Former Veterans Affairs Employee Allegedly Defrauded Agency Of Millions Of Dollars
ARI SHAPIRO, HOST:
The Department of Veterans Affairs has spent more than $25 million to help people with spina bifida, a debilitating spinal cord disease. Now, prosecutors say nearly 20 million of that money went to one fraudulent scheme led by a man who coordinated seven shell companies.
Seamus Hughes was the first person to write about this court case. He shares the byline in The Daily Beast, and he is deputy director of the program on extremism at George Washington University. Welcome to the studio.
SEAMUS HUGHES: Thanks for having me.
SHAPIRO: We often have you on the program to talk about terrorism. That's your main area of research.
HUGHES: That is my main area.
SHAPIRO: This case has nothing to do with terrorism. How did it wind up on your radar?
HUGHES: So we look a lot of court records when it comes to terrorism, and so occasion - we'll find something interesting. And at the program, every once in a while, we'll write about things that have nothing do with terrorism, mostly to clean the palate from having to look at ISIS propaganda all day.
SHAPIRO: So you stumbled across this court filing, decided to write about it and found the story of a man named Joseph Prince. Tell me about him.
HUGHES: So Joseph Prince has been with the VA for about 25 years. Prior to that, he was in the Army. And he ran a call center in Denver. And families of kids with spina bifida would call, and they would request services and reimbursement. And he would direct them towards the right folks. The right folks in this scenario were seven companies that he set up with his wife, his half-sister and a bunch of friends.
SHAPIRO: They were, in fact, the wrong folks.
SHAPIRO: And what happened to the families of children with spina bifida once they were directed to these shell companies?
HUGHES: So what they would do is get paid about $15 to $16 an hour for taking care of their sick children, and then these companies would charge the VA $146. Allegedly, they would pocket the rest of the money, and then they would kick back Joseph Price something north of $1.5 million.
SHAPIRO: Has anyone other than Price been charged in this case?
HUGHES: One other individual - he's going to plead out next week.
SHAPIRO: And yet, with seven shell companies, you would have to think this must not be over.
HUGHES: Yeah. I think you're talking about a massive investigation. In fact, they've filed 40 seizure notices to seven different companies and a bunch of different bank accounts. I think it's still ongoing.
SHAPIRO: Did this affect the people who are struggling with this debilitating spinal cord disease?
HUGHES: You know, they thought that when they called Joseph Price, they would get someone who would help them. And in many ways, he directed them - he said, you know, here's a form. Here's the company you should use. It made it easy for them, but in actuality, he's - you know, it's basically a scheme. He used these individuals and tricked them and made something that should've been an easy thing in their life a lot harder.
SHAPIRO: He allegedly did that, according to prosecutors.
HUGHES: Allegedly - absolutely.
SHAPIRO: You've reached out to his lawyers. Have they responded?
HUGHES: No response from his lawyers.
SHAPIRO: There's a ton of evidence here. Tell us about the paper trail.
HUGHES: The FBI is actually quite fortunate in this scenario because when you call a VA for these type of services, all the calls are recorded. And so there's 16,000 hours of phone records they're going through, 4,000 pages of transcripts and a paper trail and email trail of it.
SHAPIRO: And when you read these transcripts, what do you find?
HUGHES: You find that Mr. Prince allegedly is directing these individuals, pre-filling out the forms for them and saying, go to these seven companies that I have relationship with that I haven't told you about.
SHAPIRO: Have you talked to any of the parents of kids with this disease?
HUGHES: We have, and although we had some notices in the court records about - we had one parent that reached out to their congressman and said, you know, I got an explanation of my benefits. And it said that this company is taking 80%, and I'm only getting 20%. This is highway robbery. And that was - in many ways, helped trigger the investigation.
SHAPIRO: What state was that parent in?
HUGHES: Michigan. It's about 50 families that Joseph Prince reached out to and helped along the way.
SHAPIRO: Almost $20 million - that's a lot of money. How did Joseph Prince spend this?
HUGHES: So if you look at the seizure notice that's been filed in court records, you know, you had some folks of part of this scheme spending $120,000 on furniture, another $30,000 in plastic surgery, paying off student loans, buying houses, beachfront property.
SHAPIRO: Tell me about where the VA sits in all of this because the Veterans Affairs Department has had a lot of scandals, and this is yet another.
HUGHES: It is yet another. Now, we should note that this was investigated with the VA inspector general's office. The concern here is that this scheme went on for at least a year, and so the tripwires didn't happen until $18 million had already left the stables. And so you would hope that they set up some sort of system so that they don't have to wait 365 days till they figure out what's happening.
SHAPIRO: The question is, if somebody like Joseph Prince was allegedly able to do this, is somebody else doing it with a different fund for a different disease?
HUGHES: Exactly. I mean, it raises questions about oversight. It raises questions about whether there is enough checks and balances in the system.
SHAPIRO: So when does this go to trial, if, in fact, it does go to trial?
HUGHES: So Mr. Prince is set for trial in November.
SHAPIRO: All right. That is Seamus Hughes of George Washington University.
Thanks for coming to the studio.
HUGHES: Thank you.
SHAPIRO: And NPR reached out to the VA, which calls the alleged behavior despicable and the reason why it fired this individual. Transcript provided by NPR, Copyright NPR.