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Benefits “flip-flopping” by the VA may earn former deputy new fraud trial

FILE _ A Spokane Valley man was sentenced Tuesday at the Thomas S. Foley United States Courthouse, shown here in 2014, to serve 15 years in federal prison after he previously pleaded guilty to posing as a teenager to convince other teens to provide nude photographs that he then used as blackmail to obtain more. James A. Joy, 29, must also register for life as a registered sex offender. (Jesse Tinsley / The Spokesman-Review)
FILE _ A Spokane Valley man was sentenced Tuesday at the Thomas S. Foley United States Courthouse, shown here in 2014, to serve 15 years in federal prison after he previously pleaded guilty to posing as a teenager to convince other teens to provide nude photographs that he then used as blackmail to obtain more. James A. Joy, 29, must also register for life as a registered sex offender. (Jesse Tinsley / The Spokesman-Review)

A former Spokane County sheriff’s deputy may get a new trial after one of the federal agencies he was convicted of defrauding somehow didn’t keep up on current events and restored his full benefits some four months after he was found guilty at a public trial.

A jury last September found Donald B. Henderson guilty of lying to obtain more than $650,000 in benefits from both the Veterans Benefits and Social Security administrations, which had been paying him since he signed off on eye exams in 2002 that claimed he was legally blind and could not work.

But prosecutors showed jurors hours of videos showing Henderson driving a riding lawnmower, fixing sprinklers and taking an undercover agent to a shooting range where Henderson both hit his paper target and told the agent where his bullets were striking some 20 paces away. The trial also included a Veterans Administration expert who testified how thoroughly the agency reviews its requests for disability payments.

The jury acquitted Henderson on a charge of committing Social Security fraud but found him guilty of theft of money from Social Security, making false statements to the VA and theft of money from the VA.

Despite the convictions last year, the VA sent Henderson notice in February that he had been deemed “unemployable” and was now eligible for “retroactive reinstatement” back to 2002 for 100-percent disability payments.

Armed with that new document, Henderson’s attorneys asked U.S. District Court Judge Rosanna Malouf Peterson in April for a new trial based, in large part, on newly discovered evidence.

Then on May 1, the VA reversed course and again retroactively denied Henderson benefits based on “new evidence,” which apparently refers to the September conviction that someone learned about that same day.

“The logical inference from this whirlwind about-face is simple: (The Office of Inspector General) pressured the VA into changing its decision after receiving Mr. Henderson’s motion,” defense attorney Colin Prince wrote in court records. “Moreover, the VA’s constant flip-flopping only undermines its own credibility and supports Mr. Henderson’s Rule-33 motions. After all, a jury should be entitled to know that the VA’s ‘clear and unmistakable opinions’ shift.”

In court Monday, Peterson seemed to agree, saying the changing positions of the VA regarding Henderson’s disability status was part of her reasoning to consider a new trial.

“I do have a great deal of respect for the jury system,” Peterson said. “I will tell you I have serious concerns about the government’s case” and how the changing VA positions “may have affected the jury’s decision.”

Assistant U.S. Attorney Patrick Cashman asked Peterson to allow the conviction to stand, noting that the jurors were able to hear from all of the defense witnesses, testimony about Henderson’s changing sight and experts about the impacts of his keratoconus, which is a thinning of the eye’s cornea wall.

“When looking at the evidence as a whole, the jury can look at all these things to assess the weight. The defendant did portray to the VA that he had a permanent condition,” Cashman said.

Peterson replied: “There is a difference between permanent blindness and a permanent condition of fluctuating vision. Is the government taking two different stances here?”

Cashman said everyone agreed that Henderson’s keratoconus is a permanent condition. The dispute comes in the “subjective” eye exams when doctors relied on Henderson telling them what he could see.

“If he walks in and says he can’t see anything but he can see everything, that’s untrue,” Cashman said. “It was appropriate for the jury to consider.”

Peterson asked about the initial diagnosis in 2002 and whether Cashman considered Henderson’s initial lie based from a doctor’s written opinion.

“I’ve had problems with this from the beginning,” she said.

Cashman said both sides presented different theories. He noted a large disparity in what Henderson told eye doctors he could see versus his actions, such as shooting at the range and calling out where bullets are hitting the target.

“That draws a very large conflict in the evidence,” he said. “It is presumed that the jury resolved whatever conflict there is between the two theories. The defendant was afforded a fair trial.”

Peterson asked Cashman how the VA’s “flip-flopping” on Henderson’s benefit status affected the government’s case.

“How the VA made that decision (to restore benefits), I’m not aware of,” Cashman said. “I can’t speak to why the VA didn’t access the jury verdict.”

VA spokesman Bret Bowers referred questions to his counterpart, Rob Hard in Seattle. Hard did not respond Monday to phone and electronic messages seeking comment from the VA regarding the decision in February to restore Henderson’s benefits four months after his conviction.


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