The ringleaders of a scheme to defraud the Department of Veterans Affairs (VA) of tens of thousands of dollars in travel expenses have been sentenced to more than three years in prison.
Federal prosecutors and VA officials said the arrests and prosecutions of the men and several of their co-conspirators have had a chilling effect on travel fraud within the VA, as others have quit or cut back on cheating.
“There’s nothing like the bright sunshine of public disclosure to reduce fraud,” said U.S. District Judge James Robart. “I’m delighted to see there has been a decrease in fraudulent claims following this prosecution.”
Robart sentenced 47-year-old Nick Hall, of Seattle, to 3½ years in prison and his co-worker, Keishjuan Daniels, 33, of Kent, to 37 months. Both were ordered to share in restitution of $181,113, the amount the VA Office of Inspector General said was taken in the fraud.
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Court records show that, beginning in 2010, Hall and Daniels — both VA employees and veterans themselves — began to persuade other veterans to lie about where they lived so they could inflate their expenses for traveling to the hospital in Seattle for medical appointments.
The VA reimburses some travel costs for veterans because not every community has a veterans facility.
U.S. Attorney Jenny Durkan said that some of the veterans who were recruited were “vulnerable due to service-related mental-health disorders.”
Hall and Daniels worked in the VA’s travel-voucher office and, according to federal court documents, provided their co-schemers with false addresses from such towns as Pullman and Port Angeles, inflating the amount of mileage for which they were reimbursed. In some cases, they would provide mileage vouchers for appointments that never occurred.
Prosecutors said Hall and Daniels would take a kickback of half the cash. The amount of the fraud exceeded $180,000, according to prosecutors.
Several other lesser-involved veterans also were prosecuted. Most will be sentenced this week.
“Not only did these defendants recruit vulnerable veterans into criminal activity, they stole resources critically needed to help our men and women returning from Iraq and Afghanistan,” Durkan said.
After the arrests, Durkan said, the VA saw a nearly 50 percent decrease in the average monthly cost of larger travel vouchers — an effect prosecutors and VA inspectors believe is the direct result of the prosecutions.
Durkan said the prosecutions send a clear message: “Don’t cheat our wounded warriors.”
James O’Neill, the VA’s assistant inspector general for investigations, told The Associated Press that the number of fraud investigations over travel reimbursement has soared since 2008, when the VA’s rate for travel increased from 11 cents per mile to 41.5 cents.
Nationwide over the past 18 months, the VA Office of Inspector General has conducted 225 investigations and arrested 125 people in fraud cases in the travel-benefits program.
Mike Carter: 206-464-3706 or firstname.lastname@example.org.
Information from The Associated Press is included in this report.