Texas at top of list for convictions for stealing assets from disabled GIs

Texas at top of list for convictions for stealing assets from disabled GIs

By Lisa Olsen and Lindsay Wise

Updated 06:26 a.m., Monday, May 21, 2012

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Hide . Rosa Avila. Courtesy photo

/ SA Rosa Avila. Courtesy photo

Eulalia Avila. Courtesy photo

/ SA Eulalia Avila. Courtesy photo

Charles David Stange Jr.

/ SA Charles David Stange Jr.

The grave of Grady Green, WWII veteran, buried at Houston National Cemetery, Tuesday, May 15, 2012, in Houston. investigative story about veterans all across Texas who were ripped off by the people who were supposed to take care of their money. This veteran had his money stolen by a Houston woman who was supposed to be his caregiver - she got $5,000 to buy him a grave and pay for his care and instead blew it on her own bills, traffic tickets and plumbing repairs. He died before the VA got around to investigating the case or prosecuting the woman who stole from him.

Photo: Karen Warren, Houston Chronicle / © 2012 Houston Chronicle The grave of Grady Green, WWII veteran, buried at Houston Natio...


An interactive map showing the 20 cases involving fiduciaries or family members prosecuted for stealing from disabled vets across Texas.

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Creditors just kept calling a permanently hospitalized San Antonio veteran about the delinquent payments on his 2006 Ford Focus, but Joe Cubillos, so disabled that he rarely left the veterans care center, no longer drove and knew nothing about a car.

An investigation revealed that his sister, Rosa Avila, and her daughter had used $180,000 of his money over five years — draining bank accounts, running up credit card debts and buying a new car, while providing Cubillos with pocket money of no more than “$20 at a time.”

Even after their 2011 convictions, the pair claimed they were innocent. Cubillos was generous and had always given away his money to family, they said.

Such swindles aren't uncommon.

The Veterans Affairs Department's inspector general has repeatedly warned about a plague of fraud and theft in a national program that appoints family members and VA-approved fiduciaries to protect a whopping $3.1 billion in assets belonging to veterans the government considers too disabled to manage their own money.

In the past decade, twice as many Texans have been convicted for stealing from disabled veterans enrolled in the VA fiduciary program as in any other state, records obtained from the inspector general by the Houston Chronicle show.

More than 20 veterans' family members and trusted members of the community — including a former police officer, a federal employee and an optometrist — have been convicted. Others, including two attorneys, face pending charges for stealing assets from disabled veterans who they'd been assigned to protect, according to related records from across the state.

Waco optometrist David Fram stole $126,250 from veterans to help prop up his private business, thefts he meticulously documented in financial records later used against him.

Charles Stange Jr., a former Bexar County sheriff's jailer and ex-military policeman, went to prison for stealing $272,000 he'd supposedly been safeguarding for his disabled veteran father.

And a Houston lawyer, Joe Phillips, and his wife, Dorothy, both in their 70s, allegedly stole $2 million from 28 veterans in a pending case described as the largest rip-off ever reported in the VA fiduciary program. The two allegedly hid their thefts for years by forging bank officers' signatures, inventing fake money market accounts and shifting money between various Texas and out-of-state banks.

Dorothy Phillips has pleaded guilty. Her sentencing is pending.

Many swindles were perpetuated on veterans too ill or disabled to report the crimes, records show. Some crimes went undetected for years before being uncovered through tips, thieves' confessions or the VA's own infrequent checks, interviews with attorneys and court records show.

At least two Texans convicted in veteran scams had previous criminal records but still got approved by the VA as fiduciaries. One Houston veteran's sister got approval despite two previous theft convictions. Then she blew part of her brother's $30,000 in at least 20 casino trips, records show.

In interviews and written statements, VA officials said they have set up a new “hub system” to improve oversight: Texas will now be overseen by a Nebraska office. Officials require background and credit checks for newly appointed money managers, ban ATM withdrawals and review bank statements annually.

Reports of theft remain rare, they say, given that 96,000 fiduciaries assist veterans nationwide; about 6,200 in Texas.

David Autry, spokesman for the nonprofit organization Disabled American Veterans, called on the VA to exercise greater oversight and to punish anyone who financially exploits vulnerable veterans.

“It's an outrageous situation when someone takes advantage of veterans who have served and sacrificed for their county,” he said. “I think that's one of the lowest things you can do.”

Alan Jackson, criminal chief of the Eastern District of Texas, said his office has prosecuted even some small-time family scammers to try to deter others from dipping into cash or benefits rightfully belonging to the disabled. Jackson said the feds have more tools to help recover veterans' money than many rural county DAs, who often lack experience prosecuting corruption or in managing forfeitures.

“My thought is, if we don't prosecute them, that's an invitation to somebody else to think: ‘I can do it,'” he said. “Your typical offender is not a repeat criminal sort of person — it's somebody who sees the opportunity and decides nobody is going to get hurt, and boom.”

His district's most recent case involved Tiawa Braxton, a 31-year-old self-styled hip-hop recording artist from Texarkana who was convicted of stealing $45,000 from the VA after he failed to report his father's 2007 death and continued collecting benefits for two more years in the dead man's name.

Most VA fiduciary scams took at least two years to prosecute, and perpetrators often received probation — conditional upon repaying stolen money. Efforts to recover vets' money have been mixed.

As part of Fram's federal probation, the Waco optometrist last year finished repaying more than $120,000 he took from at least one of 15 vets whose accounts he managed for years as a paid VA fiduciary.

Stange, the former Bexar County jailer and a Gulf War-era veteran, lost his house in a federal forfeiture action that a judge ordered in an attempt to recover the “loans” that Stange took from the assets of his disabled father.

VA officials attempted to remove Stange as a fiduciary after discovering the “loans,” but he refused to turn over control, records show. He died last year after completing a 30-month prison term.

The VA has been forced to repay much of the $2 million allegedly taken from vets by Joe Phillips, the Houston lawyer, who retains his law license two years after his 2010 indictment. Phillips, a former VA employee, declared bankruptcy and successfully argued in related civil lawsuits that the government should repay veterans for their losses because of its lax oversight. His criminal trial is set for next month.

In the case of San Antonian Cubillos, sister Avila's defense attorney Andrea Polunsky said Avila and her daughter agreed last year to repay all the money they'd taken and distributed to various family members, but without admitting guilt.

“She disputed that she did owe the money. She claimed the expenditures were done with his knowledge,” said Polunsky, who said her client's poor record-keeping skills and lack of education, along with a paucity of VA oversight, contributed to the problems, which persisted for five years before the thefts were detected.

The most recent Texas conviction involved a 40-year-old Fort Worth woman who got approved to manage her father's VA benefits in July 2008, stuck him in a nursing home and spent his money on herself. Yolanda Robinson got probation and was ordered to repay $9,305 in January 2012.

Justice came too late to help her disabled father. He died in 2010.

lise.olsen@chron.com



lindsay.wise@chron.com



Express-News Staff Writer Craig Kapitan contributed to this report.

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