Choctaw County man accused of lying about Purple Heart admits fraud: Alleged scheme cost government more than $800,000

U.S. District Court in Mobile, Alabama.
U.S. District Court in Mobile, Alabama.(Brendan Kirby/FOX10 News)
Updated: Jun. 16, 2021 at 12:38 PM CDT
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MOBILE, Ala. (WALA) - A Choctaw County man accused of falsely claiming to be a Purple Heart recipient and engaging in a multi-layered fraudulent scheme that prosecutors allege cost the government nearly $1 million pleaded guilty to federal charges Wednesday.

Brandon Leross Bailey faces a maximum of 10 years in prison, although under federal advisory sentencing guidelines, the actual punishment likely will be less.

Bailey pleaded guilty in Mobile’s federal court to theft of government property and bankruptcy fraud. In exchange, prosecutors will ask the judge to dismiss other charges.

The indictment alleged that Bailey was a major in the U.S. Air Force in 2010 when authorities charged him with illegal drug possession and theft. After a court martial, the Air Force dismissed him with the equivalent of a dishonorable discharge, according to court records.

But the Defense Finance and Accounting Service never received notice of Bailey’s dismissal, and he admitted to using that administrative error to collect paychecks and receive health care and military facilities from 2010 to 2017. Prosecutors allege that amounted to $818,918 loss to the Air Force.

Prosecutors contended that at various times, the defendant portrayed himself as a retired Air Force nurse, a combat rescue officer, a veteran of combat in Afghanistan and a Purple Heart recipient.

Prosecutors also alleged that Bailey applied for disability benefits, claiming that several medical conditions made him unable to work. He fraudulently stated that he had been “medically disqualified for military service,” according to the indictment.

Prosecutors alleged that the defendant received $155,396 in disability benefits that he was not entitled to. The indictment accused him of working as a “veteran’s consultant” and part-time faculty member at an Alabama private university but failed to disclose that work to the Social Security Administration.

The indictment also contained allegations that Bailey defrauded that U.S. Department of Agriculture by obtaining almost $15,000 in benefits from a conservation program known as “Beginning Farmer or Rancher.” He was not permitted to participate in that program and collect disability payments, according to the indictment.

Bailey also lied about his dishonorable discharge on an application for funds under a “Veteran Farmer or Rancher Program,” the indictment states.

Lying about his military status also allowed Bailey to obtain bank loans totaling $4,309,193, according to the indictment.

The bankruptcy fraud conviction concerns a February 2019 filing. Prosecutors alleged that he concealed $30,750 in rental income for real estate in Butler and about $33,817 in consulting and teaching income from a private university. In addition, the indictment charged Bailey with concealing from the bankruptcy administrator two pieces of property valued at $139,760 and insurance proceeds of $89,250 that he received after a July 2019 house fire in Butler.

Finally, the indictment alleged that Bailey gained power of attorney on July 1, 2019, over his father’s finances and executed a will that made him the sole heir to the estate. On the day of his father’s death 10 days later, according to the allegations, Bailey sold seven properties for $204,440 to another person, who then sold them the following than made the sale proceeds payable to him and the defendant.

The indictment alleged that the transaction was part of a scheme to conceal the properties from the bankruptcy administrator.

Senior U.S. District Judge Ginny Granade will take up the issue of forfeiture at sentencing. Prosecutors have indicated that they want to seize several bank and securities accounts, along with a pickup truck and 12 pieces of property.