Three individuals are facing charges in connection with a scheme to defraud the U.S. Department of Veterans Affairs (VA) of over $9.1 million. The funds include money from the Post 9/11 GI Bill education benefits. Among the accused, one has already pleaded guilty.
According to court documents, Brian Matsudo, from Honolulu, Hawaii, Marshall Scott, from Kapolei, Hawaii, and Raheem Wells, from Indianapolis, Indiana, conspired to defraud the VA. Matsudo owned a massage therapy training school in Honolulu. Between November 2016 and November 2022, Matsudo, Scott, and others allegedly secured tuition assistance payments by not disclosing that the school was not in compliance with VA regulations.
The indictment states that Scott began working for Matsudo's school in November 2016. As part of the conspiracy, Scott submitted false enrollment certifications to the VA for at least 40 veterans. Scott was reportedly aware of the false information and falsely certified compliance with rules and regulations. In 2020 and 2021, Wells, who was a student at the school, allegedly helped recruit "students" who falsely claimed enrollment in courses.
It is alleged that both Scott and Wells profited from the scheme. Matsudo paid Scott for each recruited individual using VA tuition payments, while Wells received monthly payments from recruited individuals.
In April 2025, Matsudo pleaded guilty to one count of conspiracy to commit wire fraud and faces up to five years in prison. A federal judge will determine the sentence after reviewing the U.S. Sentencing Guidelines and other factors.
Scott and Wells have been charged with conspiracy to commit wire fraud and three counts of wire fraud, each carrying a potential 20-year prison term. Wells is also charged with obstruction of justice for instructing a witness to lie, which carries a maximum penalty of 20 years.
Matthew R. Galeotti, Acting U.S. Attorney Kenneth M. Sorenson for the District of Hawaii, Special Agent in Charge Dimitriana Nikolov of the VA Office of Inspector General, and Special Agent in Charge David Porter of the FBI Honolulu Field Office announced the charges.
The VA OIG and FBI are leading the investigation. Trial Attorney Ariel Glasner of the Criminal Division’s Fraud Section, with support from Trial Attorney Jennifer Bilinkas, is handling the case against Matsudo. The prosecution against Scott and Wells is being managed by Trial Attorney Glasner and Assistant U.S. Attorney Craig Nolan.
It is important to note that an indictment is not proof of guilt, and all defendants are presumed innocent until proven guilty in a court of law.