Blumenthal, Moran, Brown Introduce Bipartisan Bill to Increase Protections for Veterans Who Fall Victim to Fiduciary Fraud

(Washington, DC) – Today, U.S. Senators Richard Blumenthal (D-Conn.), Jerry Moran (R-Kan.), and Sherrod Brown (D-Ohio), Ranking Member and members of the Senate Committee on Veterans’ Affairs (SVAC), respectively, introduced bipartisan legislation that would enhance the Veterans Benefits Administration’s (VBA) Fiduciary Program oversight capabilities, in order to protect vulnerable veterans who have an appointed fiduciary to manage their finances and benefits. Fiduciaries are responsible for overseeing veterans’ finances, when it has been determined that a veteran cannot continue to manage his or her affairs, most commonly due to mental incompetence.

Recent reports have identified rampant misuse of benefits by fiduciaries; in the first quarter of 2015 alone, $3.3 million in Department of Veterans Affairs (VA) benefits were misused. Currently, VA cannot legally recover all benefits to beneficiaries who are victims of fraud – in 2014, approximately $6.3 million in VA benefits were misused but only $3 million were reissued. The FRAUD Act (Fiduciary Responsibility and Accountability for Unpaid Debts Act) would increase VBA’s authority and ability to address fiduciary fraud and in turn, reduce the impact of fiduciary misuse on our nation’s veterans and their families.

“This legislation will help stop blatant abuse the very people tasked with managing the finances of our veterans – who may flagrantly fleece them of hard-earned benefits,” said Ranking Member Blumenthal. “The nation must provide necessary, long-overdue protections to our most vulnerable veterans – ensuring that VA can conduct critical oversight to protect veterans’ benefits from being squandered or misused. In uniform, in combat, and in service to our country, our veterans earned this peace of mind and security.”

“Veterans who rely on fiduciaries to handle their benefits are some of the most vulnerable among us, and we have a duty to protect them – especially where others have manipulated them” said Senator Moran. “I am pleased to be sponsoring legislation to make certain those who have sacrificed for our nation receive the benefits they have earned.”

“Veterans and their families deserve the security of knowing that the VBA’s Fiduciary Program is protecting their benefits against misuse,” Brown said. “This bill would address abuse of the program, strengthen oversight, and ensure that all veterans affected by fiduciary fraud are fully reimbursed.”

In September, Senators Blumenthal and Brown, with their colleague Joe Manchin (D-W.V.), wrote to VA Secretary Robert McDonald requesting information on how VA is addressing the VBA Fiduciary Program’s failures to adequate support the nation’s veterans.

Specifically, the FRAUD Act incorporates two FY 2016 VA Budget Submission Legislative Proposals that would enhance VBA’s oversight capacity of the Fiduciary Program:

  1. Authorize VBA to reissue benefits to a beneficiary in all cases of fiduciary misuse, without regard to the amount of beneficiaries managed or proof of VBA negligence. Require VBA to pay the beneficiary, or the successor fiduciary, an amount equal to the misused benefits.
  2. Enhance VBA access to financial accounts held by all fiduciaries of VA beneficiaries.

The legislation is endorsed by the Paralyzed Veterans of America (PVA).

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