A federal jury has sentenced a former Navy chief petty officer to 30 months in prison for his role in defrauding $2 million from a life insurance program that helps severely injured service members, federal officials announced Tuesday.
Christopher Toups, who pleaded guilty in October to conspiracy to commit wire fraud, admitted conspiring with his then-spouse, former Navy nurse Kelene McGrath, and Navy doctor Michael Villarroel to submit falsified claims for life insurance payments, according to the Justice Department’s Southern California District.
According to his plea agreement, those involved in the scheme collected $2 million from fraudulent claims submitted to the Traumatic Servicemembers Group Life Insurance Program, of which Toups received approximately $400,000.
“Lying and stealing funds intended for injured service members is appalling,” said US Attorney Tara McGrath in a Justice Department news release. “The United States Attorney’s Office is committed to protecting those who serve.”
Toups submitted personal claims for fake, embellished injuries and disabilities, and also encouraged other Navy service members to submit their own claims – occasionally instructing them to submit medical records to McGrath, the Justice Department said.
McGrath would then falsify the medical records to describe far-fetched or fabricated injuries, while Villaroel would sign off on the records.
Toups admitted that he also pressured those who received claims payments to give him a portion of the money as part of a “processing fee,” which he occasionally shared with McGrath and Villarroel.
The Justice Department said Toups and others also “conducted financial transactions in amounts under $10,000 to avoid perceived financial reporting requirements,” according to a press release.
The Department of the Navy and service members fund the Traumatic Servicemembers Group Life Insurance Program, which compensates service members who suffer “debilitating” injuries while on active duty.
“Stealing from a programme set up to help injured and disabled service members diverts compensation from deserving individuals,” said Stacey Moy, special agent in charge of the FBI in San Diego, in a press release. “Knowingly defrauding the American people, especially those who protect our country, will not be tolerated.
Toup’s service record, previously obtained by Military Times, shows that he served as a construction mechanic with the Explosive Ordnance Disposal Expeditionary Support Unit in Coronado, California. He retired in 2017 as a petty officer first class.
Toups is one of at least 11 people charged in connection with the scheme, including Ronald Olmsted and Anthony Coco, who were assigned to Toups’ unit. They have already been sentenced to prison and supervised release.
