N.Y. Restaurant Exec Served Prison Term for Disability Insurance Fraud

By | July 5, 2007

A reputed mob money adviser who was vice president of the restaurant company that runs the Rainbow Room in New York City has been sentenced to prison for cheating Social Security and three insurance companies out of more than $1 million by filing false disability claims.

Dennis Pappas, who was vice president of Cipriani USA, pleaded guilty May 2 to second-degree insurance fraud in a deal with prosecutors. The sentence of 11/2 to 41/2 years means Pappas will be eligible for parole in 18 months.

Pappas admitted that he falsely claimed he could not work because of heart problems and said he knew that “if I disclosed my work and payments from Cipriani I would not be entitled to the disability payments.”

Pappas said Cipriani paid him at least $900,000 during the time he worked there from June 2000 until April 2006. For almost that entire time, prosecutors said, he was carrying out his disability scams.

Manhattan State Supreme Court Justice James Yates said Pappas must repay are Custom Disability Solutions $639,000; Cigna Life Insurance Co. of New York $179,000; and Metropolitan Life Insurance Co. $109,000. Yates said the defendant must reimburse the Social Security Administration $90,000.

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