They went bowling for dollars, and wound up striking out.
Five MTA employees are accused of raking in more overtime than authority Chairman Pat Foye himself, with many of them were bowling, sitting at home or on vacation while illegally logging paid hours, federal prosecutors announced Thursday.
The Southern District contests that the defendants, Thomas Caputo, Joseph Ruzzo, John Nugent, Michael Gundersen and Joseph Balestra, were some of the highest paid employees in the MTA.
Caputo made $461,000 in 2018, according to the court, while the other three came away with over $240,000 in the same year. By contrast, Foye makes $347,707 a year as the MTA’s highest-ranking official.
“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 U.S. Attorney Audrey Strauss said. “As alleged, those almost impossible claims were fueled by brazen, repeated fraud, including falsely claiming to be working overtime hours while the defendants were at their homes or, in some instances, bowling. All New Yorkers ultimately bear the burden of fraud targeting our mass transit systems, and we will continue to work tirelessly to expose and prosecute those who engage in it. Our investigation remains ongoing.”
The defendant, apart from Gundersen, were all Long Island Rail Road employees serving as foremen and track inspectors. Caputo took his retirement in April 2019 followed by Ruzzo in October of that year. Gundersen worked for New York City Transit as a maintenance supervisor.
The overtime shifts worked by the five men were both voluntary and requested, something the MTA’s union contract offered based on seniority, according to the court. Caputo’s base pay and other forms of compensation amounted to $117,000 alone.
Caputo had claimed 3,864 overtime hours on top of 1,682 regular hours for all of 2018 meaning he would need to be working 10 hours of overtime every day for the entire year. Instead, prosecutors say phone records indicate he was near his home in Suffolk County during his over time shift in Manhattan’s West Side Yard on Oct. 11, 2018.
Later that day, bowling alley records Suffolk show he was competing in a league game.
“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,” FBI Assistant Director William F. Sweeney Jr. said. “The others weren’t far behind, collectively earning more than $1 million in overtime pay. This type of double-dealing directly contributes to rising MTA fares for the average, hardworking commuter.”
According to the MTA, a number of actions have been taken to prevent further abuse by employees in the future:
- Improved Overtime Spending Controls – Constraints implemented in 2019 to better utilize “controllable” overtime and ensure usage is fiscally responsible were expected to lower overtime expense by $44 million annually beginning in 2020
- Overtime Dashboard – Electronic tool available to help managers control and reduce costs
- Additional Oversight – Operating agencies holding weekly meetings to monitor Kronos swiping in the field and reviewing monthly operating/overtime results with senior staff
- Additional Guidance – Establishing pre-approval forms and providing managers with specific categories meriting OT
“The alleged conduct by these MTA employees is an egregious betrayal of public trust,” MTA spokesman Tim Minton said. “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.”
The MTA also has motions in the November financial plan that implements better control of overtime, something that their own Inspector General has pushed for.
“These employees allegedly worked very hard – to steal MTA time and money, ignoring their duty to keep the tracks and rails safe for their fellow workers and riders,” MTA Inspector General Carolyn Pokorny said. “For MTA employees who earn hundreds of thousands of dollars a year, it takes some nerve to steal overtime by only working a fraction of your shift – if at all. The situation underscores what our Office has been saying, again and again – the lack of management systems and controls at the MTA creates an environment where fraud could easily occur undetected – and it did, as alleged in these criminal complaints. When employees are on the clock, management needs to know that they are actually working, and not – say, enjoying concerts in Atlantic City, vacationing at resorts, or competing in a bowling league.”
Caputo, 56, of Holbrook; Ruzzo, 56, of Levittown; Nugent, 50, of Rocky Point; Balestra, 51, of Blue Point; and Gundersen, 42, of Manalapan, New Jersey, were each charged with one count of federal program fraud.
Each defendant faces 10 years of prison time for their alleged actions.
