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Federal prosecutors charged “MTA Overtime King” Thomas Caputo, a Holbrook resident, and four others on Thursday, Dec. 3 for an “extraordinary” scheme that saw all five being paid while at home, on vacation, or doing other things besides being on the job.
Along with Caputo, Levittown resident Joseph Ruzzo, Rocky Point resident John Nugent, Blue Point resident Joseph Balestra, and Manalapan, N.J. resident Michael Gunderson are also facing a host of charges for a scheme prosecutors called “incredibly blatant.”
Acting U.S. Attorney Audrey Strauss said each of the co-conspirators schemed to fraudulently receive thousands of dollars in compensation from the MTA by falsely claiming to have worked hundreds of voluntary overtime hours - and in the case of Gundersen some regular work hours as well - that in fact, they did not work.
The overtime pay the five men put in for led to them becoming among the highest-paid MTA employees, with Caputo being its top earner in 2018, when he earned a total of $461,000, including $344,000 in overtime.
Each man was paid more than $240,000 in overtime that year, prosecutors said.
“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 Sweeney said.
“The others weren’t far behind, collectively earning more than $1 million in overtime pay,” he added. “This type of double-dealing directly contributes to rising MTA fares for the average, hardworking commuter.”
It is alleged the men would frequently volunteer for overtime and they claimed to have been working lucrative overtime shifts at times when they were at home or at other non-work locations, such as, in the case of Caputo, a bowling alley, or in the case of Gundersen, on vacation with his family.
MTA Inspector General Carolyn Pokorny was critical of the five men, and called on the organization to better monitor employees to ensure they’re actually on the job when they clock in.
“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,” she 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.
Caputo was an LIRR employee responsible for track inspection until he retired on or about April 1, 2019.
Ruzzo, who retired on or about Oct. 1, 2019, and Nugent and Balestra, who are still employed, were all LIRR foremen during the scheme.
Gundersen was a longtime employee of the New York City Transit Authority.
Pokorny added that “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,” she concluded.
Gundersen, 42, Caputo, 56, Ruzzo, 56, Nugent, and Balestra, 51 were each charged with one count of federal program fraud. If convicted, they will face up to 10 years in prison.
“These defendants, senior employees, allegedly made themselves some of the highest-paid employees at the entire MTA by claiming extraordinary, almost physically impossible, amounts of overtime,” 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.”
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