BANGOR, Maine — A Pittston man was sentenced Tuesday in U.S. District Court to three years of probation for theft of government funds.
Gerald E. Bailey, 69, admitted in April that he was paid by one railroad while receiving retirement money from another. That is illegal under the Railroad Retirement Act.
In addition to probation, U.S. District Judge John Woodcock ordered Bailey to pay more than $83,000 in restitution to his pension plan, according to information posted on the federal court’s electronic case filing system.
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.
The retired worker 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 court documents. 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 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.
Fuller was the manager of the company when Bailey worked illegally for Maine Eastern Railroad.
The charges against Fuller and Willard are pending, according to the New Jersey Attorney General’s Office in Trenton.
Bailey faced up to 10 years in prison and a fine of up to $250,000, as well as possibly paying restitution to the pension fund. Under the prevailing federal sentencing guidelines, Bailey faced between 10 and 16 months in prison, according to the U.S. Attorney’s Office.