Pennsylvania Man Pleads Guilty to Defrauding Disabled Veteran of $316,000

From the U.S. Attorney’s Office, Middle District of Pennsylvania:

HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Jason Ehrhart, age 48, of Thompsontown, Pennsylvania, pleaded guilty today before Chief United States District Court Judge Christopher C. Conner for defrauding a disabled Veteran, the Veteran’s Administration, and the Social Security Administration out of $316,360.

According to United States Attorney David J. Freed, Jason Ehrhart was charged by way of a criminal information on October 29, 2018, with one count of health care fraud. Jason’s former wife, Laurie Ehrhart, age 48, of Newport, Pennsylvania, was indicted on October 24, 2018, with one count of health care fraud and one count of conspiracy to commit health care fraud. The charges against the couple relate to their misappropriation of a veteran’s disability benefits.

In 1985 while serving in the U.S. Army, a veteran who was a former resident of Perry County, Pennsylvania, was diagnosed with multiple sclerosis.  In 1998 the veteran began receiving disability benefits from the Department of Veterans Affairs (VA) and in 2006 began receiving disability benefits from the Social Security Administration (SSA). The veteran was eventually hospitalized on a permanent basis at the VA hospital in Lebanon, Pennsylvania in November of 2004. 

In August of 2006, the veteran was deemed by the VA to be incompetent to handle his own financial affairs.  As a result, on October 2, 2006, Jason Ehrhart applied to serve as the veteran’s VA Fiduciary and Legal Custodian.  Under the terms of a Fiduciary Agreement, Jason Ehrhart agreed to use all of the veteran’s VA disability benefits exclusively for the veteran’s benefit. The agreement warned him that the funds were not for his personal use. The Fiduciary Agreement also required Jason Ehrhart to submit an annual accounting to the VA with respect to the amount of money spent on the veteran’s behalf.

While Jason Ehrhart served as the veteran’s VA Fiduciary and Legal Custodian, all of the veteran’s VA benefits, plus most of his Social Security disability checks, were deposited into a checking account Jason opened at The Orrstown Bank.  Altogether, $476,260 in federal benefits ($422,828 in VA disability, $48,187 in Social Security disability, and $5,244 in VA clothing allowance) were deposited into the account between January 2009 and August 2016.

According to Jason Ehrhart’s criminal information and Laurie Ehrhart’s indictment, at least $316,360 of the $476,260 was misappropriated by Jason and Laurie Ehrhart and converted to their own use between October 2006 and August 2016.  Checks totaling $218,832 ($96,202 payable to Jason Ehrhart and $122,630 payable to Laurie Ehrhart), were drawn against the account.  Of the $218,832, $157,742 was deposited into Jason and Laurie Ehrhart’s joint checking account at the Juniata Valley Bank (JVB) and at least $23,496 was converted to cash.  Thereafter, the funds in the joint JVB account were employed by Jason and Laurie Ehrhart to pay their personal expenses. 

Another $7,174 in checks were made payable to Jason and Laurie Ehrhart’s two minor children.  According to the charges Jason Ehrhart instructed the children to take the checks to the bank, cash them, and to surrender the cash to him.

Another $19,890 in checks were made payable to another couple who were Jason and Laurie Ehrhart’s best friends.  According to the charges Jason Ehrhart regularly treated the couple and their children to dinners out and at least two, all-expense paid vacations to Disney World in Florida, purchased two automobiles for the family, and paid for the wife’s dental work.

To conceal his embezzlements, Jason Ehrhart submitted eight false annual accountings to the VA in which he falsely claimed he spent $402,408 on the veteran’s behalf between October 2006 and October 2015.  The itemized expenditures in the accountings were grossly inflated. For example, Jason Ehrhart claimed he paid the mortgage on the veteran’s residence ($1,631 per month) plus the veteran’s share of the mortgage on his mother’s residence ($881) after she died in May 2011.  However, the lenders against both properties obtained judgments and they were eventually foreclosed and sold.

Jason Ehrhart also falsely claimed in the annual accountings that he spent thousands on miscellaneous expenditures for the veteran, including storage unit rentals, vehicle maintenance bills, state and local taxes, life and auto insurance, and credit card bills.  However, in 2016 the veteran’s specially equipped wheelchair van, for which Jason Ehrhart claimed he spent approximately $32,395 for vehicle maintenance, was found broken down and abandoned along a Perry County roadside.

The veteran died at the Lebanon VA Hospital on July 30, 2018. 

Jason Ehrhart agreed to make full restitution of the monies owed to the veteran’s estate. No date was set by Chief Judge Conner for Jason Ehrhart’s sentencing pending preparation of a presentence report.  Laurie Ehrhart is currently scheduled for trial on January 8, 2019.  

The Department of Veteran Affairs, the Office of Inspector General, the Pennsylvania State Police, and the Social Security Administration’s Office of Inspector General investigated the case.  Assistant United States Attorney Kim Douglas Daniel is prosecuting the case.

