The Greedy Side of Veterans Day: Robbing the VA

Veterans Affairs investigator Charles Augone keeps that Benjamin Franklin reminder on his office wall. It helps him understand good folks gone bad.

False tax returns, welfare fraud, Medicare swindles, fake workers’ comp injuries--some people defraud the government with ease.

But cheating our veterans? That one just seems especially foul.

Today is Veterans Day, maybe a good time to point out that the U.S. Department of Veterans Affairs is looking for our help in uncovering crimes against the VA.

It’s a more serious problem than you may realize.

Last month, a 61-year-old Anaheim Hills woman was charged in federal court with lying about dependents to receive increased VA benefits for her and her disabled husband, a veteran.

More and More Rip-offs

The woman, appointed as her husband’s fiduciary, is accused by the U.S. Attorney’s office of filing a claim for one child not qualified and for another child who did not even exist. Total loss to the government, the VA says, is $35,000. The woman, who has pleaded not guilty, could not be reached for comment.

And on Monday, pharmacist Francis Oliva, 62, of Mission Viejo pleaded guilty in federal court in Los Angeles to a single count of receiving stolen property in connection with a drug theft at the VA’s pharmaceutical center in Long Beach.

Oliva, who worked there, was accused of slipping prescription drugs from the pharmacy to an outside pharmacist, who then resold the drugs to the public. The amount listed in the case was $4,579. Oliva is scheduled to be sentenced in January.

Ripping off the VA is big business. The dollar amount may well be in the hundreds of millions, said David Gamble, a VA Deputy Assistant Inspector General in Washington. In a six-month report to Congress, the VA says it recovered $12.6 million from theft cases in that period.

Most cases investigated turn out to be inadvertent error or just stupidity by someone applying for benefits, not criminal intent. The majority of cases that do involve crime are settled with restitution before a conviction. Even so, more than 100 Americans are convicted each year of some type of VA fraud.

“Many people think it’s OK to cheat the government because it’s a nameless, faceless entity,” Gamble said. “They think, ‘Who’s the victim?’ For us, the victims are the veterans we’re trying to help. The fraud costs cut into their benefits.”

Giving In to Temptation

So how many ways are there to defraud the VA?

“We never cease to be amazed at what might come next,” said Alan DelPorto, a VA criminal investigator for the Los Angeles office, which covers Orange County. “The ways are as varied as your imagination.”

Here’s just a few:

* Dishonest fiduciaries. Those are trustees appointed to handle VA finances for a veteran not competent to handle his or her own affairs. Quite often it’s a spouse or relative.

“Unfortunately, many fiduciaries give in to temptation once they get their hands on a veteran’s money,” said investigator Augone, who works out of Washington. “They buy a car, head to Vegas. The veteran never sees the check.”

* Dishonest veterans. Some veterans lie about their circumstances to receive benefits they’re not entitled to.

* Dishonest relatives. A typical VA investigation case, Gamble and Augone said, is when a veteran has died and a spouse never tells anyone, so the checks keep rolling in. Or both the veteran and spouse have died, and the children become the crooks.

In a Kansas City case last month, a dishonorably discharged veteran assumed the identity of his brother to use his brother’s VA benefits.

* Dishonest VA employees.

“A nurse steals a drug at a VA hospital and replaces it with saline solution,” Gamble said. “No one notices until a patient’s drug isn’t working because the good stuff went out the door.”

Also, some employees help veterans file false medical claims. Or steal from the pharmacy.

“It’s the employee crime that bothers us most,” Gamble said. “It really undercuts trust in the department.”

* Scams. Laney College in Oakland received embarrassing publicity this year when two employees in the speech department were convicted for taking kickbacks from more than 250 veterans.

Here’s how the widespread scam worked: The VA pays $600 to $1,500 a month to some veterans to return to school. Classroom instructors then certify to the VA that the veteran is attending class and doing well. The two Laney officials were certifying veterans who weren’t attending classes or doing any homework. In exchange, the veterans were paying the pair a small portion of their monthly VA benefits.

The scam spread among veterans through word of mouth. The VA’s congressional report shows 241 Laney veterans have agreed to repay the VA a total of $2.8 million, and another 109 veterans are still negotiating a settlement in exchange for no prosecution.

So how does the VA find out about all these folks defrauding them? Sometimes through local police or suspicions by other government agencies. But the VA’s main source of information comes from the public.

If you know someone cheating on veterans benefits, call this toll-free number: (800) 488-8244.

“It’s true, we’ll get 10 calls that don’t pan out,” said John Brooks, acting chief for the VA’s Los Angeles criminal investigations office. “But that 11th call could be a great tip on something we’d never have known without it. We need your calls.”

Once the VA learns about a fraud case, the guilty should beware: Reports show VA cases resulted in a 98% conviction rate last year.

“Part of our success is that we can play the noble role,” Gamble said. “When we ask people for information, they usually are glad to give it to us, because they hate seeing veterans ripped off too.”

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Jerry Hicks’ column appears Monday and Thursday. Readers may reach Hicks by calling (714) 564-1049 or e-mail to jerry.hicks@latimes.com