Navy Federal Tip Leads To Bust In VA Scam

- MERRIFIELD, Va. (08/30/01) Navy FCU helped tip offthe government to a scam to defraud the U.S. Department of VeteransAffairs of nearly $6 million. Three current and former employees ofthe agency-Sarah Prater of Atlanta, Ernest Thornton of Hiram, Ga.,and Kathy F. Eselhorst of Lilbum, Ga.-were accused of the schemeafter Navy Federal notified the agency of VA benefit paymentstotaling more than $200,000 deposited into Thornton's credit unionaccount. That lead investigators to do some digging, whichuncovered some 20 active claim files in Thornton's name. The VAsaid the three, who were freed on $50,000 bond, have cooperatedwith authorities and told investigators much of the money was spenton such things as travel, cars, homes and even a helicopter, anUltralight airplane, a hovercraft and a three-person submarine.Prater allegedly used her security clearance as a supervisor andCongressional liaison at the agency's Atlanta regional office toalter records of dead veterans with no beneficiaries in order tobilk the VA of millions of dollars. Thorton, a Navy vet and formerVA clerk, and Eselhorst opened a number of post office boxes toreceive the payments. Navy FCU Spokesperson Loren Moeller confirmedthe credit union tipped off the government earlier this month, butdeclined to share details of how it initially came to light becausethe case is still pending-and also to ensure the credit uniondoesn't tip off would-be crooks about what pitfalls toavoid.