The Justice Department received a guilty plea on Sept. 16 in a Post-9/11 GI Bill fraud case that cost the Veterans Affairs more than $100 million.
Michael Bostock, of Nampa, Idaho, and Eric Bostock, of Riverside, California, worked for California Technical Academy, a VA-approved, for-profit school the defendants founded to offer technical training at three locations across California, according to court documents.
Between January 2012 and June 2022, the pair, along with other unnamed co-conspirators, reportedly falsified enrollment and course completion numbers to the VA in order to swindle the agency out of $104,682,860, the largest known case of fraud ever associated with the widely used educational benefit.
As part of the scheme, the group provided the VA with fake contact information, so that when regulators called to learn more, the conspirators could impersonate the fictitious students. The Bostocks also reportedly abused what is known as the “85-15 rule,” a regulation that requires that no more than 85% of students in a course at a VA-approved school be funded by the agency.
For the 1,793 students enrolled at CTA, the Bostocks received more than $32 million in tuition payments and over $72 million for housing and other benefits, the DOJ report said.
“The Post-9/11 GI Bill was enacted to aid our military veterans and their families on behalf of a nation grateful for their service,” Kenneth Polite Jr., assistant attorney general for the DOJ’s criminal division, said in a release. “These frauds drain funds from a vital veterans’ program and undermine public faith in the administration of government.”
Each defendant faces a maximum penalty of five years in prison.
In addition to the aforementioned case, the DOJ received guilty pleas for two separate instances of fraud.
Robert and Judith Lanoue, who owned a VA-approved scuba academy in Georgia called Scooba Shack, pleaded guilty to defrauding the agency of more than $3.2 million. According to court documents, the pair, along with David Anderegg and Kenneth Meers, did not comply with the 85-15 rule and created a fake scholarship fund for their non-VA funded students.
On Sept. 15, Judith Lanoue was sentenced to six months in prison, according to the DOJ. Her husband is scheduled to be sentenced on Oct. 18.
Meers, who assisted the Lanoues in the scheme, also played a role in helping Theresa Whitlock, the owner of another scuba academy in Georgia called Diver’s Den, to defraud the VA. Together, Meers and Whitlock obtained more than $1.1 million by lying to the agency.
Robert Lanoue, Anderegg and Whitlock each face a maximum of five years in prison, while Meers faces a maximum penalty of 20 years behind bars.
“Safeguarding Post-9/11 GI Bill education benefit funds reserved for deserving veterans remains a priority,” said Michael J. Missal, the VA’s inspector general. “These guilty pleas are a testament of our commitment to working with our law enforcement partners to hold accountable those who would defraud VA’s benefits programs.”
A store representative from Diver’s Den, who spoke to Military Times on the condition of anonymity, called the ordeal “a really rotten situation.”
“To say careers and lives have been ruined by this would be an understatement.”
The individual said Diver’s Den employees were misled when they signed a contract with Meers, who taught a separate group of their students and quickly began pocketing money from the store. He added that the shop is working hard to right those wrongs, but the academy’s future remains uncertain at this time.
Scooba Shack could not be reached for comment.
Jonathan is a staff writer and editor of the Early Bird Brief newsletter for Military Times. Follow him on Twitter @lehrfeld_media