Tuesday, July 1, 2014

Ex-Marine Officer Sentenced For VA Disability Fraud And Submitting False Expenses For Active Duty

In a disability and travel payment expense fraud case, a former Marine Captain Shawn A. Joyce was sentenced to four months in federal prison, to pay restitution of $90,602, and three years of supervised release by U.S. District Court Judge John Houston on June 30, 2014. This case was charged as two counts of wire fraud in violation of 18 U.S.C. Section 1343 based on the fact that the Veterans Affairs Administration (VA) and Department of Defense directly deposited funds into Mr. Joyce's bank account.

The facts that Mr. Joyce admitted in his plea agreement regarding expense fraud are as follows.  On November 1, 2008, Mr. Joyce was discharged with the rank of Captain and entered the Marine Corps Reserve. Under certain circumstances, reservists who are called to active duty become eligible for an allowance for lodging, transportation, meals and incidental expenses (travel payments). From 2009 to 2010, Mr. Joyce admitted in his plea agreement that he falsely claimed to be paying $4,030 per month for rent in Solano Beach and in 2011, falsely claimed to be paying $3,700 month per rent in Fountain Valley. The Prosecution intended to prove intent to defraud by the fact that Mr. Joyce created documents that were not real or bona fide rental receipts and created an email in the name of a former roommate and landlord which was used to forward information to the Department of Defense.

The disability fraud was based on knowingly receiving VA benefits while on active duty. Before his initial discharge in November 2008, Capt. Joyce applied to the VA for disability benefits and received a disability rating. Under federal law, a service member receiving VA disability benefits is not entitled to simultaneously receive active duty pay. In November 2008, before his initial discharge Mr. Joyce applied to the VA for disability benefits. In 2010, as a reservist Mr. Joyce was back on active duty which was scheduled to end on June 22, 2010. On June 17, 2010, Mr. Joyce applied for an increase in his VA disability rating. Mr. Joyce began receiving disability benefits effective June 22, 2010 but then received a new set of active duty orders that same date.

The Prosecution intended to show intent to defraud on the disability payments since there was evidence that after Mr. Joyce received a new set of active duty orders effective June 22, 2010, he contacted the VA afterwards in September 2010 and January 2011 and asked for increased amounts in his disability rating without telling the VA he was on active duty.

There appear to be mitigating circumstances in this case that relate to Mr. Joyce's disability and psychological conditions. However, that did not prevent the Court from sentencing Mr. Joyce to federal prison for a short term which should make him eligible for house arrest.

There is an increase in the prosecution of disability insurance fraud cases especially where the individuals are government employees such as former military and law enforcement and professionals. One common factor that I see in these cases is that individuals receiving the benefits fear stopping the benefits or misrepresentations for fear of being discovered even though these are facts that will assist them greatly in the event charges are ever filed. In addition, there are ways to repay the amounts to mitigate the damages before charges are filed. Voluntary disclosure works in many cases although each case is different. Often the individuals in the midst of these issues cannot evaluate them objectively.

Posted by Tracy Green, Esq.
Phone; 213-233-2260
Email: tgreen@greenassoc.com


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