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Description: San Diego, California criminal law lawyer represented Defendant charged with conspiracy to commit wire fraud.
Christopher Toups, who at the time of his crimes was a chief petty officer in the U.S. Navy, pleaded guilty in federal court today, admitting that he and others participated in a scheme to file false claims to obtain unearned benefits from an insurance program that compensates service members who suffer serious and debilitating injuries while on active duty.
Participants in the scheme obtained approximately $2 million in payments from fraudulent claims submitted to the insurance program - Traumatic Servicemembers Group Life Insurance Program, or TSGLI - and Toups personally obtained about $400,000.
Toups pleaded guilty to conspiracy to commit wire fraud. He 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.
“The theft of military healthcare dollars directly harms service members and taxpayers,” said U.S. Attorney Randy Grossman. “This fraud was costly for the U.S. Navy, and now for this defendant.” Grossman thanked the prosecution team and investigating agencies for their excellent work on this case.
“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. This guilty plea is a testament to the VA OIG’s commitment to investigating those who would defraud benefit programs administered by VA.”
“The Traumatic Servicemembers Group Life Insurance Program is designed to compensate service members who suffer serious and debilitating injuries while on active duty. Falsely claiming benefits from this program siphons money from deserving beneficiaries and makes medical care more costly for all of us,” said Stacey Moy, Special Agent in Charge of the FBI San Diego Division. “This scheme is particularly egregious given the service members involved deceitfully served themselves for their own financial gain. The FBI will continue to work with our law enforcement partners to ensure those who willingly defraud the American people are held accountable.”
The Traumatic Servicemembers Group Life Insurance (TSGLI) program was administered by Prudential for the Navy and funded by servicemembers and the Department of the Navy. TSGLI provided financial assistance to servicemembers recovering from traumatic injuries.
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 servicemembers 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 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 (“EOD ESU One”), based in Coronado, California. Toups was a Chief Petty Officer Construction Mechanic.
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.
Chrisophter Toups, Villarroel, and Meyer were at the center of the scheme, and together the conspirators defrauded the TSGLI program of nearly $2 million. Toups, Villarroel, and Meyer received kickbacks for creating and filing the fraudulent TSGLI applications for other U.S. Navy service members.
DEFENDANT 18CR1674-JLS
Christopher Toups 43 Woodstock, GA
RELATED CASES
Kelene Meyer 18CR1674-JLS 44 Jacksonville, FL
Dr. Michael Villarroel 18CR1674-JLS 48 Coronado, CA
Paul Craig 18CR1674-JLS 47 Austin, TX
Richard Cote 18CR1674-JLS 45 Oceanside, CA
Earnest Thompson 18CR1674-JLS 46 Murrieta, CA
Ronald Olmsted 20CR0659-JLS 48 Mobile, AL
Anthony Coco 20CR0197-JLS 43 San Diego, CA
Stephen Mulholland 20CR0052-JLS 51 Panama City Beach, FL
SUMMARY OF CHARGES
Toups:
18 U.S.C. § 1349, Conspiracy to Commit Wire Fraud
Maximum Penalty: Twenty years in prison, $250,000 fine, forfeiture and restitution
Others:
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
AGENCIES
Federal Bureau of Investigation
Naval Criminal Investigative Service
Department of Veterans Affairs - Office of Inspector General
Outcome: 10/27/2022 462 CONSENT TO RULE 11 PLEA before Magistrate Judge Jill L. Burkhardt by Christopher Toups. (tcf) (Entered: 10/28/2022)
10/27/2022 463 PLEA AGREEMENT as to Christopher Toups. (Attachments: # 1 Financial Addendum) (tcf) (Entered: 10/28/2022)
10/27/2022 465 Minute Entry for proceedings held before Magistrate Judge Jill L. Burkhardt: Change of Plea Hearing as to Christopher Toups held on 10/27/2022. Defendant appeared in person on bond. Plea Tendered by Christopher Toups Guilty on count 1 of Second Superseding Indictment. Findings, Plea Agreement, Consent filed. Excludable(s) started as to Christopher Toups: XK 10/27/2022-2/3/2023. PSR Ordered. All pending motions withdrawn; Pending hearing dates vacated. Any objections to Findings due within 14 days. Sentence With PSR set for 2/3/2023 09:00 AM before Judge Janis L. Sammartino. (CD# 10/27/2022 JLB 22: 10:10-10:40). (Plaintiff Attorney Mark Conover, AUSA). (Defendant Attorney Pedro Bernal Bilse, RET). (als) (Entered: 10/28/2022)
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