2 Navy service members sentenced in insurance fraud scheme

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SAN DIEGO (CNS) – Two U.S. Navy service members were sentenced in San Diego federal court Friday for their roles in an insurance fraud scheme that involved making false medical claims to a military insurance program in exchange for unearned benefits

Ronald Olmsted, 48, of Mobile, Alabama, and Anthony Coco, 43, of San Diego, are among 11 defendants indicted for allegedly filing false claims to the Traumatic Servicemembers Group Life Insurance Program. Prosecutors say the scheme defrauded the program of nearly $2 million total.

Olmsted was sentenced to four months in prison, followed by four months of home detention, which will be served as part of three years of supervised release. Coco received four months of home detention to be served as part of three years of probation.

The U.S. Attorney’s Office said the scheme was led by co-defendant Christopher Toups, 43, of Woodstock, Georgia, a former Chief Petty Officer construction mechanic who allegedly recruited Olmsted, Coco and other service members to create and file fraudulent claims to the Traumatic Servicemembers Group Life Insurance Program — or TSGLI — which compensates service members who suffer serious, debilitating injuries while on active duty.

Prosecutors say Toups ran the scheme with assistance from U.S. Navy Commander Dr. Michael Villarroel, the medical doctor for the unit where Toups worked, and Kelene Meyer, a former Navy nurse who Toups was married to during the time of the offenses.

Olmsted claimed that he was injured in a 2011 rappelling accident and fell down a flight of stairs in 2012, which left him unable to care for himself or do basic tasks. He received $175,000 from the TSGLI, and prosecutors say he sent $55,000 to Toups.

Coco alleged he reported on medical forms that he broke both ankles in a fall that left him confined to a wheelchair. He was paid $100,000 and sent $65,000 to Toups, according to the U.S. Attorney’s Office.

Seven defendants, including Olmsted and Coco, have pleaded guilty in the case.

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