Chapter 11
Ethics Dilemma
Should He Forfeit His Property Even if a Jury Didn’t Convict Him?
U.S. v. 340 St. Bees Drive, Severna Park Maryland (U.S. District Court, D.C 2008)
(U.S. v. 340 St. Bees Drive, Severna Park, Maryland, 2008)
FACTS
On September 11, 2001, Charles E. Coughlin was a Commander in the U.S. Navy. From June 2001 until he retired in June 2002, Coughlin was stationed at the Pentagon in the Navy Programming Division in Arlington, Virgina. Coughlin is a graduate of the Naval Academy and Harvard Business School who spent most of his 21-year military career in the submarine service, with a top-secret security clearance and shared command of nuclear submarines.
On December 19, 2003, Coughlin initiated a claim for damages with VCF by faxing interstate, Part I of the Personal Injury Compensation form from Maryland to a VCF office in Virginia. In his application, Coughlin alleged that he suffered a partial, permanent disability from the September 11 attack on the Pentagon. He asserted that on September 11, he was struck on the head by falling debris. He also alleged that when he re-entered the Pentagon to assist in rescue efforts, he inadvertently struck his head on what he believed to be a door.
Coughlin’s letter to VCF refers to a report by Anne Bowen, a physician with the Family Health Center at the Naval Academy at Annapolis, Maryland. