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Kent man receives prison sentence for Veterans Affairs travel fraud scheme
A Kent man received a 37-month prison sentence Tuesday for his role in taking kickbacks on fraudulently inflated travel vouchers when he worked at Seattle's Veterans Affairs Hospital.
Keishjuan Daniels, 33, also must serve three years of supervised release and share in restitution pay of $181,114 with former co-worker and schemer Nick Hall, 47, of Seattle, according to a U.S. Attorney's Office media release.
Both men are veterans and recruited other military veterans to participate in the fraud. Some of the veterans recruited were vulnerable due to service-related mental health disorders. Hall received a prison sentence of 42 months.
“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,” said U.S. Attorney Jenny A. Durkan in the media release. “Following the arrests in this case the average monthly cost of larger travel vouchers was cut almost in half here, and sent a deterrent message everywhere: Don’t cheat our wounded warriors.”
U.S. District Court Judge James L. Robart sentenced Daniels and Hall on Tuesday in Seattle.
“There’s nothing like the bright sunshine of public disclosure to reduce fraud," Robart said. "I’m delighted to see there has been a decrease in fraudulent claims following this prosecution.”
Medical benefits are a critical aid for veterans. Not all communities have a VA medical facility, so the VA will reimburse certain travel costs.
According to court records, beginning in the second half of 2010, Hall and Daniles recruited other veterans to lie about where they lived so that they could fraudulently inflate their travel costs for coming to the VA for medical appointments. They provided their co-schemers with phony addresses in towns such as Pullman, Port Townsend, Richland or Port Angeles so that the amount of mileage each vet claimed was far in excess of what they actually traveled.
Daniels and Hall, who worked in the travel voucher office, provided the falsified vouchers and sometimes provided vouchers for appointments that never occurred. The pair would take a kickback of half the cash the veteran obtained through fraud. Over the course of the 18-month scheme the fraud totaled $180,000.
After the arrest in June 2012 of Hall and Daniels, the Veterans Affairs Office of Inspector General (VAOIG) analyzed all larger vouchers submitted for payment (more than $500 per veteran). Before the arrest, such vouchers totaled more than $103,000 a month in payments. After the arrests and publicity about the prosecutions, the average total of such vouchers dropped to about $54,000 per month – a drop of 48 percent.
Michael E. Seitler, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Northwest Field Office, said that “the actions of the defendants in this case served to undermine the public trust and divert precious financial resources from the VA’s critical mission. In this case two corrupt government employees, and eight veterans who conspired with them, exploited a system designed to help facilitate veterans’ access to medical care.
"This system provides financial travel reimbursements to veterans so that they can more easily come to VA medical centers and get the medical attention they deserve. The defendants abused this system in order to enrich themselves, ultimately at the expense of others."
The case was investigated by the Veterans Affairs Office of Inspector General with assistance from the Veterans Affairs Police and VA Medical Center Management.
Nationwide over the last 18 months the Veterans Affairs Office of Inspector General has conducted 225 investigations and arrested 125 people for fraud in the travel benefits program. The VA-OIG has more than 125 open investigations of fraud in the travel benefits program.
The VA, Office of Inspector General, has established a hotline for anyone to anonymously report fraud, waste, and abuse at 1-800-488-8244 or email firstname.lastname@example.org.