Security News: Lexington Park Woman Sentenced To 30 Months In Federal Prison For Obtaining Over $1 Million In Fraudulent Disability Benefits

Source: United States Department of Justice News

Defendant Submitted Fraudulent Documents to the United States Department of Veterans Affairs and Social Security Administration

Greenbelt, Maryland – U.S. District Judge Paula Xinis sentenced Angela Marie Farr, age 36, of Lexington Park, Maryland, yesterday to 30 months in federal prison, followed by 3 years of supervised release, for conspiracy to commit theft of government property and for theft of government property, in connection with a scheme to obtain fraudulently disability benefits from the U.S. Department of Veterans Affairs (“VA”) and the Social Security Administration (“SSA”).  Judge Xinis also ordered Farr to forfeit an amount equal to the proceeds obtained as a result of the fraud by paying a money judgment of $475,751, and ordered Farr pay restitution in the full amount of the government’s losses, which is at least $1,010,702.

The sentence was announced by United States Attorney for the District of Maryland Erek L. Barron; Special Agent in Charge Kim R. Lampkins, U.S. Department of Veterans Affairs (VA) Office of Inspector General (OIG), Mid-Atlantic Field Office; and Special Agent in Charge Michael McGill of the Social Security Administration – Office of Inspector General (SSA-OIG), Philadelphia Field Division.

According to her guilty plea, Farr organized a conspiracy in which she submitted false and fraudulent documents to the VA in support of her disability compensation claims, as well as for the disability claims for her then-husband, Michael Vincent Pace, and for her father, Individual 1.  The fraudulent documents stated that Farr, Pace, and Individual 1 were homebound and required full-time assistance for basic tasks such as eating, bathing, and dressing.  In fact, all three individuals lived active lives and did not require such assistance.

Farr served in the U.S. Navy from August 2, 2005 until April 19, 2007, when she was administratively discharged.  In 2009, Farr filed a claim to the VA for disability compensation stating that she suffered post-traumatic stress disorder after being sexually assaulted while on duty three years earlier.  At the same time, Farr also falsely claimed to the VA that she was seriously injured in a traffic accident when she was struck by a drunk driver while driving on duty in 2006.  Farr claimed that she suffered from chronic neck and back pain as a result of the accident.

In support of these claims, Farr filed an entirely fabricated medical record allegedly from the Navy consisting of over 70 pages of documents purportedly authored by criminal investigators, psychologists, and physical therapists.  Based on the injuries claimed and the forged supporting medical documentation, on October 6, 2007, the VA rated Farr 70 percent disabled.

In 2015, Farr sought additional compensation claiming that she suffered a traumatic brain injury and other grave health consequences as a result of the 2007 vehicle accident.  Farr again submitted dozens of forged fraudulent medical documents in support of her claim, using the names of both real and fictitious physicians.  The documents claimed that Farr was paralyzed from the waist down, suffered multiple seizures daily, required round-the-clock care for basic functions such as toileting and showering, and claimed that she also suffered from an aneurysm, heart attack, and leukemia.  Based on the fraudulent documentation, VA increased Farr’s disability rating to 100 percent, and awarded Special Monthly Compensation (SMC) for her in-home nursing care requirements.

In approximately April 2016, Farr applied online for Social Security Disability Insurance (SSDI) benefits on the basis of the same disabilities she cited in her VA claims.  In that application, Farr claimed that she was unable to work, despite the fact that she was working for the Department of Defense at the time she applied, but claimed she was forced to medically retire.  The Social Security Administration awarded SSDI benefits to Farr on September 17, 2016.

Farr also conspired with and assisted Pace, a former member of the United States military, to exaggerate his existing condition using forged and fraudulent documents, resulting in an increased rating of 100%.  Pace received the highest amount of disability compensation and SMC paid by the VA, in addition to a Caregiver Stipend he received in the amount exceeding $2,500 monthly, for purportedly serving as Farr’s caregiver, despite claiming to be completely disabled himself.

Farr also conspired with her mother, Mary Francis Biggs, age 65 of Lexington Park, Maryland, to exaggerate Individual 1’s claims, which involved the submission of fraudulent and fictitious medical documents.  As a result, the VA rated Individual 1 to be 100 percent disabled and awarded him SMC.  Biggs and Farr also conspired to conceal from VA the fact that Individual 1 was working, and as part of a VA field interview on September 13, 2017, Biggs did not disclose the fact that Individual 1was employed and completed a form stating that Individual 1 had no employment income.  Biggs spent the fraudulently received disability compensation payments on daily living expenses, cruise vacations, and a kitchen renovation, even though she was aware that her husband was not entitled to the payments. 

