A U.S Navy doctor appeared in federal court March 28 to plead guilty to defrauding the Navy, costing it upwards of $2 million by fabricating false or exaggerated injury reports.
Dr. Michael Villarroel admitted he and others conspired to defraud the Navy by faking or exaggerating injuries in an effort to get insurance payments, according to a March 28 news release. He and his co-conspirators obtained approximately $2 million from the Traumatic Servicemembers Groups Life Insurance program.
“These military healthcare dollars, which were intended to benefit injured and traumatized service members, instead funded a fraudulent windfall,” U.S. Attorney Randy Grossman said in the release. “The U.S. Attorney’s Office and our agency partners will relentlessly pursue justice for victims of fraud schemes that harm our service members and taxpayers.”
Villarroel confessed he was aware the alleged injuries were fictitious or exaggerated when he approved applications for part of the insurance payouts, the release reported. The Traumatic Servicemembers Groups Life Insurance program, which is supported by military personnel and the Navy, paid approximately $2 million to participants of the scheme. Villarroel personally received kickbacks totaling more than $180,000.
He acknowledged conspiring to commit wire fraud beginning in December 2012 with Christopher Toups, a chief petty officer construction mechanic in the Navy; Kelene Meyer, Toups' wife and a nurse; and others, according to the release.
Toups encouraged additional service members to file claims and instructed them to provide their medical information to Meyer, the release said. He also asked for a portion of the insurance money in exchange and gave Meyer and Villarroel their respective percentages. Meyer fabricated records to represent fictitious or exaggerated injuries using her knowledge of medicine.
For claims to be eligible and processed, Villarroel said he evaluated medical documents and confirmed any limitations compatible with the injuries, the release said. He occasionally made false claims that he interviewed the claimant to corroborate his conclusions. He also allowed Meyer access to other people's medical records so she could make up data.
Toups made payments to Villarroel in cash and by cashier's check, according to the release. Villarroel occasionally carried out transactions for sums under $10,000 to get around the need to disclose currency transactions.
Villarroel is the 10th defendant to enter a guilty plea to offenses committed as part of the plan, the release said. Members of Explosive Ordinance Disposal Expeditionary Support Unit One, headquartered in Coronado, Calif., comprised a number of the conspirators.
