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Date: 02-06-2022
Case Style:
Case Number: 1:20-cr-00645-PAE
Judge: Paul A. Engelmayer
Court: United States District Court for the Southern District of New York (New York County)
Plaintiff's Attorney: United States Attorney’s Office
Defendant's Attorney:
Description: New York, New York criminal defense lawyer represented Defendant charged with conspiracy to defraud the United States.
Thomas Caputo, a longtime employee of the Long Island Rail Road (“LIRR”) who in 2018 was the highest paid employee of the entire Metropolitan Transportation Authority (“MTA”) due to extraordinarily high volumes of overtime pay, was found guilty of conspiring to commit federal program fraud by submitting time reports falsely claiming to have worked hundreds of hours of overtime that he did not in fact work, including for time he spent participating in a bowling league. CAPUTO previously pled guilty on August 26, 2021. Others were also indicted, convicted and sentenced two of CAPUTO’s coconspirators, JOHN NUGENT, and JOSEPH BALESTRA, to terms of imprisonment for their participation in the scheme. NUGENT, who pled guilty on July 27, 2021, was sentenced on November 4, 2021 to a five-month term of imprisonment. BALESTRA, who pled guilty on September 14, 2021, was sentenced on January 4, 2022 to a three-month term of imprisonment.
U.S. Attorney Damian Williams said: “The sentences the court imposed on the participants in this egregious overtime fraud scheme send a clear message: If you commit overtime fraud, you will go to prison. The public expects that public employees will show up and receive honest pay for an honest day’s work, not line their pockets with double-time or time-and-a-half pay while out bowling.”
In sentencing CAPUTO’s codefendant NUGENT, Judge Engelmayer remarked that the defendant participated in “an orgy of overtime fraud that was carried out on an epic scale,” and remarked that “Just punishment requires a substantial sentence including real prison time” and that “The message has to be, if you get caught faking overtime, there will be significant consequences and you will spend time in prison.”
According to the allegations in the Complaint and Indictment filed in federal court, and the statements made in connection with the sentencings of CAPUTO, NUGENT, and BALESTRA and the prosecution of coconspirators JOSEPH RUZZO and FRANK PIZZONIA:
CAPUTO, RUZZO, NUGENT, BALESTRA, and PIZZONIA schemed to fraudulently receive thousands of dollars in compensation from the MTA by falsely claiming to have worked hundreds of voluntary overtime hours that in fact they did not work. The overtime pay the defendants claimed led to significant increases in their salary and led to them being among the highest-paid MTA employees, and in the case of CAPUTO, the highest-paid MTA employee in 2018. The defendants frequently volunteered for overtime and then claimed to have been working lucrative overtime shifts at times when they were in fact at home or at other non-work locations, such as, in the case of CAPUTO, a bowling alley.
The Defendants’ Employment at the MTA
The MTA runs North America’s largest transportation network, providing bus, subway and rail service to a population of more than 15 million people in New York City and the surrounding areas. The MTA’s operating agencies include the LIRR, a commuter railroad providing service between Manhattan and locations on Long Island.
CAPUTO, RUZZO, NUGENT, BALESTRA, and PIZZONIA are current or former LIRR employees. CAPUTO was an LIRR employee responsible for track inspection, RUZZO, NUGENT, and BALESTRA were all LIRR foremen, and PIZZONIA is an LIRR track worker.
In addition to their regular duties, CAPUTO, RUZZO, NUGENT, BALESTRA, and PIZZONIA 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 CAPUTO, RUZZO, NUGENT, BALESTRA, and PIZZONIA to be assigned large numbers of voluntary overtime shifts due to their seniority.
At all relevant times, CAPUTO, RUZZO, NUGENT, BALESTRA, and PIZZONIA received hourly rates for their regular schedule, and were then entitled to be paid higher “overtime” rates – typically one and a half or two times the regular hourly rate, depending on the circumstances – for additional hours worked. At all relevant times, CAPUTO, RUZZO, NUGENT, and BALESTRA were required to self-report their time.
The Defendants’ Excessive Overtime Claims and Frequent Absences from Work
In 2018, CAPUTO was paid approximately $461,000 by the MTA. Of that amount, approximately $117,000 comprised his base salary and other forms of compensation apart from overtime, while the additional approximately $344,000 was paid for overtime that CAPUTO ostensibly worked. In total, this made CAPUTO the highest paid employee at the MTA during 2018 – higher than, for example, the Chairman of the MTA.
In 2018, CAPUTO claimed to have worked approximately 3,864 overtime hours, on top of 1,682 regular hours. That is, if CAPUTO had worked every single calendar day in 2018 including weekends and holidays (although he did not), that would average out to approximately 10 hours of overtime every day for an entire year in addition to his regular, 40-hour work week.
Similarly, RUZZO, NUGENT, BALESTRA, and PIZZONIA also claimed to have worked and were paid for an excessive number of overtime hours in 2018. Each of them was paid over $200,000 in overtime alone, putting each of them within the top 30 highest paid employees at the MTA during 2018. These payments were based on reported amounts of overtime hours ranging from 2,918 to 3,914, which if the defendants had worked every calendar day in 2018 would average out to approximately 8 to 10 hours for every single day, in addition to the employee’s regular 40-hour work week.
The defendants’ claimed overtime, however, was inflated by numerous hours in which the defendants claimed to be at work but in fact were absent without authorization. Staffers from the Office of the MTA Inspector General (“MTA OIG”) worked with criminal investigators to perform a detailed review of the hours claimed to have been worked by the defendants in or around calendar year 2018. This investigation, among other things, compared the time records for CAPUTO, RUZZO, NUGENT, BALESTRA, and PIZZONIA 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, and 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.
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In addition to the prison sentences, CAPUTO, 56, of Holbrook, New York, was sentenced to three years of supervised release with six months of home confinement and 200 hours of community service; NUGENT, 50, of Rocky Point, New York, was sentenced to three years of supervised release with five months of home confinement and 200 hours of community service; and BALESTRA, 51, of Blue Point, New York, was sentenced to three years of supervised release with three months of home confinement and 200 hours of community service, and all were ordered to pay restitution in the amount of $109,641.74.
Mr. Williams praised the FBI and the MTA-OIG for their outstanding investigative work on this case.
This case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Paul M. Monteleoni, Thomas A. McKay, and Aline R. Flodr, are in charge of the prosecution.
18:371.F CONSPIRACY TO DEFRAUD THE UNITED STATES
(1)
Outcome: Defendant was sentenced to imprisonment for a total term of Eight Months. Supervised release for a term of Three Years. The first six (6) months of supervised release shall be served under a term of home detention, as monitored by the Probation Department
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Defendant's Experts:
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