Leaders of Veterans Affairs Travel Fraud Scheme Sentenced to Prison
Fraudulently Inflated Travel Costs Take Resources From Other VA Needs
Two former employees of Seattle’s Veterans Affairs Hospital were sentenced to prison terms today in U.S. District Court in Seattle in connection with their scheme to take kickbacks on fraudulently inflated travel vouchers, announced U.S. Attorney Jenny A. Durkan. The men, veterans themselves, recruited other military veterans to participate in the fraud. Some of those recruited were vulnerable due to service related mental health disorders. NICK HALL, 47, of Seattle was sentenced to 42 months in prison and three years of supervised release. KEISHJUAN DANIELS, 33, of Kent, Washington was sentenced to 37 months in prison and three years of supervised release. At sentencing U.S. District Judge James L. Robart ordered both to share in restitution in the amount of $181,114. Judge Robart said, “There’s nothing like the bright sunshine of public disclosure to reduce fraud. I’m delighted to see there has been a decrease in fraudulent claims following this prosecution.”
“Not only did these defendants recruit vulnerable veterans into criminal activity, they stole resources critically needed to help our men and women returning from Iraq and Afghanistan,” said U.S. Attorney Jenny A. Durkan. “Following the arrests in this case the average monthly cost of larger travel vouchers was cut almost in half here, and sent a deterrent message everywhere: Don’t cheat our wounded warriors.”
Medical benefits are a critical aid for veterans. Not all communities have a VA medical facility. Thus to ensure more veterans get the services they need, the VA will reimburse certain travel costs.
According to records filed in the case, beginning in the second half of 2010, HALL and DANIELS recruited other veterans to lie about where they lived so that they could fraudulently inflate their travel costs for coming to the VA for medical appointments. They provided their co-schemers with phony addresses in towns such as Pullman, Port Townsend, Richland or Port Angeles, Washington so that the amount of mileage each vet claimed was far in excess of what they actually traveled. The two men, who worked in the travel voucher office, provided the falsified vouchers and sometimes provided vouchers for appointments that never occurred. HALL and DANIELS would take a kickback of half the cash the veteran obtained through fraud. Over the course of the 18 month scheme the fraud totaled $180,000.
After the arrest of HALL and DANIELS, the Veterans Affairs Office of Inspector General (VAOIG) analyzed all larger vouchers submitted for payment (more than $500 per veteran). Before the arrest, such vouchers totaled more than $103,000 a month in payments. After the arrests and publicity about the prosecutions, the average total of such vouchers dropped to about $54,000 per month – a drop of 48%.
Michael E. Seitler, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Northwest Field Office, stated that “the actions of the defendants in this case served to undermine the public trust and divert precious financial resources from the VA’s critical mission. In this case two corrupt government employees, and eight veterans who conspired with them, exploited a system designed to help facilitate veterans’ access to medical care. This system provides financial travel reimbursements to veterans so that they can more easily come to VA medical centers and get the medical attention they deserve. The defendants abused this system in order to enrich themselves, ultimately at the expense of others. The VA Office of Inspector General will continue to aggressively pursue investigations of this type and hold those responsible accountable for their actions.”
Nationwide over the last 18 months the Veterans Affairs Office of Inspector General has conducted 225 investigations and arrested 125 people for fraud in the travel benefits program. Currently the VA-OIG has more than 125 open investigations of fraud in the travel benefits program.
The VA, Office of Inspector General, has established a hotline for anyone to anonymously report fraud, waste, and abuse at 1-800-488-8244 or email@example.com
The case was investigated by the Veterans Affairs Office of Inspector General with assistance from the Veterans Affairs Police and VA Medical Center Management. The cases were prosecuted by Assistant United States Attorneys Kate Vaughan and Thomas Woods.