Recently, there was a sentencing in an unusual disability benefits fraud case in Fresno, California. This case involved a former veteran, Roger Keith Remy of Bakersfield, who was convicted of altering medical records to obtain VA benefits by making it seem as if it was a service connected disability. As pensions become rarer and retirement savings are not enough for people to retire, I believe there will be an increase in prosecutions for persons who falsify information or documents in order to obtain disability benefits.
The evidence introduced at trial showed that Mr. Remy was a veteran who left the military in 1973. In 2002, he allegedly devised a scheme to get VA benefits for what he claimed was a service connected disability. To support this claim, he obtained medical records from Queens Medical Center in Hawaii relating to admissions he had to this facility in 1974 and 1975 for a tonsillectomy and circumcision. He allegedly altered the documents to make it appear he had been treated for a heart attack earlier in the year, when a heart attack would still be considered to have occurred during his time in the U.S. Army. He then made a photocopy of the medical records to hide the alteration, and submitted them to the Department of Veterans Affairs.
Mr. Remy's initial claim for benefits was granted, and he subsequently received over $200,000 in benefits. The plot thickened, however, in January 2005 when Mr. Remy asked for his benefits to be made retroactive to 1974. He supported his claim for retroactive benefits by resubmitting the same altered medical records. The altered records were discovered when the Veteran’s Administration noticed the documents looked a little odd, and they obtained copies of the real medical records directly from Queens Medical Center in Hawaii. The 2005 claim was thereafter denied. Had the claim been successful, he would have been entitled to receive retroactive benefits of over $570,581.
After a jury trial in the federal court in the Eastern District of California, Mr. Remy was found guilty on February 26, 2009 of three counts of submitting false documents and three counts of submitting false claims to the Department of Veterans Affairs.
On September 8, 2009, Roger Keith Remy of Bakersfield, was sentenced by United States District Judge Oliver Wanger to two years in prison. He was also ordered to pay $220,618 in restitution to the Department of Veterans Affairs. Judge Wanger, in sentencing Mr. Remy, said that he had not accepted responsibility for his crime, and that the magnitude and intent of the scheme required a prison sentence of 24 months.
Attorney Commentary: First, the sentence was lengthy in this case because the judge found that Mr. Remy had "not accepted responsibility for his crime" and this arises often after a defendant has exercised his right to go to trial. If there is a conviction after trial where a plea agreement was offered with a much lower sentence, there is essentially a "tax" for exercising one's constitutional right to have a jury trial.
If a defendant testifies at trial and is later convicted, there is a risk that in federal cases there will be an increase in the sentence based on "obstruction of justice" since the jury has found that they did not believe the defendant's testimony. In state cases, the defendant's testimony at trials can affect the judge's sentence depending on the credibility of the testimony.
Second, as noted above, the temptation for individuals to falsify information or documents in order to obtain disability benefits is strong especially when 401ks and retirement funds have lost much of their value and the old-fashioned pension is not available to most workers.
Third, when we see individuals making false statements or submitting false documents to insurance companies and governmental agencies it has not often been well thought out. It is often rationalized by the individual for various reasons (they have been paying for disability insurance for years, they are entitled to benefits, insurance companies are large, they have paid for insurance for years and never made claims, and the false representations will not adversely affect the company or government, etc.).
The conduct was usually not intended to be a "scheme to defraud" in their mind. This may be denial but we often find it to be true. It was usually never been considered what would happen if the false representations were ever discovered. Usually, they think that all they need to do is to repay the amount and there will not be criminal prosecution. Sometimes this is the case but there is now a higher risk of prosecution. The tolerance for "fraud" in this post-Enron/Madoff world where our economy has been crippled and governments are in deep debt has waned.
Fourth, if our clients are the subject of such investigations, we do our best to fully evaluate the case and the risks of prosecution at an early stage. If there is the opportunity to settle civilly, we pursue that angle and realize that there may not be much room to negotiate if it is not successful. Moreover, although civil settlement agreements cannot promise "no prosecution," often confidentiality clauses can help ensure that there will be no communications with prosecuting agencies.
Other times, we will advise the client to cease the conduct so that the statute of limitations will begin to run. The statute of limitations in fraud cases is lengthy and this is a waiting game. In Mr. Remy's case if he had not continued his conduct in 2005, he would not have been discovered or charged.
Posted by Tracy Green. Any questions or comments should be directed to:
tgreen@greenassoc.com. Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have developed an expertise in health care, insurance fraud and disability insurance fraud cases over the past 20 years. The firm website is
http://www.greenassoc.com/
