Fraud Prevention and Detection 

Albert Davenport, Supervisory Special Agent

Office of Inspector General 

for the Railroad Retirement Board
Railroad Retirement Board

 The Railroad Retirement Board’s 

(RRB) mission statement emphasizes 

paying “benefits to the right people, 

in the right amounts, in a timely 

manner” and taking appropriation 

action to safeguard customers’ trust 

funds. 
Railroad Retirement Board Cont.

 During fiscal year 2020, the RRB paid 

about $13.6 billion in benefits, net of 

recoveries and offsetting collections, 

to roughly 570,000 beneficiaries.

 RRB’s benefit paying programs are 

codified under the Railroad 

Retirement Act (RRA) and the 

Railroad Unemployment Insurance 

Act (RUIA).
Office of Inspector General 

 The RRB’s first Inspector General 

(IG) was appointed in 1986. 

 RRB’s Inspector General is a 

Presidential Appointee, with Senate 

confirmation. 

 Office of Inspector General (OIG) is 

an independent and objective office 
Office of Inspector General Cont.

 The OIG’s responsibilities:

 Promote economy, efficiency and 

effectiveness in RRB’s programs and 

operations and 

 Prevent and detect fraud, waste and 

abuse. 
Office of Inspector General Cont.

 OIG Reporting Responsibilities: 

informs the RRB and Congress about 

problems and deficiencies the RRB 

programs and necessity and progress 

of corrective action.
Office of Inspector General Cont.

 The OIG has three operational 

components: the immediate Office 

of the Inspector General, the Office 

of Audit, and the Office of 

Investigations. 
OIG’s Mission Statement

 The OIG promotes economy, 

efficiency, and effectiveness in the 

RRB’s programs and operations by 

focusing audit and investigative 

efforts on protecting the integrity of 

the RRB’s trust funds and improving 

the delivery of benefits to the railroad 

community.
Office of Audit

 The Office of Audit (OA) conducts 

financial, performance, and 

compliance audits and evaluations of 

RRB programs and operations. 
Office of Audit Cont.

 In addition to focusing on mandated 

audit requirements, OA strategically 

identifies areas affecting program 

performance, the efficiency and 

effectiveness of agency operations, 

and areas of potential fraud, waste, 

and abuse.
Office of Audit Cont.

 OA recently published reports 

regarding:

– RRB’s financial statements;

– RRB’s CARES Act benefit payments;

– management and performance 

challenges facing the RRB; and

– Payment Integrity Information Act 

compliance.
Office of Investigations

 The Office of Investigations (OI) 

focuses its efforts on identifying, 

investigating, and presenting RRB 

benefit fraud cases for prosecution.
Fiscal Year 2020 

Investigative Accomplishments

– 17 indictments/informations;

– 25 convictions;

– 14 civil judgments;

–more than $14.8 million in financial 

accomplishments (which includes 

amounts recovered from jointly 

worked cases).
Investigative Caseload 

 As of March 31, 2021, OI’s caseload 

totaled 271 matters. This represents 

more than $522 million in potential 

fraud losses including overall 

government loss from OI’s joint case 

work.
Caseload by Case Type 

as of March 31, 2021

UnemploymentSickness

18%

Railroad 

Medicare

23% Disability

42%

RetirementSurvivor

14%

Other 

3%
Fraud Prevention

 Prevention is key - prevent improper 

payments from going out the door in 

the first place. 

 Proper controls should be put in 

place upfront.

– What controls are in place? An 

Inspector General? Auditors? A fraud 

referral hotline? Policies/Procedures? 
Identify Systemic Weaknesses or 

Vulnerabilities

 Report and respond to any 

weaknesses or vulnerabilities 

detected in your program.

– Identify the weakness or vulnerability. 

Why and how did it happen? 

– How does it impact program integrity?

– What is the best way to legally close the 

loophole?
Systemic Weaknesses or 

Vulnerabilities Cont.

