted fraud and is nullified in its entirety regardless of any other additional
medical documentation by a different physician. It is my view that the benefits
must be terminated without exception.

On May 24, 2013, the District Court sentenced Dr. Ajemian to eight years for
conspiracy and health care fraud. The Board notes that Dr. Ajemian was ordered to
make restitution of $116.5 million. In the Statement by the Court Regarding the
Defendant’s Sentence, the Court noted that Dr. Ajemian engaged in the charged
offenses for more than 10 years, from 1997 to 2008. Dr. Ajemian submitted medical
reports compiled for each claimant over a period of time during which he performed
unnecessary or bogus medical tests and fabricated treatments and narrative paper work,
all pre-planned and packaged to justify what essentially amounted to a predetermined
recommendation that the employee was disabled.

Section 5 of the Railroad Retirement Act requires that an application for any
payment under the Act shall be made and filed in such manner and form as the Board
may prescribe.


BOARD ORDER 13-33 -Page 6-

4.

Without regard to whether the employee annuitant pursues an administrative
appeal of the termination of the disability annuity based on Dr. Ajemian’s evidence, or
files a new application based on current evidence, payments for months prior to the
month of termination of entitlement based upon the first application shall not be
reopened.

Where an employee annuitant has previously received a notice that his or her
disability annuity payment has terminated, and that annuitant (and any spouse whose
annuity entitlement has also been terminated pursuant to the employee annuitant’s
notice), requested reconsideration of the termination of payment, the Director of
Programs is to issue the notice described in paragraphs 3 and 4 of this Article as a
decision on the request for reconsideration. Where such an annuitant has not requested
reconsideration, the Director of Programs is to issue a new decision in accordance with
paragraphs 3 and 4 of this Article of this Order.

ARTICLE IV. DELEGATION OF AUTHORITY

The Director of Programs is authorized to issue such internal agency procedure and guidance
as necessary to implement this Order.

HEHEHE


THIS FORM 1S TO BE USED
ONLY BY THE SECRETARY
TO THE BOARD OR AS
OTHERWISE SPECIFICALLY
DIRECTED BY THE BOARD.

FORM NO. G-21 (9-83) TRANSCRIPT NO.

UNITED STATES OF AMERICA Special
RAILROAD RETIREMENT BOARD PAGE 1 OF PAGES

DATE TRANSCRIPT RELEASED

TRANSCRIPT OF BOARD ORDERS

I CERTIFY THAT THE FOLLOWING IS A TRUE AND CORRECT TRANSCRIPT

OF BOARD ORDER(S) NUMBERED __13~33,
ISSUED BY THE BOARD ON June 27, 2013

TA) ae Ee,
AR OMT ES

SECRETARY TO THE BOARD

BOARD ORDER 13-33

Termination of Disability Annuities
Awarded Based on Medical Evidence from Dr. Peter Ajemian

ARTICLE I. PURPOSE.

The Railroad Retirement Board (RRB) hereby establishes the policy set forth in this
Order to govern the adjudication of all disability annuities paid under section 2(a) of
the Railroad Retirement Act, where the decision that the applicant is disabled was
based in whole or in part upon evidence furnished by Dr. Peter Ajemian. The
purpose of this policy is to protect the Railroad Retirement Account from fraudulent
claims while ensuring payment of valid disability claims.

ARTICLE IL.

FINDINGS.

A. _ Insection 7 of the Railroad Retirement Act, Congress granted to the Railroad
Retirement Board all powers and duties necessary to administer the Railroad
Retirement Act. Congress declared in that provision that decisions by the Railroad
Retirement Board upon issues of law and fact relating to annuities shall not be subject
toreview by any other administrative or accounting officer, agent or employee of the
United States. Further, by incorporating section 5 of the Railroad Unemployment
Insurance Act, section 7 requires that findings of fact and conclusions of law of the
Board in the determination of any claim for benefits shall be binding and conclusive
for all purposes and upon ali such administrative or accounting officer, agent or
employee.



