VA Hires Convicted Felon to Manage Veterans' Money - | Nashville News, Weather & Sports

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VA Hires Convicted Felon to Manage Veterans' Money


By Jennifer Kraus
Consumer Investigator

They have served and sacrificed for our country.

But now a NewsChannel 5 investigation is raising questions about a federal program that's supposed to help thousands of veterans and their families.

The program is run by the U.S. Department of Veterans Affairs or VA and handles more than $700 million dollars in taxpayer money.

But NewsChannel5 Investigates found the VA hired a rather unlikely person to oversee some of that money.

Dennis Keyser's father served two terms in Vietnam and then died from a service-related injury when Dennis was 7 years old. Now, Keyser gets monthly benefits from the VA as a dependent.

Keyser has cerebral palsy and because of his disabilities, the VA hired a fiduciary for Keyser, someone to collect his benefits and manage his money.

"He was supposed to pay my bills that I had coming to me and when I needed money, he was supposed to send me some," Keyser explained.

Keyser didn't know much about his VA fiduciary, a man by the name of James Hammonds, until a friend went online and Googled Hammonds' name.

Bob Albertson, Keyer's friend, recalled, "It just blew my mind. I'm looking through it and I'm like, 'No, this can't be the same man.'"

It turns out, Hammonds, a former investigator with the IRS, was a convicted felon.

After learning this, Keyser wondered, "Why would they (the VA) assign a convicted felon to handle my money?"

Court records show Hammonds pled guilty less than two years earlier to 8 counts of tax fraud, admitting that he'd falsified tax records to help adult entertainment mogul Jerry Pendergrass hide millions of dollars from the federal government.

NewsChannel5 Investigates asked Keyser, "Has the VA ever provided an explanation to you?"

"No," Keyser replied.

And, what shocked Keyser even more was discovering that Hammonds had three months earlier been sent to federal prison and then died soon after. Yet, the VA apparently had no idea his fiduciary had been locked up and now was dead.

Keyser's friend, Bob Albertson, told NewsChannel5 Investigates, "Obviously, they're not doing their jobs."

The regional office for the VA is in the Federal building downtown. But, they wouldn't let NewsChannel5 Investigates in to ask how something like this could happen. The VA's regional director would only take questions by phone.

Mike Dusenbery, the regional Director, stated in a phone call, "If your story is you want to say, 'Mr. Hammonds was indicted and the VA sent funds to that company,' that's the story. Yes, we did. I can't deny that."

So how does a convicted felon end up working for the VA? As our investigation revealed, the VA does little to screen its fiduciaries like Hammonds and little to keep tabs on the money they handle.

Congressman Jim Cooper told NewsChannel5 Investigates, "When you brought this to our attention, I was completely amazed and outraged that stuff like this could go on in Tennessee 'cause I thought Tennesseans lived to a higher standard than this."

Cooper said the VA needs to do a better job. But, the VA's heard that before.

A year ago, the federal government blasted the fiduciary program for failing to protect veterans' benefits while the VA's own audit found the VA failed to effectively manage the program.

And in Nashville, auditors called for tougher controls after finding cases that failed to have proper documentation and even fiduciaries who'd been overpaid.

NewsChanel5 Investigates asked Keyser, "No one can tell you where your money is?"

"No one," Keyser answered.

Keyser now can't even get simple bank statements to see how his money was managed because the VA never required Hammonds to turn in any sort of monthly accounting. The VA though now insists Hammonds did not mishandle any money.

According to Congressman Cooper, "The only conclusion you can draw is that the VA was not on top of this situation and probably others they were not on top of."

And Cooper now wonders how many other Dennis Keyser's are there out there who the VA has failed to protect.

Keyser said, "I know I'm disabled. But that doesn't mean I'm stupid. I'm not stupid. I realize that people are taking advantage of me and I want to know why."

Again, the VA insists Hammonds did nothing wrong with Keyser's money, but they have given Keyser no records to back that up.

The VA has opened an investigation to find out what happened to thousands of dollars that another fiduciary failed to give Keyser.

As far as Hammonds' conviction, the director insists Hammonds' guilty pleas don't matter because the VA hired Hammonds' company, not Hammonds personally to manage the accounts of Keyser and at least six veterans. Yet, we found it was Hammonds himself who was handling the money and signing the checks each month. Congressman Cooper said he plans to get to the bottom of this.

Meanwhile, Dennis Keyser now has a new fiduciary. The VA has asked a bank to manage his benefits.


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