Navy doctor convicted and sentenced for massive $2 million fraud scheme

A Navy doctor recently received a sentence in federal courtPhoto byMarilyn Nieves

The U.S. Attorney's Office for the Southern District of California recently reported that a Navy doctor has been convicted in federal court for running an insurance fraud scam worth $2 million.

According to a statement from the attorney's office, Cmdr. Michael Villarroel was sentenced to one year and one day in custody on Friday. Additionally, he was ordered to repay the $180,000 in bribes he received as criminal forfeiture.

Using inflated or false claims made to a life insurance scheme that pays military personnel for severe and crippling illnesses sustained while serving, he and his accomplices stole almost $2 million in payments between 2012 and at least December 2015.

Last March, the military doctor entered a guilty plea.

According to U.S. Attorney Tara McGrath, "this one was egregious" when it came to fraudulent schemes. A severe price must be paid for taking funds meant for wounded and traumatized service members, as the defendant learned today.

The federal government claims that Villarroel admitted to reviewing the documents and finding the injuries to be credible, even though he knew they were false. He also admitted to supplying additional military members' medical information to be used in making up claims.

According to a service record that was provided to Military Times on Wednesday, Villarroel is still an active-duty Navy member and has been assigned to an Explosive Ordnance Disposal Expeditionary Support Unit at Coronado, California since 2018.

Along with Villarroel, Christopher Toups—a former chief petty officer in the Navy who served with an EOD unit in California—and other co-defendants have also been sentenced for their acts.

In October, federal officials revealed that Toups had been sentenced to 30 months in jail for his role in the insurance fraud operation.

As previously reported by the attorney's office, Toups paid Villarroel in cash and via cashier's check. Additionally, in order to avoid reporting currency transactions, Villarroel also transacted in sums below $10,000.

At this time, Villarroel's restitution hearing is set for April 2. When Military Times reached out to his legal team for comment, they did not react right away.

Edited by Newsbreak Contributor Denys Shybinskiy