White-Collar Crime

Lawyer, 71, Awaits Trial in Record Alleged $2M Theft as Guardian for Disabled Veterans

Some disabled veterans reportedly have been shorted on living expenses, as a result of a claimed record-breaking guardianship theft by a Texas lawyer.

Responsible for overseeing funds of some veterans for decades, attorney Joe Phillips, 71, allegedly evaded detection for years with the help of doctored records even though his files were supposed to be regularly reviewed and audited, reports the Associated Press. His wife and legal assistant is also accused in the case.

An audit by the Houston office of the U.S. Department of Veterans Affairs identified “incomplete, misleading or inaccurate” records in late 2007.

And a 2008 review determined that there was a $2 million shortfall from 2003 to 2008. However, it wasn’t until June of this year that a 26-count federal indictment of the couple resulted. They are charged with conspiracy, tax fraud, misappropriation and related crimes.

Civil suits also are pending, but Phillips, a former VA employee in Houston, is arguing that the government should be held liable because it was required to approve expense payments and audit his books. He has denied that he was involved in any theft or fraud and has filed for bankruptcy to try to protect his assets, the news agency reports.

The full extent of the problem may never be known because records for prior years may not be available, the AP says, relying on information from lawyers.

Although Phillips is innocent unless and until he is proven guilty at a trial now scheduled for April, the mother of one of his claimed victims has already determined what she believes to be an appropriate punishment. And it’s not a federal prison sentence:

“I would like for him to be sentenced to wear a sign saying ‘I stole from disabled American veterans,’ and stand out in front of the VA hospital,” Shirley German tells the AP.

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