A former member of the US Navy entered a guilty plea to charges stemming from an insurance fraud scheme that defrauded a fund that supports service personnel who sustain catastrophic and disabling injuries while on active duty.

The Department of Justice reports that during his offenses, Christopher Toups, a chief petty officer in the Navy, entered a guilty plea last week to conspiring to commit wire fraud.

Participants in the conspiracy stole roughly $2 million from payments made on phony applications filed to the Traumatic Servicemembers Group Life Insurance Program, according to Toups’ plea bargain (TSGLI). In addition, Toups personally stole from the program roughly $400,000 in bogus claims.
The Navy’s TSGLI program was managed by Prudential and paid for by the Department of the Navy and service personnel. It offered military personnel who were healing from severe wounds financial support.

Toups admitted in his plea agreement that he and others, including his then-spouse Kelen McGrath and Navy doctor Michael Villarroel, had conspired to steal money from the United States by filing life insurance claims for payments based on overblown or entirely fictitious injuries and disabilities from at least December 2012 to at least December 2015.

According to US Attorney Randy Grossman, service personnel and taxpayers are directly harmed by the theft of military healthcare funds. For the US Navy and the defendant, this scam was expensive.

According to Rebeccalynn Staples, special agent in charge of the Department of Veterans Affairs Office of the Inspector General’s Western Field Office, “filing fraudulent claims for completely undeserved TSGLI benefits redirects reimbursement from deserving service members who suffered serious and incapacitating injuries while on active duty.” “What’s more, this defendant aggressively enlisted other people in the plan to satisfy his appetite for money he didn’t earn. This guilty plea demonstrates the VA OIG’s dedication to looking into potential fraudsters in VA benefit programs.

Toups urged other former and current Navy service personnel to file their false TSGLI claims, according to the plea bargain, in addition to submitting his claims himself. At times, he instructed them to give medical data to McGrath, a nurse who was also involved in the scheme. Then McGrath fabricated or altered records to inflate or fabricate injuries. According to Villarroel’s certification, he studied the documents and found that the alleged injuries had negatively impacted the service members’ ability to go about their regular lives. The DOJ said that Villarroel occasionally falsified that he had spoken with the claimant to justify that certification. In addition, Villarroel occasionally gave McGrath access to other people’s medical records so that she could make up cases.

According to their level of engagement in the fictitious claim, McGrath and Villarroel also received a portion of the kickback. Toups revealed to the court that he pushed receivers of claim payments to give him a part of the money by calling it a “processing fee.”

Ronald Olmsted and Anthony Coco, two further members of Toups’ conspiracy in the plot, entered guilty pleas earlier this year. Olmsted was given a four-month prison term that was to be preceded by four months of home detention as part of a three-year supervised release. As part of her three-year probation, Coco was ordered to serve four months at home.

According to the DOJ, the multifaceted fraud that brought in nearly $2 million was led by Toups, McGrath, and Villarroel.

On February 3, Toups will receive his punishment.