BOARD ORDER 13-33 -Page 2-

B. Pursuant to the authority granted by section 7 of the Railroad Retirement Act,
the Railroad Retirement Board makes the following findings of fact and conclusions
of law:

1. The Long Island Rail Road, a covered railroad employer under the Railroad
Retirement Act, had established a private pension plan for employees which provided
for early retirement with a full pension at age 50 with 20 years of Long Island Rail
Road service. This plan has subsequently been superseded by another. Long Island
Rail Road retirees under this subsequent plan are not subject to this Order.

2. A substantial number of Long Island Rail Road employees who retired under
the now replaced Long Island Rail Road pension plan also applied for an
occupational disability annuity under section 2(a)(1)(iv) of the Railroad Retirement
Act.

3. On October 27, 2011, the United States Attorney for the Southern District of
New York filed fraud charges against two physicians and one of their office
managers, two individuals (facilitators) acting as liaison between the physicians and
applicants for disability annuities under the Railroad Retirement Act, and seven
railroad retirement disability annuitants (including one of the physicians’ liaisons)
who were also recipients of Long Island Rail Road pensions. The U.S. Attorney
charged that the physicians, facilitators and disability annuitants falsely claimed to
be disabled at the time of early retirement under the Long Island Rail Road pension
plan in order to receive extra benefits to which they were not entitled. Additional
indictments were issued through September 2012, bringing the total number of
defendants to 32.

4. On May 22, 2012, the United States Attorney for the Southern District of New
York announced the creation of a Voluntary Disclosure and Disposition Program,
which was offered to former Long Island Rail Road employees who were awarded a
disability annuity under the Railroad Retirement Act. Employee annuitants who were
accepted into the Program by the U.S. Attorney were required to sign the following
statement:

I hereby attest that in connection with my application for Railroad
Retirement Board disability benefits, I or doctors or others on my behalf made
what I understood to be false and/or misleading statements with respect to my


BOARD ORDER 13-33 -Page 3-

health condition, ability to work, and/or my eligibility for RRB disability
benefits. I declare under penalty of perjury that my statements in this document
are true and correct, pursuant to Title 28, United States Code, Section 1746.

A total of 44 railroad retirement disability annuitants were accepted by the
U.S. Attorney into the Voluntary Disclosure and Disposition Program.

5. On May 22, 2012, the Railroad Retirement Board issued Board Order 12-29,
which set forth the processing of Agreements signed under the Voluntary Disclosure
Program. Pursuant to Board Order 12-29, a disability annuitant who signed an
Agreement was considered to have cancelled his or her disability application. Board
Order 12-29 considered that payments made under the cancelled application were
recovered by a compromise in exchange for information provided to the U.S. Attorney
by the annuitant.

6. Fourteen former Long Island Rail Road employees who have pled guilty to
making false statements regarding their abilities furnished medical evidence from Dr.
Ajemian to support their benefit claims.

Ts In the transcript testimony by Dr. Peter Ajemian in the guilty plea proceeding on
January 18, 2013, in the case entitled United States of America v. Peter Ajemian, U.S.
District Court, Southern District of New York, No. 11 Cr. 1091, Dr. Ajemian testified
under oath that sometime about 2002 he began seeing large numbers of employees of
the Long Island Rail Road, and during the period 2004 to 2008 he prepared narratives
reciting a medical basis for disability annuity claims when “in truth and in fact these
employees were not in fact disabled.”

8. In a memorandum addressed to the Board dated February 1, 2013, entitled
“Immediate Benefit Termination of Disability Annuitants Affiliated with Dr. Peter J.
Ajemian,” the Inspector General of the Railroad Retirement Board cited the unreported
case of United States of America v. Danny Joe Dillard, No. 10-2672,

(U. S. Court of Appeals, Eighth Circuit, August 3, 2011). The Inspector General
stated:

This opinion is relevant because [Dr.] Ajemian’s clients acted illegally by
causing to be submitted or knowingly submitting fraudulent medical