Pittston man pleads guilty to illegally receiving pay, retirement from railroad

Posted April 23, 2013, at 3:48 p.m.

BANGOR, Maine — A Pittston man Tuesday waived indictment and pleaded guilty in U.S. District Court to theft of government funds.

Gerald E. Bailey, 68, admitted that he was paid by one railroad while receiving retirement money from another. That is illegal under the Railroad Retirement Act.

A sentencing date has not been set.

Bailey retired from Springfield Terminal Railway on July 31, 2004, and began receiving a federal pension, according to the prosecution version of events to which he pleaded guilty. He was informed then that he would be ineligible for benefits for any month in which he performed railroad work.

Bailey used another person’s name and Social Security number when he worked for Maine Eastern Railroad, owned by the Morristown & Erie Railway, from Sept. 27, 2007, to Nov. 15, 2010, according to the prosecution version of events. During that time, he earned $60,000. He also received more than $83,000 in pension funds.

The former head of the Morristown, N.J.-based freight railway company and another employee were indicted last year in New Jersey for defrauding the state out of more than $800,000 in grants, according to the news site www.nj.com.

Gordon Fuller, 71, of Plainfield, N.J., and Willard Phillips, 60, of Langhorne, Pa., a former project manager, were indicted on charges of conspiracy, misconduct by a corporate official, theft by deception, submitting false contract payments claims and tampering with public records.

Over the course of eight years, the two men allegedly received more than $800,000 in reimbursement grants but did just $53,000 worth of work, according to a April 11, 2012, story posted at www.nj.com.

That case is pending.

The charge against Bailey came out of the investigation into Fuller, according to the U.S. attorney’s office.

Bailey faces up to 10 years in prison and a fine of up to $250,000. He also could be ordered to pay restitution to the pension fund.

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