DOJ: Final family member sentenced in $1.1M VA disability fraud scheme

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The seal of the U.S. Department of Justice is seen on a podium during a press conference. The DOJ has launched its largest-ever victim compensation fund for survivors of sex trafficking facilitated through Backpage.com. (Photo by Anna Moneymaker/Getty Images)

The Department of Justice (DOJ) says the last member of a family that operated a years-long Department of Veterans Affairs (VA) disability scheme has been sentenced to prison. The VA Office of the Inspector General (VA-OIG) says the scheme stole more than $1.1 million in VA funds.  

The backstory:

The DOJ says Kelly M. Lee-Carroll, 58, of Kent, Washington, served in the Army for three months in 1986 and then joined the Army Reserves from 1986-1994 and in 2012 claimed a service-related disability and started receiving caregiver funding in 2013. Prosecutors said Lee-Carroll qualified for some disability payments but not the more than $11,000 per month that she was receiving.

Court records show that Lee-Carroll recruited her sister, Katoya F. Grant, 41, and her son Robert H. Nelson III, 28, to the scheme by designating them as her caregivers so that the VA would pay them for the hours they claimed they cared for Lee-Carroll.  Prosecutors say Grant and Nelson III claimed to be caring for Lee-Carroll while they were clocked in at other jobs such as driving a truck or working as an administrative assistant. In addition, prosecutors say on some of the occasions they claimed to be caring for Lee-Carroll, she was traveling to Las Vegas, Tennessee, or internationally to Mexico or Jamaica, without any caregivers.

What they're saying:

"As a veteran, I find this type of fraud against our programs despicable.  These benefits to pay for care, and for caregivers, need to be carefully utilized so that they serve veterans as intended. They should not go for second homes, cars, exotic trips, or casino gambling as they did in this case. This defendant not only pays the price for her conduct, she roped in her family members who now have felony convictions," said First Assistant U.S. Attorney Neil Floyd.

"This sentence sends a clear message that individuals who steal VA benefits will be held accountable. The VA OIG will continue to identify and eliminate fraud by seeking prosecution of those who swindle VA benefit programs that are intended to help veterans, their families, and caregivers. We thank the U.S. Attorney’s Office for their efforts in this investigation," said Special Agent in Charge Dimitriana Nikolov with the Department of Veterans Affairs Office of the Inspector General Northwest Field Office.

Dig deeper:

The DOJ says all three defendants pleaded guilty to conspiracy to commit theft of government property and a count of health care fraud. Lee-Carroll was sentenced to 17 months in prison and ordered to pay $932,142 in restitution. Her son was sentenced last November to 14 months in federal prison and was ordered to pay $282,698 in restitution and her sister was sentenced earlier this month to a ‘time-served’ sentence with six months of supervised release and was ordered to pay $293,787 in restitution.

The case was investigated by the VA-OIG and prosecuted by Assistant United States Attorney Yunah Chung.