A federal judge in Washington on March 10 sentenced a gay retired State Department official and his husband to 15 months incarceration for a scheme that prosecutors say enabled them to obtain at least $257,000 through false medical claims from a federal employee health insurance plan.
The sentencing came five months after former State Department official Russell Sveda, 70, and his husband, Richard Victor Schachter, 56, pled guilty to one count each of health care fraud in the U.S. District Court for the District of Columbia.
A statement released by the U.S. Attorney’s Office, which prosecuted the case, says the two men signed statements admitting they submitted a series of false claims for reimbursement of medical services they claimed Sveda received while the two were living in Germany between February 2007 and October 2010. Charging documents say Sveda signed over power of attorney authority to Schachter, who in turn filed false medical claims on Sveda’s behalf.
“Based on information the government has received to date, $257,000 of those claimed medical services, purportedly performed in Germany, are known to be false given the dates when travel and other records establish that Sveda was not in Germany,” the statement says.
In an October 2015 charging document, prosecutors say passport stamps and border crossing records obtained by federal investigators, including the FBI, found that at times when Sveda claimed he was receiving medical treatment in Germany he and Schachter either were traveling or staying in vacation destinations.
Among other things, the charging document says the two were traveling on the Queen Mary 2 from New York City to Southampton, England on one occasion when Sveda purportedly was receiving medical treatment in Germany. On another occasion, the charging document says, both men were staying in the upscale Canyon Ranch Spa in Lenox, Mass., at a time when Sveda filed claims for medical services totaling $50,000 allegedly performed at a treatment facility in Germany.
In addition to sentencing the men to 15 months incarceration, U.S. District Court Judge Thomas Hogan sentenced them to 36 months of supervised probation upon their release. He also required that they jointly pay $257,000 to the U.S. Office of Personnel Management as restitution.
Hogan said the 15 months sentence would be adjusted to reflect the 24 days that Sveda and Schachter spent in jail following their arrest at their home in Lauderdale-by-the-Sea, Fla., on July 10, 2015.
The arrest came two days after the two were hit with a 24-count indictment handed down by a federal grand jury in Washington. Among other things, the indictment charged the two with spending the money they improperly obtained through false medical claims for Sveda, in part, on travel in Europe and to pay for other expenditures unrelated to medical services.
In separate pre-sentencing memorandums filed in court by attorneys representing Sveda and Schachter, the attorneys urged Judge Hogan to sentence the men to the time they already served following their arrest and to a term of supervised release.
Federal Public Defender attorney Mary Manning Petras, who represented Sveda, argued that Sveda acknowledges he engaged in wrongdoing. But she said in the memo that he attributes a “downward spiral that led him to become involved in the instant offense” to a long history depression and alcoholism and a more recent affliction of prescription drug abuse.
She noted that Sveda successfully completed a substance abuse treatment program shortly before the sentencing was to take place.
She also noted that despite his bouts of depression and drinking problems, Sveda served for years as a distinguished State Department official in many important assignments overseas and in the U.S. Among other things, he was one of the first to help found the group Gays and Lesbians in Foreign Affairs Agencies, or GLIFAA, which advocates on behalf of LGBT Foreign Service employees, Petras says in her sentencing memo.
Schachter’s Public Defender attorney John Carney argued that Schachter “currently suffers from a number of mental health disorders,” including “mental illness, alcoholism, and other diagnosed illness.” Similar to Sveda, Carney states in his sentencing memo that Schachter had recently “acknowledged the severity of his alcohol and substance abuse problem and committed to a substance abuse and alcohol program.”
The attorneys for the two men also state in their respective court memos that their clients each struggled with accepting and being accepted as gay men during their early years.
People who knew the couple have said they were active in D.C.’s gay social scene in the 1990s and that Sveda was the host of sought after parties in his Adams Morgan townhouse during times when he was stationed in Washington.