A U.S. Navy doctor pleaded guilty in federal court to his role in making fake or exaggerating injuries to obtain insurance payments intended to help service members recover from traumatic injuries.

Michael Villarroel, 48, acknowledged he knew the claimed injuries were false or exaggerated but signed off on applications for a share of the insurance payments. According to the U.S. Attorney’s office, participants in the scheme obtained about $2 million in payments from the Traumatic Servicemembers Groups Life Insurance (TSGLI) program which is funded by service members and the Navy. 

Prosecutors say Villarroel personally obtained more than $180,000 in kickbacks. Villarroel is the tenth defendant to plead guilty to crimes committed under the scheme. 

The fraudulent activity took place from 2012 to at least December 2015 when he conspired to commit wire fraud with Christopher Toups, a chief petty officer construction mechanic in the Navy; Kelene Meyer, Toups’ spouse, and a nurse; and others. 

According to the U.S. Attorney’s Office, Toups got other service members to submit claims and told them to provide the records to Meyer,  requested part of the insurance payment in return, and distributed shares to Meyer and Villarroel.

Villarroel claimed to have reviewed medical records and verified disabilities consistent with the injuries as needed for claims to be processed and qualified. 

“Dr. Villarroel defrauded the Navy and the U.S. taxpayer by participating in a reprehensible scheme to wrongly obtain more than $2 million that should have been directed to wounded service members,” said Acting Special Agent in Charge Michael D. Butler II of the NCIS Economic Crimes Field Office. “NCIS and our partners remain committed to investigating all allegations of fraud that harms Department of the Navy service members and their families.”

The U.S. Attorney's Office also said several defendants were stationed locally as part of the Explosive Ordnance Disposal Expeditionary Support Unit One in Coronado.

Villarroel is scheduled to be sentenced on June 16 at 9 a.m. by U.S. District Judge Janis L. Sammartino.

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