Michigan man sentenced to 18 months in prison over veterans benefits

Posted Nov. 07, 2011, at 4:09 p.m.
Last modified Nov. 07, 2011, at 7:03 p.m.

BANGOR, Maine — A Michigan man was sentenced Monday in U.S. District Court to 18 months in prison for illegally receiving veterans benefits while he worked at the Togus Veterans Affairs Medical Center in Augusta.

Mark Stephen Palmquist, 44, of Menominee, Mich., also was sentenced to three years of supervised release.

He qualified for disability benefits due to a 1989 accident in Central America.

In addition, U.S. District Judge John Woodcock ordered Palmquist to pay $47,229 in restitution. The judge ordered that Palmquist begin serving his sentence Jan. 6.

Palmquist was indicted last fall by a federal grand jury in Bangor for making a false and fraudulent statement, theft of government property, fraudulent receipt of Veterans Affairs services and 21 counts of wire fraud.

He pleaded guilty in May to one count of making a false claim for veterans benefits and one count of theft of government property. As called for in Palmquist’s plea agreement with the U.S. Attorney’s Office, the other charges were dismissed Monday after sentencing.

The bulk of the charges on which he was indicted stemmed from disability payments Palmquist received because of injuries he suffered in a 1989 helicopter crash in Panama while serving in the U.S. Marine Corps.

Palmquist suffered injuries to his back and brain that qualified him to receive disability benefits, according to court documents.

The amount of the monthly check an individual receives in disability benefits is based on the number of dependents being supported, according to court documents. Palmquist applied for dependent benefits in June 2002 when he married and was supporting a stepchild, according to the documents. He divorced his wife a year later but allegedly did not inform the proper authorities so his benefits could be reduced to what they had been when he was single.

The wire fraud charges stem from the fact that his benefit check was automatically deposited into a credit union account in Portland between Dec. 1, 2006, and May 30, 2008.

Assistant U.S. Attorney James Moore, who prosecuted the case, said in a telephone interview after the sentencing that he recommended Palmquist spend three years behind bars. Defense attorney George “Toby” Dilworth of Portland recommended his client be sentenced to a year and a day in prison, which would have allowed him to earn good time.

“Mr. Palmquist accepts the court’s decision and is looking forward to paying the restitution and resuming his life,” Dilworth said in a telephone interview after the sentencing.

The defense attorney said that the restitution would be repaid by the VA deducting $400 a month from Palmquist’s $1,600-a-month benefits check.

Palmquist worked as a patient representative at Togus from November 2006 to March 2010 but now is unemployed, according to court documents.
Before moving to Maine, he worked for more than two years at the VA Medical Center in Iron Mountain, Mich., in the state’s Upper Peninsula on the Wisconsin border.

Last December, a federal jury in Portland issued a split verdict in Palmquist’s discrimination lawsuit against the U.S. Department of Veterans Affairs.

After deliberating for 5¼ hours, jurors found that the VA facility in Michigan had denied Palmquist affirmative action for disabled veterans when his former supervisor gave him an unfavorable reference in March 2006.

The jury also found that the bad reference was in retaliation for Palmquist’s complaints that he had been denied legally required promotion opportunities for disabled veterans. But jurors also decided that retaliation was not his former supervisor’s motive for writing the negative recommendation and that Palmquist would have been denied the promotion he had applied for in Tennessee anyway.

Woodcock entered judgment for the VA after the jury’s verdict in the lawsuit filed in 2007 was announced.

The criminal indictment, handed up by the federal grand jury in Bangor on Sept. 15, 2010, alleged that Palmquist lied about his criminal background when he applied to work at Togus in 2006. He was convicted of assault and battery on June 4, 2001, according to court documents, but on his application he said he had never been convicted of a crime.

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