A federal probe into a $2 million conspiracy to scam the Traumatic Servicemembers Group Life Insurance Program between 2012 and 2015 focused on commissioned officers and chief petty officers attached to the San Diego-based Explosive Ordnance Disposal Expeditionary Support Unit 1. US Navy photo.
A corrupt chief petty officer who helped fellow Navy leaders steal $2 million earmarked for disabled military personnel is now a convicted felon.
Before he departed the sea service, Construction Mechanic Chief Petty Officer Christopher Toups personally pocketed roughly $400,000 for his role in recruiting sailors to file bogus claims under the Traumatic Servicemembers Group Life Insurance Program, according to a plea deal finalized Thursday, Oct. 27, in San Diego.
“The Traumatic Servicemembers Group Life Insurance Program is designed to compensate service members who suffer serious and debilitating injuries while on active duty. Falsely claiming benefits from this program siphons money from deserving beneficiaries and makes medical care more costly for all of us,” Stacey Moy, Special Agent in Charge of the FBI San Diego Division, said in a prepared statement released in the wake of Toups’ plea. “This scheme is particularly egregious given the service members involved deceitfully served themselves for their own financial gain.
Neither Toups, 45, nor his San Diego-based attorney returned Coffee or Die Magazine’s messages seeking comment.
Sailors assigned to Explosive Ordnance Disposal Expeditionary Support Unit 1 conduct high-speed maneuvers with an 8-meter rigid-hull inflatable boat in San Diego Bay on Sept. 19, 2013. EODESU-1 provides logistic support to West Coast and forward deployed EOD units. US Navy photo by Mass Communication Specialist 2nd Class Joshua Scott.
Now living in Georgia, Toups is slated to be sentenced Feb. 3, 2023, on a single count of conspiring to commit wire fraud. He faces up to 20 years behind bars and a $250,000 fine.
“The theft of military healthcare dollars directly harms service members and taxpayers,” said US Attorney Randy Grossman in a prepared statement. “This fraud was costly for the US Navy, and now for this defendant.”
Grossman places Toups at the center of the scam to bilk the disability program between 2012 and late 2015, alongside the chief’s ex-wife Kelene Meyer — a former Navy nurse also known as Kelene McGrath and Jacqueline Toups — and an ex-Navy physician, Michael Villarroel.
Prosecutors contend the bulk of the fraud played out in the wardroom and Goat Locker of San Diego’s Explosive Ordnance Disposal Expeditionary Support Unit 1, where Toups served as a chief petty officer.
Then-Cmdr. Villarroel was the medical officer for EDOESU-1. Fellow defendants include six other commissioned officers and chiefs, including ex-Lt. Cmdr. Paul Craig and Explosive Ordnance Disposal Chief Richard Cote.
Sailors assigned to Explosive Ordnance Disposal Expeditionary Support Unit 1 conduct high-speed maneuvers with an 8-meter rigid-hull inflatable boat in San Diego Bay on Sept. 19, 2013. EODESU-1 provides logistic support to West Coast and forward deployed EOD units. US Navy photo by Mass Communication Specialist 2nd Class Joshua Scott.
Craig pleaded guilty in 2020 to wire fraud and was sentenced to three years of probation. Both Cote and Meyer pleaded guilty to conspiring to commit wire fraud in 2019. They await sentencing.
But Villaroel is fighting the 15 fraud and false-claims charges filed against him, and his jury trial is scheduled to start April 17.
Prosecutors are expected to outline an alleged scamming scheme that began with Toups recruiting sailors to file bogus or embellished injury claims worth up to $100,000 in immediate insurance payments.
Villarroel and Meyers would then allegedly alter medical records to make the claims appear legit before rubber-stamping the paperwork.
When the sailors got their insurance payouts, they'd slide a slice of the proceeds to Toups and the two medical providers, prosecutors said.
Carl Prine is a former senior editor at Coffee or Die Magazine. He has worked at Navy Times, The San Diego Union-Tribune, and Pittsburgh Tribune-Review. He served in the Marine Corps and the Pennsylvania Army National Guard. His awards include the Joseph Galloway Award for Distinguished Reporting on the military, a first prize from Investigative Reporters & Editors, and the Combat Infantryman Badge.
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