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Tuesday, July 13, 1999

Memo: 2 VA employees embezzle $1 million
Fraud blamed on system by which the same employee processes claim and OKs payments
By Deb Riechmann
Associated Press

   WASHINGTON - Two employees of the Veterans Affairs Department embezzled $1.2 million during the past several years, according to an internal VA memo that blames the fraud on lax security and letting the same workers who process claims also authorize payments.
   VA Inspector General Richard Griffin wrote the 37-page report June 17 after he investigated how the employees pocketed government money by setting up fake veterans benefit claims. His report, obtained by The Associated Press Monday, says the VA is reviewing its program that sends payments to 2.7 million poor and disabled veterans.
   Griffin's memo details how a supervisory claims examiner in the VA's regional office in St. Petersburg, Fla., was arrested in January on charges of stealing $615,451 in benefits. The woman, identified in previous news stories as Joy Cheri Brown, made fake disability claims in the name of her fiance, a police officer who was unaware of the scam.
   The memo also describes how a former employee at the VA's New York regional office received more than $620,000 in benefits during a 12-year period. The fraud was uncovered last year when the man, who worked for the VA in 1986 and 1987, was arrested on drug charges in New Jersey and authorities found an identification card bearing the name of a fictitious veteran. At the time, the man was receiving $5,011 in benefits every month.
   "I can report that the perpetrators of the thefts have pleaded guilty, and sentencing is pending," Griffin wrote. "We are exploring techniques to proactively look for ongoing - but as yet undiscovered - frauds."
   The VA inspector general's memo lists 18 weaknesses, including loose computer security and infrequent reviews of long-running claims, that could lead to fraud and theft.
   Ken McKinnon, a spokesman for the VA, said officials were not available to comment on the report.
   But he said the VA has proposed adding 440 claims processors at regional offices where government cutbacks have led to a 20 percent reduction in staffing during the past few years. He also said the VA has been working on ways to tighten computer security in the regional offices.
   Phil Budahn, a spokesman for the American Legion, said it's unclear whether VA fraud is widespread. "There has been a failure of accountability," Budahn said. "We don't know if this is the tip of the iceberg, or the iceberg."

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