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Press Release

Midstate Man And Woman Charged With Defrauding Disabled Veteran Of $316,360

For Immediate Release
U.S. Attorney's Office, Middle District of Pennsylvania

HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Jason Ehrhart, age 48, of Thompsontown, Pennsylvania, and Jason’s former wife, Laurie Ehrhart, age 48, of Newport, Pennsylvania, were charged with defrauding a disabled Veteran, the Veteran’s Administration, and the Social Security Administration out of $316,360.

According to United States Attorney David J. Freed, Jason Ehrhart is charged by way of a criminal information with one count of health care fraud. Jason’s former wife, Laurie Ehrhart, is charged in an indictment with one count of health care fraud and one count of conspiracy to commit health care fraud.

According to the charges, a veteran who was a former resident of Perry County, Pennsylvania, was diagnosed with multiple sclerosis while serving in the U.S. Army in 1985.   The veteran later began receiving disability benefits from the Department of Veterans Affairs (VA) and the Social Security Administration (SSA) and was eventually hospitalized on a permanent basis at the VA hospital in Lebanon, Pennsylvania, on November 8, 2004. 

On August 8, 2006, the veteran was deemed by the VA to be incompetent to handle his own financial affairs.  As a result, on October 2, 2006, Jason Ehrhart successfully applied to serve as the veteran’s VA Fiduciary and Legal Custodian.  Under the terms of a Fiduciary Agreement, Jason Ehrhart agreed to use all of the veteran’s VA disability benefits exclusively for the veteran’s benefit. The agreement warned him that the funds were not for his personal use. The Fiduciary Agreement also required Jason Ehrhart to submit an annual accounting to the VA with respect to the amount of money spent on the veteran’s behalf.

The charges allege, however, that between October 2006 and August 2016, Jason Ehrhart and Laurie Ehrhart, who was then Jason’s wife, misspent $316,360 of the veteran’s VA and Social Security disability benefits on themselves.

While Jason Ehrhart served as the veteran’s VA Fiduciary and Legal Custodian, all of the veteran’s VA benefits, plus most of his Social Security disability checks, were deposited into a checking account Jason opened as a legal custodian account in the veteran’s name.  Altogether, $476,260 in federal benefits ($422,828 in VA disability, $48,187 in Social Security disability, and $5,244 in VA clothing allowance) were deposited into the account between January 2009 and August 2016.

The charging documents alleged that, at least $316,360 of the $476,260 was misappropriated by Jason and Laurie Ehrhart and converted to their own use.  Checks totaling $218,832 ($96,202 payable to Jason Ehrhart and $122,630 payable to Laurie Ehrhart), some of which exceeded $5,000, $6,000 and $7,000, were drawn against the account.  Of the $218,832, $157,742 was allegedly deposited into Jason and Laurie Ehrhart’s joint checking account at the Juniata Valley Bank (JVB) and at least $23,496 was converted to cash.  Thereafter, it is alleged that the funds in the joint JVB account were employed by Jason and Laurie Ehrhart to pay personal expenses. 

The charging documents further allege that another $7,174 in checks were made payable to Jason and Laurie Ehrhart’s two minor children.  Jason Ehrhart allegedly instructed the children to take the checks to the bank, cash them, and surrender the cash to him.

Another $19,890 in checks were allegedly made payable to another couple who were Jason and Laurie Ehrhart’s best friends. According to the charges, Jason Ehrhart regularly treated the couple and their children to dinners out and at least two, all-expense paid vacations to Disney World in Florida, purchased two automobiles for the family, and paid for the wife’s dental work.

To conceal his embezzlements, it is alleged that Jason Ehrhart submitted eight false annual accountings to the VA in which he falsely claimed he spent $402,408 on the veteran’s behalf between October 2006 and October 2015.  According to the charges, the itemized expenditures in the accountings were grossly inflated. For example, Jason Ehrhart claimed he paid the mortgage on the veteran’s residence ($1,631 per month) plus the veteran’s share of the mortgage on his mother’s residence ($881) after she died in May 2011.  However, the lenders against both properties obtained judgments and they were eventually foreclosed and sold.

According to the charges, Jason Ehrhart also falsely claimed in the annual accountings that he spent thousands on miscellaneous expenditures for the veteran, including storage unit rentals, vehicle maintenance bills, state and local taxes, life and auto insurance, and credit card bills.  However, in 2016 the veteran’s specially equipped wheelchair van, for which Jason Ehrhart claimed he spent approximately $32,395 for vehicle maintenance, was found broken down and abandoned along a Perry County roadside.

The veteran died at the Lebanon VA Hospital on July 30, 2018. 

Laurie Ehrhart was arraigned on the charges before U.S. Magistrate Judge Susan E. Schwab this afternoon and released on her own recognizance. No date has yet been set for Jason Ehrhart’s initial appearance on the charges.

The Department of Veteran Affairs, the Office of Inspector General, the Pennsylvania State Police, and the Social Security Administration’s Office of Inspector General investigated the case.  Assistant United States Attorney Kim Douglas Daniel is prosecuting the case.

Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.

A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.

The maximum penalty under federal law for this offense is 10 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.

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Updated October 29, 2018

Health Care Fraud