Jury: Blythewood man defrauded VA, Social Security of $1.5 million in claiming hyped-up MS disabilities

A federal jury on Friday found a Blythewood man guilty of stealing $1.5 million from the Veterans Administration and Social Security by falsely claiming for years that he suffered extreme impairments from multiple sclerosis.

While the man, Dennis Paulsen, 45, did in fact have multiple sclerosis, government prosecutors presented evidence during the six-day trial that Paulsen had for years led an active life that enabled him to claim some $9,400 a month in tax-free benefits instead of a far lesser amount.

The yearly tax-free income of some $112,000 from the VA and Social Security enabled Paulsen to live a nice life – unlike most people, Paulsen didn’t have a regular job – at his two-story home in Blythewood, which he shared for years with his now ex-wife, Kristine, and two sons.

Evidence presented during the trial showed that Paulsen had for years led a highly active life, playing multiple sports at a high level and even running in the Marine Corps Mud Run in 2008. On the last leg of that mud run, he picked up a stretcher with a person on it and lugged it to the finish line, evidence showed.

Government investigators used a variety of techniques, including surveillance video, undercover agents and developing human sources to bring what prosecutors terms was overwhelming evidence to the trial.

Paulsen will be sentenced at a later date. He could receive several years in prison. The government is also seeking to seize his house at 108 Ashley Ridge Rd. in Blythewood. That two-story, four-bedroom 2,950 square ft. house in now on the market for $297,144. Paulsen bought it in 2004 for $278,000.

The verdict came in around 1 p.m. Friday, about two hours after the jury began deliberating.

FROM AN EARLIER STORY :

The case is unusual in that such a large amount of alleged fraud – a combined $1.5 million in VA and Social Security benefits, mostly from the VA – by one person is seldomrarely brought to trial or even investigated by the government. A major reason is that after a disability case is diagnosed and someone’s status is established, the government seldomrarely investigates to verify that someone’s disability is what they claim.

Multiple sclerosis, known by its initials MS, is a fatigue-inducing nervous system disease that can affect the brain, spinal cord, vision and balance.

After being diagnosed in the early 1990s with 30 percent disability because of multiple sclerosis, Paulsen had his impairment rating sharply increased in the late 1990s by the Veterans Administration. To get that kind of diagnosis, Paulsen reported inability to use his hands and feet, loss of balance and the need for daily help. But Paulsen was actually faking symptoms to get increased monthly checks, government prosecutors said.

Two years ago, the Veterans Administration began investigating Paulsen after getting a tip from his ex-wife’s stepfather. The stepfather said Paulsen’s disabilities weren’t what he claimed and that the Blythewood man was actually leading an active life, according to government witnesses.

“Everyone is entitled to benefits, but what you are not entitled to do is lie, cheat and steal to get them,” assistant U.S. Attorney Jay Richardson told the jury in his closing argument.

After doing an initial probe in 2014, VA and Social Security criminal agents Paul Lee and Neal Dolan launched an investigation of Paulsen that, before it was finished, involved undercover agents, video surveillance, tracking him to places such aslike Jillian’s, retrieving surveillance videos from banks and the Columbia Metropolitan Airport. The videos were played to the jury and showed Paulsen doing activities he shouldn’t have been able to do with the impairments he claimed.

Key pieces of evidence were photos and writings from an Internet blog kept by Paulsen’s former wife, Kristine Paulsen, from about 2006-2011. During that time, Dennis Paulsen was receiving his major benefits.

In that blog, Kristine Paulsen had inserted photos of her husband playing numerous adult sports and being highly active. She also had written glowing notes about how proud she was of him. She also told the jury that Paulsen told her he was exaggerating his symptoms to game the system, prosecutor Richardson said.

But in 2012, the Paulsens began to fight. Dennis Paulsen moved out, and later, Kristine Paulsen took the children and moved to Charleston. In 2014, they got a divorce. She was a government witness during the trial, telling the jury what an active life he had led. But her testimony, Bannister told the jury, was tainted.

“Why are we here? It’s the same old story you have heard many, many times – a woman scorned,” Bannister said. “She has convinced the government and its agents to prosecute her ex-husband.”

Assistant U.S. Attorney Bill Day wrapped up closing arguments, telling the jury Paulsen actually does have a case of MS. But it is a mild case of the disease, not the severely debilitating form Paulsen claims to have.

“MS can cover a broad spectrum; the question is, does it affect his life?” Day said.

According to evidence, Paulsen had joined the U.S. Navy in the late 1980s, intending to become a SEAL. But Navy doctors determined that he had a case of multiple sclerosis and mustered him out. He began receiving disability benefits and in the late 1990s, was diagnosed as wholly disabled. The Social Security Administration joined in the diagnosis. As a result, he got a sizeable monthly check.

During the trial, Paulsen testified for more than four hours, telling the jury he did, in fact, have a severe case of multiple sclerosis.

In 2004, he moved from Virginia, where he had been diagnosed originally, to Blythewood.

This story was originally published January 22, 2016 at 1:48 PM.