Former Marine F-18 Pilot Pleads Guilty to Conspiring to Defraud the Department of Veterans Affairs

Received Nearly $150,000 in Fraudulent Disability Benefits

February 19, 2010 - LOUISVILLE, KY—After two days of trial, Dean Anthony Toth, age 38, of Oldham County, Kentucky, pled guilty to conspiring to defraud the Department of Veterans Affairs by filing a fraudulent claim for military disability benefits, and for structuring bank transactions, United States Attorney Candace G. Hill of the Western District of Kentucky announced today.

Toth served on active duty in the Marine Corps from 1995 to 2004, and was an F-18 pilot who was named the 2003 Marine Instructor of the Year. Toth admitted that between July 2007 and November 2008, he conspired with Daniel Ryan Parker, a former employee of the Disabled American Veterans, to file a fraudulent claim for military disability benefits, claiming that he was deaf in both ears. Parker worked with Jeffrey McGill, a former Department of Veterans Affairs employee, to falsify Toth’s file.

Toth’s military medical records showed yearly audiometry exams, all of which reflected that Toth’s hearing was within normal limits. Toth is now a pilot with Southwest Airlines. In mandatory yearly physicals conducted by the Department of Transportation in March 2006, March 2007, and March 2008, Toth reported no hearing loss or problems, and passed a conversational voice test conducted at six feet. Nonetheless, Toth pursued a military disability claim for hearing loss, and Toth admitted that he knew that Parker would falsify his medical records to support his claim. In return Toth agreed to pay Parker two-thirds of any retroactive payment he received. On August 10, 2007, Toth took a hearing exam and the results indicated that his hearing was "within normal limits." Parker and McGill, however, altered Toth's exam results to reflect that Toth had profound hearing loss, and McGill personally reviewed Toth's claim.

As a result, Toth's claim was approved for 100 percent disability based on hearing loss with special monthly compensation for deafness in both ears. On October 31, 2007, the VA paid Toth $93,240 in retroactive disability payments, and Toth also began receiving over $2,500 per month in disability payments. These monthly payments were tax free and would have continued for life. Toth deposited the $93,240 in his bank account, and in November 2007, Toth withdrew $30,000 in cash from his bank, in three separate $10,000 withdrawals. Toth admitted that he structured these withdrawals to avoid bank reporting requirements for transactions over $10,000. Toth later gave Parker an additional $32,160 in the form of a cashier’s check. The total payment to Parker of $62,160 represented exactly two-thirds of the retroactive payment. Parker subsequently shared that kickback with McGill.

The maximum potential penalties for Toth are 10 years’ imprisonment, a $500,000 fine, and supervised release for up to three years.

The case was prosecuted by Assistant United States Attorney David Weiser, and it was investigated by the Department of Veterans Affairs Office of the Inspector General, and the Federal Bureau of Investigation.

The plea was entered before Jennifer B. Coffman, Judge, United States District Court, Louisville, Kentucky. Toth is scheduled to be sentenced before Judge Coffman on May 17, 2010, at 1:00 p.m., in Louisville, Kentucky. Parker and McGill pled guilty previously, along with all 11 other co-defendants, and are scheduled to be sentenced on April 19, 2010, at 2:00 p.m.