According to an investigation by the VA OIG and Social Security Administration OIG, Josephine Casandra Perez-Gorda of Dripping Springs, Texas, defrauded VA and the Social Security Administration by overstating the severity and extent of her spouse’s disability from October 2011 through August 2017. Mr. Perez, now deceased, was an Army veteran who participated in the fraud. The couple claimed Mr. Perez was paralyzed from the waist down from an injury he suffered while on active duty. The ruse included applying for and receiving a specially equipped vehicle, a specially adapted home and additional compensation based on his disability rating. The investigation began after the local news ran a story titled, “Homes for Our Troops Questions Veteran’s Paralysis after Video,” which involved a specially adapted house in Dripping Springs that was gifted to the couple by the nonprofit foundation Homes for Our Troops in December 2013. Although Mrs. Perez-Gorda claimed her husband was “paralyzed from the belly button down,” Mr. Perez was seen walking around the neighborhood and playing basketball. VA OIG agents videotaped Mr. Perez walking around without assistance. Mrs. Perez-Gorda was found guilty at trial in the Western District of Texas on charges of wire fraud, mail fraud, conspiracy to commit healthcare fraud, healthcare fraud, false statements related to a healthcare matter, theft of government funds, and aiding and abetting.

Patrick Michael Dingle, of Parkville, Missouri, was sentenced to eight years in federal prison without parole and ordered to forfeit approximately $4.6 million for his role in a scheme to defraud federal programs that award contracts to firms owned by minorities, veterans, and service-disabled veterans. Dingle and his co-conspirators controlled and operated Zieson Construction Company, which was located in North Kansas City. The company was originally formed in 2009 with Stephon Ziegler, an African-American service-disabled veteran, as the nominal owner. Between 2009 and 2018, the company received approximately 199 federal contracts set aside for award to small businesses owned and controlled by service-disabled veterans or certified minorities. However, Ziegler did not control the day-to-day operations or the long-term decision making at the company. Dingle and his co-conspirators actually controlled and operated Zieson, and also received most of the profits. In a separate case, Dingle was ordered to pay approximately $615,000 in restitution to the Internal Revenue Service and $82,704 in restitution to the Missouri Department of Revenue after pleading guilty to filing false tax returns between 2013 and 2016.

Bruce Minor, of Philadelphia, Pennsylvania, was sentenced to two years in prison, three years of supervised release, and ordered to pay $462,256 in restitution for his scheme to embezzle money from the Philadelphia VA Medical Center. Between December 2015 and September 2019, Minor, a former travel clerk, created fraudulent travel reimbursement claims in the names of at least three other VA medical center employees and then diverted the funds into bank accounts he controlled. This case was investigated by the VA OIG.

Joseph Scott Gray of Lawton, Michigan, was sentenced to five years in federal prison for lying to VA to obtain over $250,000 in benefits to which he was not entitled. To obtain those benefits, Gray repeatedly told VA he could not walk or stand, when in fact, he could. On October 26, 2017, Gray went to the Battle Creek VA Medical Center for an exam, and he arrived in a wheelchair. During the exam, Gray told VA employees he had not walked in 10 years and could not use his left hand. Minutes later, Gray went to a local restaurant, where he was observed freely walking in and out of the building and carrying his leftovers in his left hand. Gray was convicted by a federal jury of four counts: engaging in a conspiracy to defraud the government; providing false statements to VA; theft of government funds; and presenting a false, fictitious, or fraudulent claim for benefits. After trial, the Court found that Gray committed perjury by falsely testifying that his medication caused him to lie to VA employees and that his medication caused him to go from being unable to walk one minute to being able to walk the next. The Court also found that Gray falsely testified that it was his brother, not him, in videos from a local feed store in which Gray was seen walking freely and carrying a 50 lb. bag of cat food. The VA OIG completed the investigation.

Sharnae Every, of Houston, Texas, was charged with one count of conspiracy to commit mail fraud and two counts of mail fraud for preparing and submitting fraudulent Paycheck Protection Program (PPP) loan applications. Allegedly, Every created a fictitious business and then recruited individuals to obtain money from the loan program. She charged individuals between $45 and $120 to create fraudulent PPP loan applications and then falsely certified that they were accurate. Once the loans were funded, Every charged individuals approximately $3,500 each. This case was the result of a referral from the COVID-19 Pandemic Response Accountability Committee. Investigators determined there were at least 110 PPP loan applications in the Thibodeaux, Louisiana, area that all had the same invoices and federal tax forms with the same business name and amounts. The VA OIG helped with this multiagency investigation.

