Cash on display at a press conference at Framingham (Massachusetts) Police headquarters April 13, 2023 detailing a state wide drug bust.
Oceanside, California – A former federal employee and his wife have been sentenced in San Diego federal court after pleading guilty to defrauding the Department of Veterans Affairs (VA) out of more than $130,000 through a years-long scheme that falsely claimed the husband was unemployed and required full-time caregiving assistance.
Rafael Castro, a U.S. Navy veteran and former employee of both the Veterans Health Administration and the Internal Revenue Service, was sentenced Friday to four months in prison. Prosecutors said Castro, alongside his wife Miriam, falsely asserted he needed daily support for basic functions like dressing and personal hygiene. As a result, Miriam Castro received full-time payments through the VA’s Caregiver Support Program, which authorities intend to aid injured veterans with significant medical needs.
However, throughout this period of fraud, which spanned from 2018 to 2024, Rafael Castro was employed full-time by the federal government—first at the VA itself, then at the IRS. According to court documents, he repeatedly misled VA officials, stating in at least six separate instances that he was unemployed and entirely reliant on his wife’s care. These statements stood in stark contrast to his employment history, which included multiple promotions and advancements.
The Castros’ guilty pleas reveal a deliberate effort to exploit a program designed to offer real relief to wounded veterans. According to the Department of Justice, the fraud included false statements during official VA evaluations, including a 2023 interview in which Rafael Castro claimed he had not worked since 2018. Meanwhile, Miriam Castro received monthly caregiver stipends equivalent to a 40-hour workweek.
Federal prosecutors emphasized the betrayal embedded in the scheme, noting that Rafael Castro’s position within the very agency he defrauded made the deception all the more egregious. From 2015 through 2023, the Veterans Health Administration employed Casto, the same institution responsible for distributing the benefits he was falsely receiving.
“This case is an excellent example of the importance of internal inspections within government programs,” said U.S. Attorney Tara McGrath.
Officials from both the VA and IRS reiterated that no one—particularly government employees—would be shielded from accountability for abuse of federal programs.
While the sentence may appear modest compared to the financial damage, officials stressed that the prosecution serves as a warning: the federal government will pursue fraud within its ranks, and the institutions designed to serve the public will not tolerate internal exploitation.
