Manalapan Man, 4 Others Face Charges In MTA Fraud Scheme: Feds

MANALAPAN, NJ - A Manalapan man is facing fraud charges after allegedly claiming to be working overtime shifts and being paid while at home or on family vacations, authorities announced Thursday.

Longtime NYC Transit employee Michael Gundersen, 42, of Manalapan, was charged this week with one count of federal program fraud. Prosecutors say Gundersen was paid over $240,000 in overtime alone, putting him within the top 12 highest paid employees at the Metropolitan Transit Authority in 2018. These payments were based on reported amounts of overtime hours ranging from 2,918 to 3,914, which if the defendant 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 weeks.

Authorities also say Gundersen claimed to have worked back-to-back overtime shifts from 4 a.m. on Sept. 29, 2018 to 12 a.m. on Sept. 30, 2018, and was paid for 20 hours of overtime during that time frame. Gundersen did not use any vacation time for this period, instead claiming in his time reports to be at work.

According to the complaint, Gundersen later sent himself an email attaching photographs taken at a farm in Manalapan with his family with metadata showing the images were taken at 3:05, 3:28, and 3:30 p.m. on September 29, 2018 – i.e., in the middle of the shifts he claimed to be working.

Gundersen’s telephone records also show that he engaged in two phone calls in or around Manalapan at 1:09 p.m. and 4:07 p.m. on Sept. 29, 2018, also in the middle of the overtime shifts he claimed to have worked.

Alongside Thomas Caputo, 56, of Holbrook, New York, Joseph Ruzzo, 56, of Levittown, New York, John Nugent, 50, of Rocky Point, New York and Joseph Balestra, 51, of Blue Point, New York, Gundersen, was charged with one count of federal program fraud, which carries a maximum sentence of 10 years in prison.

“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 in a statement.

“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.”

In a statement per ABC.com, Anthony Simon, the general chairman of the SMART Transportation Division, the L.I.R.R.’s largest union, defended the current and former employees:

“These accusations of overtime abuse and the pending investigations are approaching 2 years old. If a few workers have been pulled out of this investigation they have every right to the process to defend the accusations. They have worked tirelessly throughout these difficult times and are innocent until proven otherwise.”