Idaho man pleads guilty in largest ever VA disability benefits fraud case

SPOKANE, Wash. - A man has pleaded guilty in a $1.5 million disability fraud case; reportedly the biggest in Veterans Affairs Department history.

Cases in Idaho and Washington state were resolved Monday in an agreement with 59-year-old James M. Sebero of Laclede, Idaho. He pleaded guilty in Spokane to wire fraud and making a false statement and agreed to forfeit personal assets and to pay $950,000 in restitution.

Sebero could face 20 years and a $250,000 fine when he is sentenced July 10.

He served in the Air Force from 1969 to 1975, when he told military personnel he was injured while unloading a snowmobile. He later claimed he had lost the use of his legs.

Almost immediately after receiving his medical retirement from the Air Force and VA disability compensation benefits, Sebero established and operated a business known as Custom Excavation.

According to Washington state records Sebero operated that business between 1980 and 1992. From 1992 to present, Sebero owned and operated an aircraft maintenance facility called Custom Aviation and obtained a pilot's license without any restrictions based on any disability.

FAA records indicate that on each application for various airman's certificates, Sebero denied any sort of medical problems or disability. He was also a commissioned law enforcement officer with Bonner County, Idaho. Sebero was required to meet certain medical and physical requirements in connection with his position.

Bonner County records indicate he was able to pass all those requirements, showed no evidence of disability and was assigned several tasks during his employment which could not have been accomplished by a person who was paraplegic.

On September 26, 2007, Sebero entered the VA hospital in a wheel chair and was examined by a VA physician. During the course of the examination, the physician asked him if he continued to suffer from paraplegia. Sebero confirmed that he was paraplegic and that he had been unable to walk since his discharge from the Air Force.

On the following day, Sebero appeared before Magistrate Judge Cynthia Imbrogno to answer to charges concerning an unrelated false statement. Agents saw Sebero and others as he walked into the Thomas S. Foley Courthouse in Spokane, stood without assistance as he made his appearance before the Judge, walked the stairs to the U.S. Marshal's office for booking after his court appearance and then walked as he departed the Courthouse following his appearance.

U.S. Attorney James A. McDevitt calls it the largest disability compensation fraud case in VA history.

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