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Press Release

Former U.S. Navy Service Member Sentenced for $2 Million Insurance Fraud Scheme

For Immediate Release
U.S. Attorney's Office, Southern District of California

NEWS RELEASE SUMMARY – October 17, 2023

SAN DIEGO – Christopher Toups, who at the time of his crimes was a chief petty officer in the U.S. Navy, was sentenced in federal court to 30 months in prison after admitting that he and others defrauded an insurance program meant to compensate service members who suffer serious and debilitating injuries while on active duty.

Toups’ sentence followed his guilty plea to conspiracy to commit wire fraud. According to his plea agreement, participants in the scheme obtained approximately $2 million in payments from fraudulent claims submitted to Traumatic Servicemembers Group Life Insurance Program, or TSGLI, and Toups personally obtained about $400,000. TSGLI was funded by service members and the Department of the Navy.

Toups 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.

“Lying and stealing funds meant for injured service members is appalling,” said U.S. Attorney Tara McGrath. “The United States Attorney’s Office is committed to protecting those who serve, and this case is an excellent example of law enforcement collaboration to do just that.”

Fraudulently filing claims for unearned 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. “This sentence holds the defendant accountable for his egregious actions, and the VA OIG will continue to work tirelessly with our law enforcement partners to ensure schemes like this are uncovered, investigated, and prosecuted to the fullest extent of the law.”

“Mr. Toups participated in a fraud scheme that defrauded the American taxpayer and diverted vital money, care, and resources from service members recovering from traumatic injuries,” said Special Agent in Charge Greg Gross of the NCIS Economic Crimes Field Office. “This sentence demonstrates the commitment of NCIS and its partners to combatting fraud that harms the Department of the Navy and its warfighters.”

“Stealing from a program set in place to aid injured and disabled servicemembers diverts compensation from deserving individuals,” said FBI San Diego Special Agent in Charge Stacey Moy. “Willingly defrauding the American people, especially those who protect our country, will not be tolerated. The FBI will continue to collaborate with our law enforcement partners to ensure those who commit such acts are held accountable.”

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 service members 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 others conducted financial transactions in amounts under $10,000 to evade perceived financial reporting requirements.

According to court records, Toups and his 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.

DEFENDANT           18CR1674-JLS

Christopher Toups      46        White, GA


Kelene Meyer                         18CR1674-JLS                       Jacksonville, FL

Dr. Michael Villarroel            18CR1674-JLS                       Coronado, CA

Paul Craig                               18CR1674-JLS                       Austin, TX

Richard Cote                           18CR1674-JLS                       Oceanside, CA

Earnest Thompson                  18CR1674-JLS                       Murrieta, CA

Ronald Olmsted                      20CR0659-JLS                       Mobile, AL

Anthony Coco                         20CR0197-JLS                       San Diego, CA

Stephen Mulholland               20CR0052-JLS                       Panama City Beach, FL



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. § 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


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.


Media Relations Director Kelly Thornton (619) 546-9726 or 

Updated October 17, 2023

Health Care Fraud
Press Release Number: CAS23-1017-Toups