THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING

3 arrested in inquiry into fire pension abuse

US grand jury to continue look at disability cases

By Donovan Slack
Globe Staff / October 22, 2009

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Federal authorities charged two former Boston firefighters yesterday with faking career-ending injuries and charged a Fire Department clerk with lying under oath, the first arrests in an ongoing investigation of pension abuse in the Boston Fire Department.

One of the firefighters, 47-year-old Albert Arroyo, had competed as a bodybuilder six weeks after telling the department he had suffered a severe back injury by slipping at a neighborhood firehouse; the other firefighter, James Famolare, 65, said his back was seriously injured when he attempted to move a box of files while filling in for a day as the department’s chief of personnel.

The clerk, Erika Boylan, 31, is accused of lying to a grand jury about whether firefighters asked her to extend their tax-free injury pay by delaying the processing of their applications for accidental disability retirement.

The fraud investigation began 18 months ago after a series of Globe reports revealed that dozens of firefighters filed potentially fraudulent disability claims - often receiving higher pay because they said their injuries occurred while they were filling in for superiors.

Christina DiIorio-Sterling, spokeswoman for acting US Attorney Michael K. Loucks, would not comment on whether others might be charged, saying only, “It’s an ongoing investigation.’’

But Scott Harshbarger, a former state attorney general speaking generally about public corruption cases, said these arrests could lead to more if the defendants offer information implicating others.

“In these kinds of cases, I would be surprised if the very experienced prosecutors in the US attorney’s public corruption unit were not planning to explore fully what these defendants know,’’ said Harshbarger, a former chairman of a state pension reform committee.

Famolare, in his regular post as deputy chief of personnel, was a 39-year veteran responsible for overseeing accidental disability retirement applications. Boylan, who has worked in the department’s personnel division since 2004, also played a key role in processing the applications.

If convicted, Famolare and Arroyo face up to 20 years in prison and fines of up to $250,000 on each count of mail fraud. Famolare has been charged with six counts; Arroyo faces two. Boylan, if convicted of perjury and obstruction of justice, faces up to 15 years in prison. Boylan and Arroyo did not return messages seeking comment. A person who answered the phone at Famolare’s home hung up on a reporter seeking comment.

The three were arrested in the early morning yesterday, a day after a federal grand jury issued indictments in the case. They were booked and appeared in US District Court yesterday afternoon - Arroyo and Boylan together, followed by Famolare.

Mayor Thomas M. Menino said the city is continuing to cooperate with federal investigators.

“I hope it sends a loud message that we’re not going to tolerate this nonsense in the Fire Department anymore,’’ Menino said.

Fire Commissioner Roderick Fraser hailed the arrests as a step forward in his efforts to overhaul the Boston Fire Department. “I’m glad the federal government has joined this fight,’’ he said.

Between 2003 and 2008, 167 firefighters reported career-ending injuries while on the job. A majority said they were injured on the same day they were filling in for a supervisor, which qualified them for a pension based on the supervisors’ pay rate.

A state law passed this year, designed to overhaul the pension system, eliminates that so-called king-for-a-day provision.

The Globe first reported the abuses in two stories in January 2008 that were produced as part of an investigative reporting project at Northeastern University’s School of Journalism.

The reports disclosed that in recent years, 74 percent of all retiring firefighters in Boston had claimed career-ending on-the-job injuries, more than twice the rate of similarly sized cities. In addition, firefighters had managed to collect “injured pay’’ for months or even years in multiple cases in which their applications for disability retirements were delayed. Firefighters out on injury receive 100 percent of their salary tax-free, while those who retire on disability receive 70 percent, also tax-free, for life.

According to a federal grand jury indictment released yesterday, Boylan, the personnel clerk, testified under oath about delays of disability retirement applications. Boylan said she never delayed them and was never asked to, but the indictment says Boylan was asked “on at least one occasion to delay the processing of paperwork for a firefighter who had filed for accidental disability retirement.’’

Boylan was put on paid administrative leave yesterday pending the outcome of the case.

Arroyo reported on March 21, 2008, that he had slipped on a stairway and injured his back in an incident that no one witnessed in a firehouse where he wasn’t assigned to work. He went on injured leave, and within weeks, a doctor recommended him for an accidental disability pension, saying he was “totally and permanently disabled.’’

But three days after his initial injury report, the indictment says, Arroyo worked out at a Gold’s Gym, and on May 3, 2008, Arroyo placed eighth in the Pro Natural American bodybuilding championship. After the Globe published a video of the competition in July, the fire commissioner ordered Arroyo back to work. When he didn’t show up, Fraser fired Arroyo.

“In his application for disability retirement, Arroyo falsely stated that he had not participated in any sports or strenuous activities within the last year when in fact Arroyo had made numerous visits to various gyms during that one-year period and was then training, including weight lifting, for a May 2008 body building competition,’’ the indictment states.

Famolare told the department his back injury occurred in June 2006, when he moved a box of personnel files at headquarters. For the next two years, while his disability pension application languished, he collected the salary of a deputy chief - $155,000 a year tax free - without working.

His medical file disappeared from headquarters and a purported witness to his injury recanted. Prosecutors allege in the indictment that Famolare had to consult two doctors before finding one who would support his injury claim.

Famolare, aware that his injury claim was under investigation, abruptly withdrew his application for a disability pension in August 2008 and asked for a regular, taxable pension instead. In a letter to the city’s retirement board at the time, he said he was withdrawing his disability claim because he did not believe he could get a fair hearing.

Famolare and Arroyo were recommended for disability retirement by the same physician, Dr. John F. Mahoney, a Dorchester neurologist. Mahoney had also evaluated 25 other firefighters whose injuries he determined to be so severe that the city should award them accidental disability pensions, according to records obtained last year under a public records request.

Mahoney’s lawyer did not return a call seeking comment yesterday, but last year, in an interview, he said Mahoney had made the best determinations he could based on the information he was provided.

Donovan Slack can be reached at dslack@globe.com.