Mark Schena of Los Altos, California, the president of Arrayit Corporation—a Silicon Valley-based medical technology company—was convicted of participating in a scheme to mislead investors, commit healthcare fraud, and pay illegal kickbacks in connection with the submission of more than $77 million in false and fraudulent claims for COVID-19 and allergy testing. Schena defrauded Arrayit’s investors by claiming that he invented revolutionary technology to test for virtually any disease using only a few drops of blood, claiming that he was the “father of microarray technology” and on the shortlist for the Nobel Prize. Schena also falsely represented to investors that Arrayit could be valued at $4.5 billion based on purported revenues of $80 million per year, concealing that the company was on the verge of bankruptcy. Schena also orchestrated an illegal kickback and healthcare fraud scheme that involved submitting fraudulent claims to Medicare and private insurance for unnecessary allergy testing. Arrayit ran allergy screening tests on every patient for 120 different allergens, regardless of medical necessity. In order to obtain patient blood specimens, Schena paid kickbacks to marketers in violation of the Eliminating Kickbacks in Recovery Act and orchestrated a deceptive marketing plan that falsely claimed that the Arrayit test was highly accurate in diagnosing allergies, when it was not, in fact, a diagnostic test. Arrayit billed more per patient to Medicare for blood-based allergy testing than any other laboratory in the United States and billed some commercial insurers over $10,000 per test. In early 2020, when Arrayit’s allergy testing business declined because the COVID-19 pandemic, Schena falsely announced that Arrayit “had a test for COVID-19” based on Arrayit’s blood-testing technology. Seeking to capitalize on the nationwide shortage of COVID-19 testing, Schena orchestrated a deceptive marketing scheme that claimed that Dr. Anthony Fauci and other prominent government officials had mandated testing for COVID-19 and allergies at the same time and required that patients receiving the Arrayit COVID-19 test also be tested for allergies. Schena also falsely claimed that the Arrayit COVID-19 test was more accurate than a PCR test for diagnosing COVID-19 infections, while concealing from investors and patients taking the test that the Food and Drug Administration had informed him that the Arrayit test was not accurate enough to receive an Emergency Use Authorization. Schena is currently awaiting sentencing. The investigation was conducted by the VA OIG, FBI, Department of Health and Human Services OIG, Defense Criminal Investigative Service, and US Postal Inspection Service.

According to a multiagency investigation, Daniel Hurt of Fort Lauderdale, Florida, the owner of several clinical laboratories, allegedly paid kickbacks and bribes to various entities who supplied referrals and orders for genetic cancer screening tests for Medicare and other healthcare benefit program beneficiaries, without regard to medical necessity. Medicare reimbursed the laboratories without knowing that the services were not medically necessary or were procured through the payment of kickbacks. From January 2019 to October 2021, Hurt, through the laboratories, submitted or caused to be submitted approximately 350,000 claims to Medicare. The scheme resulted in Medicare paying the laboratories at least $53.3 million for test claims, with Hurt receiving at least $26.9 million from the reimbursements. Hurt was charged in the District of New Jersey of one count of conspiracy to commit healthcare fraud. The investigation was conducted by the VA OIG, FBI, Department of Health and Human Services OIG, and Defense Criminal Investigative Service.

The global healthcare company Novo Nordisk Inc. has agreed to pay $6.3 million to resolve allegations that it violated the False Claims Act by selling items to the United States that were manufactured in nondesignated countries in violation of the Trade Agreements Act of 1979. The Trade Agreements Act restricts the procurement of goods under certain government contracts to purchases from specific designated countries. From July 2012 through November 2020, Novo Nordisk allegedly sold to US government agencies its NovoFine 30G 8 mm needles and 32G 6 mm needles—all of which were manufactured in nondesignated countries. The investigation was conducted by the VA OIG, Department of Health and Human Services OIG, Defense Criminal Investigative Service, and Army Criminal Investigation Division.

