A Navy veteran has pleaded guilty to filing false claims to obtain $2 million in benefits from an insurance program that compensates service members who suffer serious and debilitating injuries on active duty.
Christopher Toups, who at the time of his crimes was a chief petty officer in the U.S. Navy, pleaded guilty on Oct. 27 in federal court in San Diego, California, admitting that he and others participated in a scheme to file false claims to obtain unearned benefits from the Traumatic Servicemembers Group Life Insurance Program. Toups personally obtained about $400,000.
“The theft of military healthcare dollars directly harms service members and taxpayers,” said U.S. Attorney Randy Grossman said in a release. “This fraud was costly for the U.S. Navy, and now for this defendant.”
Toups pleaded guilty to conspiracy to commit wire fraud, admitting 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 federal government by making claims for life insurance payments based on exaggerated or fake injuries and disabilities.
“Fraudulently filing claims for unearned TSGLI 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. “Worse yet, this defendant actively recruited others into the scheme to feed his greed for compensation he did not deserve.”
In addition to submitting his own TSGLI claims based on fake injuries and disabilities, Toups encouraged numerous current or former Navy servicemembers to submit claims and sometimes told them to provide medical records to McGrath.
Related
McGrath, a nurse, falsified or doctored medical records to exaggerate or fake injuries, according to the release. 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 other conspirators conducted financial transactions in amounts under $10,000 to evade perceived financial reporting requirements.
According to court records, some of Toups’ co-defendants were part of the Explosive Ordinance Disposal Expeditionary Support Unit One, based in Coronado, California. Toups was a chief petty officer construction mechanic.
Related
Ronald Olmsted and Anthony Coco, who each entered guilty pleas earlier this year, were previously sentenced by U.S. District Judge Janis L. Sammartino. Olmsted was sentenced to four months in prison followed by four months of home detention to be served as part of three years of supervised release. Coco was sentenced to four months of home detention to be served as part of three years of probation.
Toups is scheduled to be sentenced on Feb 3, 2023.
Reach Julia LeDoux at Julia@connectingvets.com.