Fraudulent Fiduciary

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The Department of Veterans Affairs (VA) established the VA Fiduciary Program to protect Veterans and other beneficiaries who are unable to manage their own financial affairs due to injury, illness or age. It is the fiduciary’s responsibility to make sure that the money paid by the program is used for the well-being of the beneficiary. A Thompsontown, Pennsylvania man who agreed to be the VA Fiduciary for a disabled veteran thought he could spend the monthly checks that came for nearly a decade on himself. Read on to find out how today’s fraudster committed Social Security Fraud by stealing from a veteran who could no longer care for himself.

In 2006, today’s fraudster became the veteran’s VA Fiduciary and Legal Custodian after he was deemed incompetent to handle his own financial affairs. (The article does not mention if the man was related to the veteran.) Over almost a decade, the fiduciary spent more than $300,000 in benefits provided by the VA and the Social Security Administration (SSA). (His now ex-wife and children also benefited from the crime.)

From just about the time the fiduciary began collecting benefits for the veteran, he started using the funds for his own benefit. Between January 2009 and August 2016, federal benefits worth $472,260 were deposited into a legal custodian checking account on behalf of the veteran. During the same timeframe, the fiduciary spent $316,360 of the man’s VA and Social Security disability benefits on himself and his then-wife. (About $200,000 was drawn against the account with $157,742 deposited into the fiduciary’s checking account which was held jointly with his wife.)

Would you like to hear how he spent the funds that were meant to care for the veteran? (I thought so.) The fiduciary used his family members to carry out the scam. His children cashed $7,174 in checks written to them and gave the cash back to their father. The father also converted about $23,500 of the government benefits to cash as well. The family enjoyed two new vehicles and all-expense paid trips to Disney World. His wife also paid for some dental work and the fiduciary treated another couple and their children to dinner on him. (Actually, it was dinner on the veteran at the government’s expense.)

The veteran died at the VA Hospital in Lebanon, Pennsylvania during the summer of 2018. It wasn’t long after that the 48-year-old agreed to pay full restitution to the veteran’s estate. Next up in the new year is a trial for the perpetrator’s now ex-wife. (Wouldn’t you like to be a fly on the wall in that trial? I’m sure there will be some finger-pointing involved in that courtroom.)

Fiduciaries are required to provide details about the funds managed for the veteran to the VA on a regular basis. Today’s fraudster submitted eight falsified annual accountings to the VA, claiming that he spent $402,408 on the veteran’s care. This fraudster’s crime was not an accident. The Pennsylvania man who committed Social Security Fraud had deliberate intentions. Ironically, today’s perpetrator committed his crime at the expense of honest taxpayers, the government and someone who served his country so that everyone, including his fiduciary, could experience the many benefits that America has to offer. (I guess the fiduciary was not satisfied with his basic benefits and let greed determine his actions.)

Today’s “Fraud of the Day” is based on an article entitled, “Man pleads guilty to defrauding disabled veteran, Dept. of Veterans Affair and Social Security Administration,” posted on Fox43.com on November 21, 2018.

HARRISBURG — A Thompsontown man pleaded guilty Wednesday to defrauding a disabled veteran, the Department of Veterans Affairs (VA) and the Social Security Administration out of more than $300,000 over an almost 10-year period, according to the United States Attorney’s Office for the Middle District of Pennsylvania.

Jason Ehrhart, 48, also agreed to make full restitution to the veteran’s estate — he died at the VA Hospital in Lebanon in July 2018. Ehrhart’s now ex-wife Laurie is currently scheduled for trial on January 8, 2019 for her alleged involvement in the fraud.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.