HARRISBURG — A 48-year-old Perry County woman was sentenced to six months of house arrest and two years of probation for her role in defrauding a disabled veteran out of more than $300,000, spending the money on themselves.
Laurie Ehrhart, of New Bloomfield, pleaded guilty in December in federal court to helping her husband at the time, Jason Ehrhart, misappropriate the disability benefits of his brother, Michael Ehrhart, who was diagnosed with multiple sclerosis while serving in the U.S. Army in 1985, according to U.S. Attorney David J. Freed.
Jason Ehrhart pled guilty to several offenses related to the case in November 2018, and was sentenced to 19 months in prison, according to Freed.
Michael Ehrhart began receiving disability benefits from the U.S. Department of Veterans Affairs in 1998, and was eventually hospitalized at the VA hospital in Lebanon in 2004. He began receiving disability benefits from the Social Security Administration in 2006, Freed said.
In August 2006, Freed said, Michael Ehrhart was deemed unable to handle his own financial affairs, and Jason Ehrhart applied to become his brother’s fiduciary and legal custodian. Under the terms of a fiduciary agreement, Jason Ehrhart agreed to use all of Michael Ehrhart’s VA disability benefits exclusively for Michael Ehrhart’s benefit. In the agreement, Jason Ehrhart was warned not to use any of the funds for his own personal benefit, Freed said. Jason Ehrhart was also required to submit an annual accounting of the amount of money received and spent on Michael Ehrhart’s behalf to the VA, according to Freed.
While Jason Ehrhart served as Michael’s VA Fiduciary and Legal Custodian, Freed said, all of Michael’s VA benefits, plus most of his Social Security disability checks, were deposited into a checking account Jason Ehrhart opened at The Orrstown Bank.
Altogether, $476,260 in federal benefits ($422,828 in VA disability, $48,187 in Social Security disability, and $5,244 in VA clothing allowance) were deposited into the account between January 2009 and August 2016, according to Freed.
However, during that same time period, $316,360 of the $476,260 was misappropriated by Jason and Laurie Ehrhart and converted to their own use, Freed said.
Checks totaling $218,832 ($96,202 payable to Jason and $122,630 payable to Laurie), were drawn against the account, Freed said. Of the $218,832, $157,742 was deposited into Jason and Laurie Ehrhart’s joint checking account at the Juniata Valley Bank, and at least $23,496 was converted to cash, Freed said.
Thereafter, the funds in the joint JVB account were employed by Jason and Laurie Ehrhart to pay personal expenses, according to Freed. Checks totaling $7,174 were also made payable to Jason and Laurie Ehrhart’s two minor children. Jason Ehrhart would instruct the children to take the checks to the bank, cash them, and surrender the cash to him, Freed said.
The Ehrharts also signed $19,890 worth of checks to another couple they were friends with, treating them and their children to dinners, all-expense-paid vacations to Disney World, automobiles, and the woman’s dental work, according to Freed.
To conceal his embezzlements, Jason Ehrhart submitted eight false annual accountings to the VA in which he falsely claimed he spent $402,408 on Michael’s behalf. The itemized expenditures in the annual accountings were grossly inflated, Freed said.
For example, Jason Ehrhart claimed he paid the mortgage on the veteran’s residence ($1,631 per month) plus Michael’s share of the mortgage on his mother’s residence ($881) after she died in May 2011. However, the lenders for both properties obtained default judgments and both properties were eventually foreclosed and sold.
Jason Ehrhart also falsely claimed in the annual accountings that he spent thousands on miscellaneous expenditures for Michael Ehrhart, including storage unit rentals, vehicle maintenance bills, state and local taxes, life and auto insurance, and credit card bills.
However, in 2016 the veteran’s specially equipped wheelchair van, for which Jason Ehrhart claimed he spent approximately $32,395 on maintenance, was found broken down and abandoned along a Perry County roadside.
The total amount the Ehrharts misappropriated was $316,360, according to Freed.
Laurie Ehrhart admitted she helped Jason complete the eight false annual accountings in her handwriting, Freed said.
Michael Ehrhart died at the Lebanon VA Hospital on July 30, 2018.
As part of their sentences, Laurie and Jason Ehrhart to pay $316,360 restitution to Michael’s son, his only known heir.
