VA worker, 13 others charged in fraud scheme - Army News | News from Afghanistan & Iraq - Army Times

VA worker, 13 others charged in fraud scheme

LOUISVILLE, Ky. — A Veterans Administration employee and 13 other people have been charged with conspiring to steal nearly $2 million in disability claims.

Veterans Affairs service representative Jeffrey Allan McGill and Daniel Ryan Parker, a veteran and officer with the Disabled American Veterans, were among the 14 charged Wednesday by a federal grand jury with conspiring to defraud the U.S. of $1.9 million through the submission of false veterans disability claims to the Department of Veterans Affairs.

The indictment outlines an alleged scheme for veterans to falsely claim to have suffered from bipolar disorder, hearing loss, frostbite, back injuries and other ailments and disabilities.

The indictment says veterans received lump-sum payments for back pay and then kick backed as much as two-thirds of it to Parker and McGill.

“They’re all veterans,” U.S. Attorney David Huber said at a news conference Thursday. “That’s what’s sad about all of this.”

Parker, 37, of Crestwood, is free on $25,000 bond. He is also charged with stealing $47,000 from Disabled American Veterans. His attorney, Brian Butler of Louisville, said his client plans to plead not guilty.

“We’ve been aware of the investigation for months and have cooperated with investigators,” Butler said.

A phone message left for McGill, 37, was not immediately returned Thursday morning.

Huber said the remaining defendants, who live in Kentucky, Illinois and West Virginia, would voluntarily surrender at arraignment on Dec. 16 in Louisville.

Huber said Parker and McGill received between $500,000 and $600,000 in kickbacks, with the rest of the stolen money being split among the participants.

According to the indictment, starting in 2003 and continuing until this month, Parker and McGill recruited friends, relatives and acquaintances who were military veterans to file fraudulent claims with the VA.

Parker and McGill then allegedly either altered the veterans’ medical records, or created counterfeit medical records, to give the appearance that the veterans had service related disabilities.

That resulted in the veterans receiving 100 percent disability for problems such as depression or cancer due to Agent Orange exposure during combat in Vietnam, according to the indictment.

Huber said the case came to light after a tip from a confidential source. He declined to discuss how the source knew about the alleged plot.

“But for that confidential source, this case may not have been known for some time, if at all,” Huber said.

Michael Keen, the resident agent in charge for the Department of Veterans Affairs in Louisville, said the scheme could hurt veterans who needed the funds allegedly purloined.

“Obviously, the Department of Veterans Affairs doesn’t have a bottomless pit of money,” Keen said.

Huber said prosecutors will try to recoup the money taken during the scheme.