Farr received approximately $440,085 in VA benefits and approximately $35,666 in Social Security benefit payments, resulting in a loss to the United States of $475,751 on Farr’s claims alone.  Pace received $370,912 in VA benefits to which he was not entitled.  Biggs and her husband received more than $168,000 in VA benefits to which they were not entitled.

Pace previously pled guilty, and Biggs was convicted on August 15, 2022 after a jury trial, for conspiracy and for theft of government property in connection with the scheme.  Biggs faces a maximum sentence of five years in federal prison for the conspiracy and a maximum of 10 years in federal prison for theft of government property.  U.S. District Judge Xinis has scheduled sentencing for November 16, 2022.

United States Attorney Erek L. Barron commended the VA OIG and SSA OIG for their work in the investigation.  Mr. Barron thanked Assistant U.S. Attorney Coreen Mao, who is prosecuting the case.

For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources to report fraud, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/report-fraud

# # #

Defense News: Naval Special Warfare Group 1 Medical Supply Program Manager Receives DoD Award

Source: United States Navy

Each October, service members and civilian DoD employees are selected to receive this award for their outstanding contributions to the federal workforce.

“I am very proud of Steve.  He is an invaluable member of the Naval Special Warfare Group 1 team,” said Capt. David Abernathy, commander, NSWG-1. “Keeping our Sailors healthy and ready is our top priority, and his steadfast work ethic and dedication to his teammates allows us to do just that.”

NSWG-1 mans, trains, equips, develops, deploys and sustains Naval special warfare forces in support of combatant commanders around the world. Elliott’s dedication to duty helped NSWG-1 uphold their mission statement by improving operational readiness and capability.

Elliott, who has been NSWG-1’s medical supply program manager since 2015, is responsible for a $2.49 million annual budget and the maintenance of $10 million in medical supplies and equipment. His experience in the collection and analysis of supply statistics, workload data, product reviews, and test and evaluation ensured NSWG-1 procured the highest quality products at the most cost-efficient price point to improve SEAL survivability in austere operations.

Through decades of combined active-duty military and DoD civilian employee service, Elliott reflected on what receiving the 42nd annual award means to him.

“I have had the opportunity to work with NSW on active duty and as a federal employee for 35 years,” he said. “The people who I serve with today are like family.  I enjoy what I do, and I love the service members that are out there every day doing the work to keep our country free. I am honored to be part of this team and being given this award confirms my hard work and dedication to the Sailors I work with.”

October is National Disability Employment Awareness Month. The U.S. Department of Labor uses the month, which is themed “Disability: Part of the Equity Equation” for 2022, to highlight the vital role disabled people play in making our nation’s workforce diverse and inclusive.

At the virtual awards ceremony on Oct. 20, Deputy Defense Secretary Kathleen H. Hicks spoke about the importance of utilizing diversity to strengthen the DoD.

“Today, we celebrate the core element of our unmatched strength as a military and Department of Defense — our people,” said Hicks. “Maintaining that strength requires tapping into every reservoir of talents and skills that America has to offer. That includes people with disabilities — who bring so much to this department through their talents, skills, education and motivation to serve.” 

Elliott, who is one of 28 individual awardees, spoke about what the award means to him.

“I’m honored to be selected to represent all my brothers and sisters with disabilities,” he said.  “Even though we have disabilities, we can do anything we set our minds to. Hard work, dedication and perseverance has gotten every one of us to where we are today, and this award solidifies that.”

Since 1962, Naval Special Warfare has been the nation’s premier maritime special operations force – a highly reliable and lethal force – always ready to conduct full-spectrum operations, unilaterally or with partners, in support of national objectives, and uniquely positioned to extend the Fleet’s reach, delivering all-domain options for Naval and joint force commanders. For more news from Naval Special Warfare Command, visit https://www.facebook.com/NavalSpecialWarfare or https://www.nsw.navy.mil/.

Security News: Former U.S. Navy Service Member Pleads Guilty to $2 Million Insurance Fraud Scheme

Source: United States Department of Justice News

Assistant U. S. Attorneys Peter Ko (619) 546-7359 and Mark Conover (619) 546-6763

NEWS RELEASE SUMMARY – October 27, 2022

SAN DIEGO – Christopher Toups, who at the time of his crimes was a chief petty officer in the U.S. Navy, pleaded guilty in federal court today, admitting that he and others participated in a scheme to file false claims to obtain unearned benefits from an insurance program that compensates service members who suffer serious and debilitating injuries while on active duty.