 For Example:

– Identified Weakness/Vulnerability: 

Railroad employee improperly received 

occupational disability benefits.

– How did it happen: Applicant provided 

false information about the difficulties 

of their job duties to obtain benefits.
Systemic Weaknesses or 

Vulnerabilities Cont.

 Solution: 

– Ask follow up questions to the 

applicant.

– Question anything that does not look 

right.

– Encourage employers to verify job 

duties that were reported by the 

applicant. 
Types of Fraud We See

 Disability 

– Applicant submits false information.

– Disability annuitant working while 

collecting disability payments. 

 Unemployment/Sickness

– Claimant working while collecting 

benefits.
Types of Fraud We See Cont. 

 Retirement/Survivor

– Annuitant fails to report information to 

the RRB that may disqualify them from 

receiving benefits.

– Instances of theft and/or fraudulent 

receipt of retirement benefit checks by 

someone other than the authorized RRB 

annuitant.
Types of Fraud We See Cont.

 Representative Payee

– Representative payee misappropriating 

RRB benefits for their own personal 

gain. 

 Railroad Medicare

– Physicians billing for services not 

rendered or billing for a higher service 

than performed (upcoding).
Long Island Rail Road Prosecution

 Massive fraud scheme perpetrated 

by former LIRR employees, doctors, 

and disability facilitators.

 Conspiracy between employees, 

doctors, and facilitators to falsify 

RRB disability applications.

 Joint investigation with the FBI.
LIRR Cont.

 Thirty-three individuals were indicted 

by the U.S. Attorney’s Office for the 

Southern District of New York. 

 Twenty-eight individuals pleaded 

guilty and five were convicted at trial. 
LIRR Cont.

 Federal sentences imposed totaled:

– 544 months of prison, 

– 594 months of probation, 

– 456 months of supervised release, 

– 57 months of home confinement, 

– 300 hours of community service, and 

– approximately $614 million in 

restitution, forfeiture, and fines. 
 On May 26, 2021, the U.S. Attorney’s 

Office for the Northern District of 

Illinois announced indictments 

against six former railroad 

employees for alleged disability 

fraud. 

 These indictments represent the 

initial phase of our ongoing 

investigation. 

Recent Disability Indictments
RRB’s Occupational Disability 

Application Outcomes 1/18 – 3/21

98%

2%

Granted, 3254 Denied, 63
Deterring Fraud is Everyone’s Job

 Employers play an important role in 

fraud prevention.

 Fraud prevention should be a priority 

and should be incorporated into staff 

training.

 Explain RRB program criteria, rules, 

and regulations to your employees. 
Deterring Fraud is Everyone’s Job 

Cont.

 Stress the importance of due 

diligence.

 Explain the consequences of 

submitting false statements to the 

RRB (criminal, civil, and 

administrative).
Deterring Fraud is Everyone’s Job 

Cont.

 Contact supervisor and/or RRB-OIG if 

something just does not seem right.

 RRB-OIG

– Hotline: (800) 772- 4259

– hotline@oig.rrb.gov
Responsiveness May Prevent or 

Deter Fraud

 The RRB reports that from January 

2021 through May 2021, more than 

50 percent of occupational disability 

applications were adjudicated 

without vocational information from 

employers.

 Accurate job duties are critical to 

occupational disability decisions. 
Responsiveness May Prevent 

Fraud Cont.

 Employer responsiveness is crucial 

to program integrity. 

 It is important to have meaningful 

safeguards in place - you could make 

a real difference!
Responsiveness May Prevent 

Fraud Cont.

 Some railroad employers expressed 

interest in receiving the actual 

vocational information submitted by 

the applicant. 

 This simple change would provide 

useful information to the employers 

and would also act as a deterrent 

against false claims. 
Contact Information

Office of Inspector General for the 

Railroad Retirement Board

Hotline: (800) 772- 4259

hotline@oig.rrb.gov