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Former EOD Chief Petty Officer Pleads Guilty to Insurance Fraud Scheme

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A former Navy chief petty officer pleaded guilty to his role in an insurance fraud scheme, the U.S. attorney’s office for the southern district of California announced Thursday.

Christopher Toups, 43, a former chief petty officer construction mechanic assigned to the explosive ordnance disposal expeditionary support unit in San Diego, Calif., pleaded guilty Thursday to conspiracy to commit wire fraud, according to a news release from the U.S. attorney’s office.

When Toups was indicted in January 2019, he was charged with conspiracy to commit wire fraud, wire fraud and making a false and fraudulent claim, according to the indictment.

By pleading guilty to conspiracy to commit wire fraud, as part of a plea deal, Toups admitted that between 2012 and 2015, he worked with Kelene McGrath, Dr. Michael Villarroel and others to report fake or exaggerated injuries or disabilities in order to get life insurance payments, defrauding Traumatic Servicemembers Group Life Insurance – a program administered by Prudential for the Navy for injured sailors – out of nearly $2 million, according to the news release.

On Jan. 17, 2012, Toups filed a claim with Traumatic Servicemembers Group Life Insurance saying he suffered a catastrophic injury after falling during a training exercise, according to the indictment. Toups also worked on other claims for sailors and encouraged current and former sailors to file fake claims, according to the news release.

McGrath, who was Toups’ wife at the time, would falsify or doctor the medical records, while Villarroel, a Navy doctor, would sign off on the records, according to the release.
Toups, McGrath and Villarroel received some of the insurance payout from the sailors in exchange for their help. McGrath and Villarroel also face charges for their involvement.

Toups will be sentenced on Feb. 3. He faces a maximum sentence of 20 years in prison and a fine of $250,000. A judge can also order forfeiture and restitution.

Two others involved in the insurance fraud scheme – Ronald Olmstead and Anthony Coco – have already pleaded guilty and been sentenced. Olmstead received four months in prison, with four months of home detention following his release. He’ll also serve three years of supervised release.

Coco received four months of home detention, which he’ll serve as part of his three-year probation.