Decorated pilot convicted in VA fraud case
02-22-2010 12:29 PM
Dean Anthony Toth was a decorated Marine pilot with no criminal record who flew for Southwest Airlines.
Then Daniel Ryan Parker, a supervisor for the Disabled American Veterans charity, moved in next door to Toth in Oldham County.
Toth, 38, eventually became one of 13 veterans from all four service branches and one non-veteran who conspired in a scheme to defraud the U.S. Department of Veterans Affairs of nearly $2 million in disability benefits by submitting altered or counterfeit medical records showing they suffered from illnesses and conditions, ranging from lung cancer to frostbite to depression.
Toth, the only defendant to contest the charges at trial, claimed the $62,000 he gave Parker was a donation to the DAV — not bribes to alter his records entitling him to $93,000 in back benefits and $2,500 a month for life.
But after an opening statement Thursday in U.S. District Court in which a prosecutor laid out how he would prove Toth’s guilt, the defendant pleaded guilty Friday to conspiring to defraud the VA by submitting false claims that he suffered a 100 percent hearing loss. In fact, his hearing was perfect, according to tests done by Southwest over the past three years.
In a plea deal, the government recommended that Toth be sentenced to 21 months in prison and ordered to pay restitution of $149,234 to the VA when he is sentenced May 17 by Judge Jennifer Coffman.
Toth was the last of 14 defendants to plead guilty in the scheme, which the government said was masterminded by Parker and Jeffrey Allan McGill, who evaluated claims at the VA Medical Center in Louisville.
“This was an offensive crime,” Assistant U.S. Attorney David Weiser said in an interview after Toth entered his plea. “We’ve got two wars going on and veterans who are serving our country and have been and who need this money that the defendants took without any basis other than greed.”
Toth’s co-counsel, Frank Mascagni, said that the “terrible tragedy” of his client’s case is that he never would have gotten involved if Parker hadn’t moved in next door.
Weiser told the jury how Parker and McGill launched the scheme in 2003, realizing that they could substitute bogus medical reports in the files of applicants “saying anything they wanted” and also backdate claims, entitling veterans to large, lump-sum payments when their altered applications were approved.
They first tested their plan with the cooperation of Parker’s then-girlfriend, Nicolette Marie Wages, changing her records to show she suffered from bipolar disorder. She collected a check for $46,000, which she, Parker and McGill shared, Weiser said.
“They thought, ‘Let’s do this again,’” Weiser said, and began recruiting friends and family members. Among them was Parker’s mother, Susan Diane Smith, the only non-veteran involved. She filed a claim on behalf of her husband, an Air Force veteran, without his knowledge, according to court records.
Parker and McGill cut a deal with the other participants in which they took two-thirds of the back payments and the applicants kept the rest, in addition to their tax-free monthly disability checks.
The U.S. attorney’s office said Toth served on active duty in the Marine Corps from 1995 to 2004, and was an F/A-18 pilot who was named the 2003 Marine Instructor of the Year.
Toth first filed for hearing-loss benefits in 2004, when he lived in Mississippi. His claim was rejected because all the hearing tests he underwent while in the service came back normal.
But after Parker moved in next door, he told Toth how he could help get the denial reversed, Weiser said.
Working with McGill, Parker inserted a new hearing exam in Toth’s VA file showing he was 100 percent deaf in both ears, and they removed military tests showing otherwise, according to Weiser.
In an opening statement in which he accused Parker and McGill of lying to get more lenient sentences, Mascagni said he would prove that Toth didn’t know about the tampering.
Mascagni admitted Toth paid Parker $62,000 in 2007 and 2008, but said Toth thought the payments were donations to the DAV.
Weiser, however, said he would show through tax records that Toth claimed no charitable deductions on his income tax return that year.
Weiser told the jury he would show that Toth knew exactly what he was paying for — and that just like most of the other co-conspirators, Toth gave Parker exactly two-thirds of his lump-sum disability back payment.
Through bank records, Weiser said, he would prove that Toth made the first $30,000 in payments in cash, withdrawing exactly $10,000 on each of three occasions from National City Bank branches, including two on one day — to avoid federal cash reporting requirements.
And Weiser said he would show how Toth paid the balance of the money to Parker through a cashier’s check written to Parker, which would make no sense if the donation was for the DAV.
Weiser also said that when Toth requested a reduction of his Oldham property taxes, based on his disability, he told a deputy clerk that he was left 100 percent disabled from post-traumatic stress disorder after fighting in Iraq. Weiser said Toth’s military records show he never served there.
Finally, Weiser said that Toth lied to agents from the FBI and the VA inspector general initially, saying he’d only given Parker about $5,000.
Under the plea bargain, the prosecution agreed to dismiss charges of bribery, money laundering and lying to federal agents. Toth pleaded guilty to conspiracy and making illegally structured bank withdrawals.
Parker, McGill and Wages are scheduled to be sentenced April 19, along with Smith, Craig Thomas Bush, James Edward Bryant, Thomas Darrell Bryant, Randall Lee Adkins, Guy Allen Condon, James Darrell Grimes, Michael Douglas Harper and Joe Davis Snooks Jr. Daniel Joseph Milliner is to be sentenced on March 22.
Ashley Rogers, a spokeswoman for Southwest Airlines, said Toth continued to work for the airline while he was fighting the charges but that his status will be re-evaluated.
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