Kevin A. Divoll of Royalston, Massachusetts, was indicted on one count of distribution of child pornography and one count of possession of child pornography. Divoll, an employee at the Northampton VA Medical Center in Massachusetts, was identified as the owner and user of a device allegedly used to distribute child pornography over the medical center’s public Wi-Fi from May to July 2022. A search of his residence found that Divoll possessed child pornography that involved a prepubescent minor and a minor who had not attained 12 years of age. The VA OIG and VA Police conducted the investigation.

In 2018, Jonathan Michael Rouffe of Boca Raton, Florida, and his coconspirators established a conglomerate of durable medical equipment (DME) supply companies. During the creation of the companies, they lied to Medicare to secure billing privileges, including placing the companies in the names of straw owners. By concealing their true ownership, the conspirators gained control of more companies, which Medicare generally prohibits, enabling them to submit high volumes of illegal DME claims. During the course of one year, Rouffe and his coconspirators submitted more than $20 million in illegal DME claims, resulting in over $10 million in payments from Medicare and CHAMPVA. To attain such high volumes of claims, Rouffe and his coconspirators used illegal bribes and kickbacks. Specifically, they illegally purchased thousands of DME claims from so-called “marketers.” On invoices, the parties disguised the illegal kickback transactions as marketing services, and the coconspirators claimed that the DME prescriptions had been generated through “telemedicine,” despite no telemedicine actually occurring. Instead, doctors were bribed in exchange for DME approvals. Rouffe was sentenced to four years in prison, forfeiture of over $3 million, and restitution of approximately $11 million after previously pleading guilty to conspiracy to commit healthcare fraud. This case was investigated by the VA OIG, Department of Health and Human Services OIG, and FBI.

Jose Torres of Shelbyville, Delaware, conspired and agreed with others to unlawfully purchase short-supply drugs and resell those drugs to wholesale distributors. Torres and another company entered business arrangements with retail pharmacies that were not licensed to engage in the wholesale distribution of prescription drugs. He used the business arrangements with retail pharmacies to purchase prescription drugs from authorized distributors, only to resell those drugs to wholesale distributors at a significant markup. For example, on March 2020, Torres purchased hydroxychloroquine sulfate tablets from a pharmacy located in the Eastern District of Tennessee, an unlicensed wholesale distributor, for $178 per unit, and subsequently resold them to a VA medical center for $442 per unit. He pleaded guilty to one count of conspiracy to engage in the unlicensed wholesale distribution of prescription drugs. The investigation was conducted by the VA OIG and FDA Office of Criminal Investigations.

Mary Francis Biggs of Lexington Park, Maryland, participated in a conspiracy organized by her daughter, Angela Farr, in which false and fraudulent documents were submitted to VA in support of disability claims in the name of Biggs’ husband. The fraudulent documents stated that the husband was homebound and required full-time assistance for basic tasks such as eating, bathing, and dressing. In fact, he lived an ordinary, active life. For at least some of the time, Biggs and Farr concealed their fraud from the husband. Biggs spent the fraudulently received disability compensation payments on daily living expenses, cruise vacations, and a kitchen renovation, even though she was aware that her husband was not entitled to the payments. As a result of the fraud scheme, from 2016 through 2019, Biggs and her husband received over $170,000 in disability benefits and early retirement pay to which they were not entitled. Biggs was convicted of conspiracy to commit theft of government property and theft of government property. The VA OIG and Social Security Administration OIG investigated the case.

Anthony Kelley of Jackson, Mississippi, the owner of Trendsetters Barber College, was sentenced to one year in prison, three years of supervised release, and more than $402,000 in restitution after pleading guilty to wire fraud. From October 2016 to March 2019, Kelley offered a master barber course that was not an accredited course of study approved by the state’s Board of Barber Examiners. Kelley fraudulently represented that this course was an approved course of study and as a result was allowed to collect GI Bill money from veterans enrolled in the program. At least two veterans were enrolled in the course using their GI Bill benefits and, as a result, the VA made interstate wire transfers of federal funds to Kelley based on his fraudulent representations. The VA OIG investigated this case.

