An aerial view on May 4, 2023, of a Navy Enterprise Tactical Command and Control tent configuration used by Explosive Ordnance Disposal Group 1 during a Navy exercise at Naval Amphibious Base Coronado, Calif. (Sara Eshleman/Navy)
WASHINGTON – A former Navy chief petty officer has been sentenced to more than two years in prison for defrauding a military insurance program that’s supposed to help seriously injured and disabled veterans, federal authorities said.
The former sailor, Christopher Toups, was accused in federal court on multiple charges in the case including wire fraud, conspiracy and making fraudulent insurance claims.
Toups admitted to carrying out his scheme between 2012 and 2015 and conspiring with several people to receive thousands of dollars to which he was not entitled. Prosecutors said Toups’ wife, various sailors and even a Navy doctor were also in on the scheme, which involved filing bogus claims with the Traumatic Servicemembers’ Group Life Insurance program.
“Participants in the scheme obtained approximately $2 million in payments from fraudulent claims,” the Justice Department said in a statement. “Toups personally obtained about $400,000.”
Toups and the others sometimes intentionally made money transactions of less than $10,000 to evade perceived financial reporting requirements, prosecutors said.
“Toups participated in a fraud scheme that defrauded the American taxpayer and diverted vital money, care and resources from service members recovering from traumatic injuries,” said Greg Gross, special agent in charge for the Naval Criminal Investigative Service.
“Stealing from a program set in place to aid injured and disabled service members diverts compensation from deserving individuals,” said Stacey Moy, special agent in charge of the FBI’s San Diego field office. “Willingly defrauding the American people, especially those who protect our country, will not be tolerated.”
Toups, who retired from the Navy six years ago at the rank of chief petty officer first class, agreed to a plea deal last year with federal prosecutors that dismissed the charges of filing fraudulent claims and wire fraud. In exchange, he pleaded guilty to conspiring to commit wire fraud and was sentenced this week to 30 months in federal prison.
During Toups’ time in the Navy, he was a construction mechanic for the Explosive Ordnance Disposal Expeditionary Support Unit One based in Coronado, Calif., which is located just across the bay from downtown San Diego.
“Lying and stealing funds meant for injured service members is appalling,” U.S. Attorney Tara McGrath said. “The United States Attorney’s Office is committed to protecting those who serve, and this case is an excellent example of law enforcement collaboration to do just that.”
Toups said he filed phony claims with the life insurance program and encouraged other sailors to do the same under the condition that he receive a cut of their payments, which he called a “processing fee.” Also involved in the scheme were Kelene McGrath, his wife at the time, and Navy Dr. Michael Villarroel, Toups told federal prosecutors. Villarroel was the medical doctor at the unit where Toups served and McGrath is a former Navy nurse.
Villarroel, McGrath and several others who were involved in the scheme also have been charged in the scheme.
The Traumatic Servicemembers’ Group Life Insurance program was created by Congress in 2005 to provide help to troops after a traumatic injury and has provided tens of thousands of dollars to service members and their families. As part of Toups’ plea deal, he was ordered to pay restitution to the fund.