A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.

The maximum penalty under federal law for this offense is 10 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.

HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Jason Ehrhart, age 48, of Thompsontown, Pennsylvania, pleaded guilty today before Chief United States District Court Judge Christopher C. Conner for defrauding a disabled Veteran, the Veteran’s Administration, and the Social Security Administration out of $316,360.

According to United States Attorney David J. Freed, Jason Ehrhart was charged by way of a criminal information on October 29, 2018, with one count of health care fraud. Jason’s former wife, Laurie Ehrhart, age 48, of Newport, Pennsylvania, was indicted on October 24, 2018, with one count of health care fraud and one count of conspiracy to commit health care fraud. The charges against the couple relate to their misappropriation of a veteran’s disability benefits.

In 1985 while serving in the U.S. Army, a veteran who was a former resident of Perry County, Pennsylvania, was diagnosed with multiple sclerosis.  In 1998 the veteran began receiving disability benefits from the Department of Veterans Affairs (VA) and in 2006 began receiving disability benefits from the Social Security Administration (SSA). The veteran was eventually hospitalized on a permanent basis at the VA hospital in Lebanon, Pennsylvania in November of 2004. 

In August of 2006, the veteran was deemed by the VA to be incompetent to handle his own financial affairs.  As a result, on October 2, 2006, Jason Ehrhart applied to serve as the veteran’s VA Fiduciary and Legal Custodian.  Under the terms of a Fiduciary Agreement, Jason Ehrhart agreed to use all of the veteran’s VA disability benefits exclusively for the veteran’s benefit. The agreement warned him that the funds were not for his personal use. The Fiduciary Agreement also required Jason Ehrhart to submit an annual accounting to the VA with respect to the amount of money spent on the veteran’s behalf.

While Jason Ehrhart served as the veteran’s VA Fiduciary and Legal Custodian, all of the veteran’s VA benefits, plus most of his Social Security disability checks, were deposited into a checking account Jason opened at The Orrstown Bank.  Altogether, $476,260 in federal benefits ($422,828 in VA disability, $48,187 in Social Security disability, and $5,244 in VA clothing allowance) were deposited into the account between January 2009 and August 2016.

According to Jason Ehrhart’s criminal information and Laurie Ehrhart’s indictment, at least $316,360 of the $476,260 was misappropriated by Jason and Laurie Ehrhart and converted to their own use between October 2006 and August 2016.  Checks totaling $218,832 ($96,202 payable to Jason Ehrhart and $122,630 payable to Laurie Ehrhart), were drawn against the account.  Of the $218,832, $157,742 was deposited into Jason and Laurie Ehrhart’s joint checking account at the Juniata Valley Bank (JVB) and at least $23,496 was converted to cash.  Thereafter, the funds in the joint JVB account were employed by Jason and Laurie Ehrhart to pay their personal expenses. 

Another $7,174 in checks were made payable to Jason and Laurie Ehrhart’s two minor children.  According to the charges Jason Ehrhart instructed the children to take the checks to the bank, cash them, and to surrender the cash to him.

Another $19,890 in checks were made payable to another couple who were Jason and Laurie Ehrhart’s best friends.  According to the charges Jason Ehrhart regularly treated the couple and their children to dinners out and at least two, all-expense paid vacations to Disney World in Florida, purchased two automobiles for the family, and paid for the wife’s dental work.

To conceal his embezzlements, Jason Ehrhart submitted eight false annual accountings to the VA in which he falsely claimed he spent $402,408 on the veteran’s behalf between October 2006 and October 2015.  The itemized expenditures in the accountings were grossly inflated. For example, Jason Ehrhart claimed he paid the mortgage on the veteran’s residence ($1,631 per month) plus the veteran’s share of the mortgage on his mother’s residence ($881) after she died in May 2011.  However, the lenders against both properties obtained judgments and they were eventually foreclosed and sold.

Jason Ehrhart also falsely claimed in the annual accountings that he spent thousands on miscellaneous expenditures for the veteran, including storage unit rentals, vehicle maintenance bills, state and local taxes, life and auto insurance, and credit card bills.  However, in 2016 the veteran’s specially equipped wheelchair van, for which Jason Ehrhart claimed he spent approximately $32,395 for vehicle maintenance, was found broken down and abandoned along a Perry County roadside.

The veteran died at the Lebanon VA Hospital on July 30, 2018. 

Jason Ehrhart agreed to make full restitution of the monies owed to the veteran’s estate. No date was set by Chief Judge Conner for Jason Ehrhart’s sentencing pending preparation of a presentence report.  Laurie Ehrhart is currently scheduled for trial on January 8, 2019.  

The Department of Veteran Affairs, the Office of Inspector General, the Pennsylvania State Police, and the Social Security Administration’s Office of Inspector General investigated the case.  Assistant United States Attorney Kim Douglas Daniel is prosecuting the case.

A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.

The maximum penalty under federal law for this offense is 10 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.