An investigation by the VA OIG and Social Security Administration OIG found that Bruce Hay, a veteran from Greeley, Kansas, fraudulently misrepresented the extent of symptoms related to a conversion disorder diagnosis to receive VA disability benefits. Hay claimed he had constant jerking movements and tremors; could walk only with the use of a walker; and could not perform daily activities, such as bathing, dressing, and eating. During VA examinations, he faked and exaggerated physical symptoms, displaying a significant limp, muscle spasms, and head bobs. Based on these misrepresentations, Hay was found to be 100 percent disabled by VA and as a result received more than $450,000 in VA benefits. Information collected through surveillance and testimony, however, showed Hay’s claims of mobility limitations to be false. Without assistance, he engaged in residential construction, hunted deer, drove regularly, and hauled more than a million pounds of scrap metal. A federal jury convicted Hay of wire fraud and theft of government funds.

A VA OIG investigation found that Zachary Barton, a South Florida veteran and self-proclaimed bodybuilder, exaggerated his mental and physical impairments and received more than $245,000 in VA benefits to which he was not entitled. Barton admitted he lied on a mental health test by reporting to VA that he had been in combat, qualifying him for posttraumatic stress disorder benefits. He also reported that he could not lift more than 10 to 20 pounds or walk without a cane; however, surveillance footage and social media evidence showed Barton had no such limitations. Based on his lies, Barton was found to be 100 percent disabled by VA. He was sentenced to one year in prison and more than $245,000 in restitution.

From 2013 to 2018, Universal Helicopters Inc., a private helicopter flight instructor training company, and Dodge City Community College allegedly made false statements to VA regarding enrollment in the their helicopter flight instructor program in order to obtain VA funding. As part of the Post-9/11 GI Bill program, VA provides tuition and fee payments to qualifying schools on behalf of eligible veterans. To qualify for the program, a school is required to certify to VA that no more than 85 percent of the students for any particular course are receiving VA benefits. This requirement, commonly referred to as the “85/15 rule,” is intended to prevent abuse of Post-9/11 GI Bill funding by ensuring that VA is paying fair market value tuition rates since at least 15 percent of the enrolled students would be paying the same rate with non-VA funds. The settlement resolves the following allegations: (1) the training company and community college falsely certified compliance with the 85/15 rule when the flight instructor program included certain expensive classes that were taken almost exclusively by veterans, and (2) to reach the required 15 percent threshold, the community college counted part-time students enrolled in only one online class per semester as full-time students, in violation of VA rules. The VA OIG assisted in this multiagency investigation.

Sarah Jane Cavanaugh, 31, admitted that she falsely claimed to be a wounded veteran who had been awarded the Purple Heart and Bronze Star, and that she used those claims, the stolen identities of actual veterans, and fraudulent documents that she created to obtain charitable services intended for injured veterans. Additionally, while employed at the Providence VA Medical Center, she used her position as a licensed social worker to gain access to medical records belonging to a marine who was battling cancer. Cavanaugh then used this information to create fraudulent documents and medical records in her own name, indicating that she was an honorably discharged marine stricken with cancer. A search of Defense Department records indicates Cavanaugh never served in any branch of the military. Cavanaugh is scheduled to be sentenced on November 10, 2022.

Kevin Divoll, of Royalston, Massachusetts, was charged with one count of possession of child pornography. According to the charging document, investigators identified the internet protocol address of a device distributing child pornography and determined the device was using the public Wi-Fi at the Edward P. Boland VA Medical Center in Leeds. Further investigation identified that Divoll, an employee at the VA medical center, as the owner and user of the device. It is alleged that during a search of Divoll’s residence, a laptop, external hard drive, and cell phone were found to contain child pornography.

Lisa Heino, of Newport, Rhode Island, pleaded guilty to two counts of theft of public funds for stealing approximately $74,000 in VA and Office of Personnel Management (OPM) benefits from a veteran she was supposed to be protecting. In May 2014, Heino was appointed by the Massachusetts state court to serve as the conservator for the victim who was a veteran and retired federal employee. Later, in October 2014, Heino became the OPM representative payee for the victim as well. In these roles, Heino had access to the benefit payments that were directly deposited into the victim’s bank account. She then transferred these payments to her own bank account and used the funds for her own expenses. Sentencing is scheduled for December 2, 2022.