The
U.S. Attorney’s Office, Southern District of California released the below
information:
SAN
DIEGO – Dr. Michael Villarroel, who at the time of his crimes was a doctor in
the U.S. Navy, was sentenced in federal court today to one year and one day in
custody after admitting that he and others participated in a scheme to file
false claims to obtain unearned benefits from an insurance program that
compensates service members who suffer serious and debilitating injuries while
on active duty. He was also ordered to pay $180,000 as criminal forfeiture. A
restitution hearing is scheduled on April 2.
Villarroels’ sentence followed his guilty plea to conspiracy to
commit wire fraud. According to his plea agreement, participants in the scheme
obtained approximately $2 million in payments from fraudulent claims submitted
to the insurance program - Traumatic Servicemembers Group Life Insurance
Program, or TSGLI.
Villarroel admitted that from 2012 to at least December 2015, he
conspired with other members of the Navy to obtain money from the United States
by making claims for life insurance payments based on exaggerated or fake
injuries and disabilities. Villarroel certified that he reviewed the records
and determined the injuries were legitimate when in fact he knew they were fake
or exaggerated. At times Villarroel falsely stated that he interviewed the
claimant and provided others service members actual medical records to be used
in fabricating claims. Villarroel knew the claims were false but he signed off
on them to receive kickbacks once the fake injuries resulted in insurance
payouts.
“As fraudulent schemes go, this one was egregious,” said U.S.
Attorney Tara McGrath. “Today the defendant found out there is a high price to
be paid for pocketing money intended for injured and traumatized
servicemembers.”
“Fraudulent activities compromise the integrity of government
programs and services and divert compensation from deserving recipients,” said
Special Agent in Charge Rebeccalynn Staples with the Department of Veterans
Affairs Office of Inspector General’s Western Field Office. “This sentence
holds the defendant accountable for his dishonest actions, and the VA OIG will
continue to work tirelessly with our law enforcement partners to ensure schemes
like this are uncovered, investigated, and prosecuted to the fullest extent of
the law.”
“Michael Villaroel’s blatant abuse of his position of trust
within the United States military is unscrupulous and this sentencing proves
that such actions will not be tolerated,” said FBI San Diego Acting Special
Agent in Charge John Kim. “The FBI and its law enforcement partners remain
committed to aggressively disrupt, and, ultimately, bring to justice anyone who
defrauds the United States government.”
“Dr. Villarroel betrayed his oath to the Navy and has been held
to account for his role in a scheme that diverted more than $2 million in
critical resources away from wounded service members recovering from traumatic
injuries,” said Special Agent in Charge Greg Gross of the NCIS Economic Crimes
Field Office. “NCIS and our partners are committed to rooting out corruption
that threatens the safety and wellbeing of our service members and their
families.”
The Traumatic Servicemembers Group Life Insurance (TSGLI)
program was administered by Prudential for the Navy and funded by
servicemembers and the Department of the Navy. TSGLI provided financial
assistance to servicemembers recovering from traumatic injuries.
According to court records, Villarroel’s co-defendants were part
of the Explosive Ordinance Disposal Expeditionary Support Unit One (“EOD ESU
One”) based in Coronado, California.
Assistant U.S. Attorneys Peter Ko and Mark Conover for the
Southern District of California are prosecuting the case.
DEFENDANT
18CR1674-JLS
Michael Villarroel
51
Coronado, California
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SUMMARY OF CHARGES
18 U.S.C. § 1349, Conspiracy to Commit Wire Fraud
Maximum Penalty: Twenty years in prison, $250,000 fine, forfeiture and
restitution
Others:
18 U.S.C. § 1349, Conspiracy to Commit Wire Fraud
Maximum Penalty: Twenty years in prison, $250,000 fine, forfeiture and
restitution
18 U.S.C. § 1343, Wire Fraud
Maximum Penalty: Twenty years in prison, $250,000 fine, forfeiture and
restitution
18 U.S.C. § 287, Making a False Claim
Maximum Penalty: Five years in prison, $250,000 fine
AGENCIES
Federal Bureau of Investigation
Naval Criminal Investigative Service
Department of Veterans Affairs - Office of Inspector General
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