According to his plea agreement, participants in the scheme obtained approximately $2 million in payments from fraudulent claims submitted to the insurance program – Traumatic Servicemembers Group Life Insurance Program, or TSGLI – and Toups personally obtained about $400,000.

At today’s hearing, Toups pleaded guilty to conspiracy to commit wire fraud. He admitted that from 2012 to at least December 2015, he conspired with his then-spouse Kelene McGrath, Navy Dr. Michael Villarroel, and others to obtain money from the United States by making claims for life insurance payments based on exaggerated or fake injuries and disabilities. He is scheduled to be sentenced on February 3, 2023, at 9 a.m.

“The theft of military healthcare dollars directly ‎harms service members and taxpayers,” said U.S. Attorney Randy Grossman. “This fraud was costly for the U.S. Navy, and now for this defendant.” Grossman thanked the prosecution team and investigating agencies for their excellent work on this case.

“Fraudulently filing claims for unearned TSGLI benefits diverts compensation from deserving service members who suffered serious and debilitating injuries while on active duty,” said Special Agent in Charge Rebeccalynn Staples with the Department of Veterans Affairs Office of Inspector General’s Western Field Office. “Worse yet, this defendant actively recruited others into the scheme to feed his greed for compensation he did not deserve. This guilty plea is a testament to the VA OIG’s commitment to investigating those who would defraud benefit programs administered by VA.”

“The Traumatic Servicemembers Group Life Insurance Program is designed to compensate service members who suffer serious and debilitating injuries while on active duty. Falsely claiming benefits from this program siphons money from deserving beneficiaries and makes medical care more costly for all of us,” said Stacey Moy, Special Agent in Charge of the FBI San Diego Division. “This scheme is particularly egregious given the service members involved deceitfully served themselves for their own financial gain. The FBI will continue to work with our law enforcement partners to ensure those who willingly defraud the American people are held accountable.”

The Traumatic Servicemembers Group Life Insurance (TSGLI) program was administered by Prudential for the Navy and funded by servicemembers and the Department of the Navy. TSGLI provided financial assistance to servicemembers recovering from traumatic injuries.

According to the plea agreement, in addition to submitting his own TSGLI claims based on fake injuries and disabilities, Toups encouraged numerous current or former Navy servicemembers to submit claims and sometimes told them to provide medical records to McGrath. McGrath, a nurse, falsified or doctored medical records to exaggerate or fake injuries. Villarroel certified that he reviewed the records and determined activities of daily living were lost or impaired and consistent with the claimed injuries as required for claims to be processed and qualify, at times supporting the determination by falsely stating he interviewed the claimant. Villarroel also, at times, provided others’ medical records for McGrath to use in fabricating claims.

Toups admitted that he encouraged recipients of claim payments to give him part of the money, sometimes characterizing it as a “processing fee.” McGrath and Villarroel received part of the kickback depending on their involvement in the claim. Toups paid Villarroel in cash and by cashier’s check. At times, Toups and other conspirators conducted financial transactions in amounts under $10,000 to evade perceived financial reporting requirements.

According to court records, some of Toups’ co-defendants were part of the Explosive Ordinance Disposal Expeditionary Support Unit One (“EOD ESU One”), based in Coronado, California. Toups was a Chief Petty Officer Construction Mechanic.

Ronald Olmsted and Anthony Coco, who each entered guilty pleas earlier this year, were previously sentenced by U.S. District Judge Janis L. Sammartino. Olmsted was sentenced to four months in prison followed by four months of home detention to be served as part of three years of supervised release. Coco was sentenced to four months of home detention to be served as part of three years of probation.

According to court records, Toups, Villarroel, and Meyer were at the center of the scheme, and together the conspirators defrauded the TSGLI program of nearly $2 million. Toups, Villarroel, and Meyer received kickbacks for creating and filing the fraudulent TSGLI applications for other U.S. Navy service members.

DEFENDANT           18CR1674-JLS

Christopher Toups      43        Woodstock, GA

RELATED CASES

Kelene Meyer                         18CR1674-JLS                       44                    Jacksonville, FL

Dr. Michael Villarroel            18CR1674-JLS                       48                    Coronado, CA

Paul Craig                               18CR1674-JLS                       47                    Austin, TX

Richard Cote                           18CR1674-JLS                       45                    Oceanside, CA

Earnest Thompson                  18CR1674-JLS                       46                    Murrieta, CA

Ronald Olmsted                      20CR0659-JLS                       48                    Mobile, AL

Anthony Coco                         20CR0197-JLS                       43                    San Diego, CA

Stephen Mulholland               20CR0052-JLS                       51                    Panama City Beach, FL

