Judge: LIRR employee engaged in a 'feeding frenzy' of overtime fraud
A federal judge in Manhattan Friday said a Holbrook man engaged in a "feeding frenzy of overtime fraud," billing the Long Island Rail Road for tens of thousands of dollars in wages he did not earn, as he sentenced him to eight months in prison.
Retired MTA employee Thomas Caputo, 57, who pleaded guilty last year to conspiracy to commit federal program fraud, billed the LIRR for more than $340,000 in overtime in 2018, on top of his nearly $120,000 salary, making him the agency’s highest paid employee that year.
While some overtime appears legitimate, hundreds, if not thousands, of billed hours were bogus and occurred while Caputo, then the LIRR's chief measurement operator, was bowling, at home with family or sleeping, officials said.
U.S. District Judge Paul Engelmayer excoriated Caputo for stealing from taxpayers for more than a year. Caputo claimed to have worked approximately 3,864 overtime hours, on top of 1,682 regular hours in 2018.
"The amount of overtime you claimed was eye-popping, bordering on impossibility," Engelmayer said as he imposed a stiffer sentence than two other co-conspirators who billed significantly less in fraudulent overtime.
Engelmayer previously sentenced John Nugent of Rocky Point and Joseph Balestra of Blue Point to five and three months in prison respectively.
The sentencing guidelines called for a term of 10-16 months for Caputo but Engelmayer gave him credit for his clean criminal record and dozens of letters of support from family and co-workers.
A divorced father of three, Caputo will surrender for prison on March 18 and will serve eight months behind bars at a low-security federal prison, followed by three years of supervised release, including six months of home confinement.
He must pay nearly $19,000 in restitution — representing only the amount of overtime prosecutors could prove were fraudulent through credit card statements and cellphone records, although both sides acknowledged the number is higher.
Caputo would often put his cellphone in a Faraday bag that blocked GPS signals, preventing authorities, and the LIRR, from detecting his whereabouts, prosecutors said.
"It was an extraordinary amount of blatant disregard" for the LIRR's rules, said assistant U.S. Attorney Paul Monteleoni.
Caputo acknowledged that he let down his family and his employer of nearly three decades.
"There’s no excuse for what I did," Caputo said in court. "It was a huge mistake and I regret it. This is not who I am."
Caputo, who retired in April 2019, was the highest paid employee of the MTA in 2018, making more money than the organization’s chairman. He made $461,000 — $117,00 in base salary and $344,000 in overtime, according to officials. The increased wages padded Caputo's pension, which he is allowed to keep.
Federal prosecutors said to honestly earn that amount of money, Caputo would have had to work every single day, including weekends and holidays, plus 10 hours of overtime each day, in addition to his regular 40-hour week.
"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," said Damian Williams, U.S. Attorney for the Southern District of New York.
The defendants volunteered for overtime, which was granted on a seniority basis, for a private construction project at Hudson Yards in Manhattan and for the East Side Access project, officials said.
According to a witness statement, included in Caputo's sentencing memo, the defendant told a colleague that he was "going to [expletive] the LIRR and make as much money as I can before I retire."
As part of the scheme, the defendants repeatedly covered for one another’s absences, prosecutors said.
"It was brazen. It was unnecessary," said James Kousouros, Caputo’s defense attorney, calling his client a "good and productive man" who had fallen victim to greed.
Kousouros said the LIRR was also culpable, arguing that management was aware that employees were bilking the overtime system.
"The LIRR created this culture and put the template out there," he said. "And Thomas is going to prison because he took the bait."
MTA spokesman Tim Minton said the agency has taken steps to better control overtime.
"This abuse of trust was outrageous and justice has now been served," Minton said of Caputo.
In 2019, the MTA established an Overtime Task Force aimed at reducing overtime costs, and preventing fraud and abuse. The task force has adopted several reforms, including by regularly auditing high overtime earners. But it also has been criticized for being slow to implement other reforms, including a plan to have all employees use biometric time clocks to verify their time and attendance.
"We deeply appreciate the ongoing efforts of our law enforcement partners at the U.S. Attorney’s office," said Acting MTA Inspector General Elizabeth Keating. "We plan to remain vigilant, and will continue to pursue unscrupulous individuals who seek to steal from the MTA and the people of New York."
Three other defendants, Frank Pizzonia of Howard Beach; Joseph Ruzzo, 56, of Levittown and Michael Gundersen, of Manalapan, New Jersey still await sentencing.
With Alfonso A. Castillo
Robert Brodsky is a breaking news reporter who has worked at Newsday since 2011. He is a Queens College and American University alum.
'Ridiculous tickets that are illogical' A Newsday investigation shows that about 70% of tickets issued by Suffolk County for school bus camera violations in 2023 took place on roads that students don't cross. NewsdayTV's Virginia Huie reports.
'Ridiculous tickets that are illogical' A Newsday investigation shows that about 70% of tickets issued by Suffolk County for school bus camera violations in 2023 took place on roads that students don't cross. NewsdayTV's Virginia Huie reports.
