Three men have been charged in a scheme to defraud the U.S. Department of Veterans Affairs (VA) of over $9.1 million in education benefits. The defendants include Brian Matsudo, 58, of Honolulu, Hawaii; Marshall Scott, 39, of Kapolei, Hawaii; and Raheem Wells, 37, of Indianapolis, Indiana. Matsudo has pleaded guilty.
Court documents reveal that Matsudo, owner of a massage therapy training school in Honolulu, conspired from November 2016 to November 2022 to secure tuition assistance from the VA. He allegedly failed to disclose the school's non-compliance with VA rules. Scott, who began working for the school in November 2016, submitted false enrollment forms for at least 40 veterans. Wells was a student and involved in recruiting individuals who falsely claimed enrollment.
The scheme was financially beneficial. Matsudo compensated Scott for recruits, while Wells received monthly payments from them.
In April 2025, Matsudo admitted guilt to one count of conspiracy to commit wire fraud, facing up to five years imprisonment. Scott and Wells were charged with conspiracy to commit wire fraud and three counts of wire fraud, each carrying a potential 20-year sentence. Wells also faces an obstruction of justice charge with a similar penalty.
The announcement was made by Matthew R. Galeotti, Kenneth M. Sorenson, Dimitriana Nikolov, and David Porter. The VA OIG and FBI are conducting the investigation.
Trial Attorney Ariel Glasner leads the prosecution against Matsudo, with Jennifer Bilinkas' aid. Glasner and Assistant U.S. Attorney Craig Nolan are handling the case against Scott and Wells.
It is noted that an indictment is merely an allegation, and all defendants are considered innocent until proven guilty.