SUMMARY OF CHARGES

Toups:

18 U.S.C. § 1349, Conspiracy to Commit Wire Fraud

Maximum Penalty: Twenty years in prison, $250,000 fine, forfeiture and restitution

Others:

18 U.S.C. § 1349, Conspiracy to Commit Wire Fraud

Maximum Penalty: Twenty years in prison, $250,000 fine, forfeiture and restitution

18 U.S.C. § 1343, Wire Fraud

Maximum Penalty: Twenty years in prison, $250,000 fine, forfeiture and restitution

18 U.S.C. § 287, Making a False Claim

Maximum Penalty: Five years in prison, $250,000 fine

AGENCIES

Federal Bureau of Investigation

Naval Criminal Investigative Service

Department of Veterans Affairs – Office of Inspector General

*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.

Security News: Mexican National Arrested for Alleged Fraud Scheme in Which He Impersonated an IRS Employee and Filed False Tax Returns

Source: United States Department of Justice News

LAS VEGAS – A Mexican citizen—who entered the U.S. illegally—made his initial appearance yesterday for fraudulently soliciting thousands of dollars from victims in exchange for filing false tax returns. The defendant falsely claimed that he was an IRS officer who could obtain large amounts of money from the IRS, if the victims paid him to apply to a fictitious IRS program.

Francisco Ivan Velazquez (52) is charged by superseding indictment with three counts of wire fraud, two counts of impersonation of officer or employee of the United States, and five counts of aiding and assisting in the preparation of a false tax return. The superseding indictment was filed on August 30, 2022 and unsealed when the defendant made his initial appearance.

According to allegations contained in the superseding indictment, from March 2016 through March 2018, Velazquez told the victims that he was an IRS employee and was able to secure large monetary refunds for them from the IRS. He falsely claimed that such funds were available from a purported IRS program which allowed people who had previously lost a home to foreclosure to recoup money by applying to the IRS and filing certain documents. Velazquez advised victims that in exchange for a fee he would submit an application for them to recover the funds. Velazquez would then prepare and file false tax returns and other documents with the IRS claiming that the victim had federal tax withholdings in excess of $100,000, and fraudulently claiming that the victim qualified for an income tax refund in excess of $100,000.

If convicted, the statutory maximum penalty is 20 years in prison for each count of wire fraud, and three years for each count of filing a false tax return and for each count of impersonating an officer or employee of the United States.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division; U.S. Attorney Jason M. Frierson for the District of Nevada; Special Agent in Charge Albert Childress of the IRS Criminal Investigations; and J. Russell George, the Treasury Inspector General for Tax Administration made the announcement.

This case was investigated by IRS Criminal Investigation and the Treasury Inspector General for Tax Administration.

Tax Division Trial Attorney Thomas W. Flynn and Assistant U.S. Attorney Eric C. Schmale are prosecuting the case.

An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

###

Security News: Dallas Attorney Charged with Promoting Illegal Tax Shelter

Source: United States Department of Justice News

An indictment returned by a federal grand jury in Dallas was unsealed today charging a Texas lawyer with wire fraud, conspiracy to commit wire fraud, and helping his clients file false tax returns based on an illegal tax shelter that he promoted.

According to the indictment, from approximately 2012 to 2021 Joseph Garza, of Dallas, promoted a tax shelter that allowed high-income clients to claim fraudulent tax deductions that reduced the taxes they owed to the IRS. Garza and his co-conspirators allegedly directed the clients to transfer funds into shell companies, then returned this money to the clients, untaxed, for their own personal use. To conceal the circular flow of funds, Garza and the co-conspirators allegedly commissioned fictitious business valuation reports, created invoices for fake business expenses, and drafted sham contractual agreements. According to the indictment, Garza’s scheme allowed clients to hide approximately $1 billion dollars from the IRS and caused a total tax loss to the IRS exceeding $200 million.

Garza is scheduled to make his initial appearance tomorrow before U.S. Magistrate Judge Irma Ramirez of the U.S. District Court for the Northern District of Texas. If convicted, he faces a maximum penalty of 20 years in prison for each of the 18 counts of wire fraud, 20 years in prison for conspiracy to commit wire fraud, and three years in prison for each of 22 counts of aiding and assisting in the filing of false federal income tax returns. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Chad E. Meacham for the Northern District of Texas made the announcement.

IRS Criminal Investigations and the FBI are investigating the case.

Assistant U.S. Attorneys Renee Hunter, Katherine Miller, and Marty Basu, and Trial Attorney Robert A. Kemins of the Tax Division are prosecuting the case.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.