From WGRZ-TV story by Scott Brown:

Buffalo Mayor Byron Brown said he was "shocked" when he learned of an alleged massive overtime scam by some city firefighters.

According to the city, the scam would involve three firefighters working in concert with each other. Here's how the alleged scam worked:

Firefighter 1 would call in sick even though he wasn't. That would then create an overtime opportunity, at time and a half, for someone at his or her firehouse.

Firefighter 2 would then accept the overtime, but rather than work the shift, he or she would then turn around and sell the shift to Firefighter number 3.

Firefighter 3 would then kick back money under the table to firefighter 2.

The city discovered the alleged scam when a number of firefighters admitted to buying and selling shifts during an arbitration hearing at City Hall.

2 On Your Side obtained obtained a copy of the transcript from that hearing.

One firefighter was asked:

"Did you ever pay for a shift?"

He answered "I paid for about 20 or 30 times, depends on what's available."

Question: 'What are the standard rates for shifts?"

Answer "About $165 for days and $270 for nights."

Question: "Do you have any records of people you have paid?"

"No," he answered.

Another firefighter at the hearing was asked:

"Have you ever received money for an overtime swap"

Answer: "About $250."

A third firefighter testified:

"It's a brotherhood. In some way everyone gets paid."

When asked about record keeping, the firefighter tapped his head and said "it's all in here."

2 On Your Side's Scott Brown spoke with the head of the firefighters union about this:

Scott Brown: "Clearly it seems like there's money being passed back and forth?"

Union President Dan Cunningham: "If that's what the transcript showed, then obviously the firefighter was telling the truth."

Scott Brown: "To your knowledge, do firefighters call in sick when they're not sick?"

Dan Cunningham: "No they do not. I'm not a doctor, but no they do not as far as I know."

Scott Brown: "The payments being made by the firefighters, I'm going to say under the table, do you know whether they're being reported on their tax forms?"

Dan Cunningham: "I have no idea. I don't know if they report it, I'm not their tax person."

The city has turned its findings over to state and federal law enforcement officials.

In asking them to investigate the alleged scam, the city charges that "firefighters are engaged in a practice of abusing and gaming the overtime pay…in order to pad or spike pension benefits for the union's most senior members" before they retire.

Scott Brown: "The city is alleging that firefighters are gaming the system."

Dan Cunningham: "I take exception to that comment, that statement, nobody has gamed the system. People are not calling in sick to create overtime, show me who's been brought up on charges and disciplined for doing that."

Scott Brown: "Any idea what you estimate the alleged scam has cost taxpayers?"

Mayor Byron Brown: "We calculate this could have cost city taxpayers hundreds of thousands of dollars for each year this is done. It's a great deal of money, it's money that taxpayers shouldn't be paying. If someone calls in sick and they're not actually sick that is wrong."

According to city records, overtime in the fire department went from $4.8 million to $10 million in 2008 and it was that year that the city says it discovered a substantial amount of overtime going to a small group of firefighters.

Scott Brown: "From 2006 to 2008 overtime jumped by 100 percent, why was that?"

Dan Cunningham: "We have 29 fire companies – each piece of apparatus that goes out the door has to be manned with four men if one of those guys was off sick, injured, personal leave day, jury duty he has to be replaced. When you are short 170 guys during that period of time, and if you don't have anybody to replace them, is your overtime going to go up?"

Scott Brown:" Mr. Cunningham says at times the city has been 170 people short within the department?"

Mayor Byron Brown: "He is woefully misinformed. At any given time because of retirements, there will be vacancies, but those vacancies over the last seven or eight years average 20 or 30 vacant positions."

And according to city records, over the last six years the fire department has averaged about 28 vacancies a year.

Scott Brown: "Would like to see criminal charges filed against some of these firefighters?"

Mayor Byron Brown: "I would like to see the practice ended immediately and firefighters who have engaged in this type of practice pay some sort of reimbursement to the taxpayers of this community."

Scott Brown: "And what about charges, or kicking them off the force?"

Mayor Byron Brown: "I personally think that would be for law enforcement to decide."

Scott Brown: "Some people watching this may say the mayor doesn't respect or like firefighters?"

Mayor Byron Brown: "I have the utmost respect for our firefighters- they do difficult and dangerous jobs. Everyday when the bell rings at that firehouse they put their lives on the line for the members of this community. But at the same time, they need to conduct themselves- those that are engaged in this practice – and I would like to think it is a few rather than the majority – they need to conduct themselves in the highest level of integrity because the public depends on them."

Scott Brown: "Do you think the city's allegations hold water?"

Dan Cunningham: "I believe under past practices our members had the right to accept or reject overtime, or ask somebody else if they were interested in working."

Scott Brown: "Are you saying this practice of buying and selling shifts was going on for decades?"

Dan Cunningham: "Yes, three or four or five decades.

The arbitrator ruled that the swapping of shifts was illegal, and in February of this year Commissioner Garnell Whitfield issued an order stating that "there shall be no swapping of overtime…Any member accepting overtime shall report for duty or be considered AWOL."

Scott Brown: "I got to say Dan, people watching this are going to say this is a scam, guys are selling shifts to each other."

Dan Cunningham: "The arbitration hearing says that is no longer legal to do it. Nobody's doing it, nobody's doing it. But in the past it was a legal practice going back 40 years, so I tip my hat to Commissioner Whitfield and the mayor – if that's what they believe they can stop the members from making more money and increasing their pensions that's good for the taxpayers."