VA Fraudster Pleads Guilty After Falsely Claiming Combat Service in Order to Get VA Benefits

Columbia, South Carolina ---- United States Attorney Sherri A. Lydon stated today that Keith R. Hudson, 70, from Charleston, South Carolina, pled guilty in federal court before United States District Court Judge Richard M. Gergel.  He had been indicted for defrauding the VA by receiving $197,237 in benefits after falsely claiming to be a military veteran of combat in Vietnam. This is a violation of Title 18, United States Code, § 1347(a)(1). He faces a potential ten year sentence.

Court documents presented during the hearing established that in 2015, Mr. Hudson applied to the VA in Charleston for benefits.  He used a falsified form from the Department of Defense, called a DD-214, (“Report of Separation from Active Duty”) which is a Department of Defense form given to members of the military who are separating from service.  In the form, he said that was a veteran of the war in Vietnam.  He represented that he was in the Navy and saw combat as a medic, suffering wounds and other trauma.  He claimed that he served from August 1, 1967 through October 31, 1971 and said that he received two Purple Hearts.

The investigation conducted by the Veterans Affairs Office of Inspector General (OIG) showed that this DD-214 was forged and false.  For instance, Mr. Hudson’s rank was listed as HN and E-4 (in the United States Navy, HN is actually the equivalent of E-3).  In the awards section, it stated that he received a Combat Medic Badge.  However, this is an award which is only given for service in the United States Army.  It also did not list the proper citation for a Purple Heart.   And the form stated Mr. Hudson received the Fleet Marine Force Medal with Marine Device.  There is no such medal.  It also had a stamp from the Alaska State Defense Force, which is suspicious as that group is not an official military organization, being comprised of volunteers.  Additionally, the service branches do not permit their records to be combined with or loaned to other entities, including National Guard units.  And, the typeset of the Social Security number on the DD-214 was different from the rest of the document.

In fact, Mr. Hudson never was in the military.  The investigation conclusively showed that there were no records in the National Personnel Records Center in St Louis, Missouri for him from any branch of service. 

Additionally, employment records for him from 1967 through 1971 established that he worked at a variety of jobs in New York and in Maine.  In two of them, he applied for employment and was fingerprinted.  These fingerprints were still on file and matched his prints.  As such, he was in the United States during the years 1967 through 1971.  Therefore, Mr. Hudson was never in the United States Navy nor did he ever see combat in Vietnam.

The investigation also showed that he had previously been prosecuted for the same scheme using the same DD-214 form in 2005 in Connecticut, where he had been placed in a pretrial diversionary program.   

United States Attorney Lydon said that these cases are very important for our country and for our community.  “This is a particularly awful type of white collar crime.  Veteran health benefits are for those who served our nation in the military.  The VA has limited numbers of physicians and resources.  There is not much to spare.  Every dollar and every minute of time stolen from the VA is something that is stolen from a veteran. VA fraud is on the increase and so we are grateful for the work of the Veterans Affairs Office of Inspector General for their investigative work on the case.”

Statistics bear out what the United States Attorney said.  Between April of 2017 and October of 2017 alone, the VA Office of Investigations made 80 arrests, and recovered $2.9 million in restitution, fines and penalties relating to things like VA health-care benefits fraud. This is more than twice the amount recovered in the same period a decade ago.

The Resident Agent in Charge for the IG in Asheville is G. Scott Bailey, who said “we aggressively investigate cases where individuals defraud the VA and take benefits meant for our nation’s veterans.”  He noted that the VA Office of Inspector General has a hotline, staffed weekdays between 8:30 a.m. .and 2 p.m. Eastern time, at 1-800-488-8244.  He said “If anyone has any knowledge of fraud going on at the VA, please call.  We’ll investigate.”

Assistant United States Attorney Sean Kittrell of the Charleston office prosecuted the case.

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