Former Federal Employee Claimed His Sister as His Wife to Get Benefits

A former federal employee has pleaded guilty to federal health care fraud totaling over $150,000.

A former federal employee with the Department of Transportation Federal Highway Administration pleaded guilty this week to federal health care fraud.

Edward Stephen of Baton Rouge, LA fraudulently enrolled extended family members into his federal health care plan knowing they were not eligible for federal health care benefits. 

Specifically, Stephen enrolled his sister as though she was his wife and his niece as though she was his stepchild so that they would obtain government provide health care coverage they were not entitled to receive. This scheme lasted from 2005 to 2017 and included several years where Stephen resided in and worked in Charleston, West Virginia as a federal employee.

When investigators learned of the fraud, Stephen gave a statement to investigators with Department of Transportation Office of Inspector General, in which he admitted that he fraudulently placed his extended family members on his federal insurance knowing they were not entitled to receive benefits. In total, the health insurance company was defrauded out of $151,660.53 in fraudulent premium payments and reimbursements.

Stephen faces up to 10 years in prison, a $250,000 fine, and three years of supervised release. He is also subject to an order of restitution for $151,660.53.

“For 12 years Mr. Stephen lied to get federal health insurance for ineligible family members,” United States Attorney Mike Stuart said. “Let this be a clear message, if you are cheating the system we will find you.”

About the Author

Ian Smith is one of the co-founders of He has over 20 years of combined experience in media and government services, having worked at two government contracting firms and an online news and web development company prior to his current role at FedSmith.