Ethics Corner

This series on ethics presents cautionary examples drawn from the DoD Standards of Conduct Office Encyclopedia of Ethical Failures.

If you have questions about ethics or are unsure about a certain course of conduct, contact the NASCC Staff Judge Advocate’s office by calling 361-961-3535.

Today’s story is about splitting the difference:

A Navy civilian Medicare claims examiner was employed to represent government interests in the settlement of Medical Care Recovery Act (MCRA) claims.

Her job entailed regularly negotiating with insurance companies and injured military personnel in order to recover government expenditures on medical care for military service members and their dependents who were injured due to the acts of uninsured third parties.

Although the U.S. Navy has authority to waive its claims on behalf of injured service members against insurance companies, the examiner orchestrated a Ethics Corner scheme in which she used her position and authority to waive claims and to fraudulently obtain money for herself that was owed to the government.

In one case, the examiner handled the claim for a petty officer who had been injured in a motorcycle accident.

She told the service member that she could increase the amount of his settlement if he agreed to split the amount with her.

When he agreed, the examiner notified the insurance company that the Navy was waiving its MRCA claim.

When the company sent the petty officer a $6,000 check, he sent the claims examiner $3,000 cash just as she had directed.

It turned out that the petty officer had been working with law enforcement authorities all along.

The U.S. Attorney prosecuted the examiner and obtained a conviction for one count of mail fraud.

The claims examiner was sentenced to two months in prison, two years of probation, a $100 special assessment, and was debarred by the Navy.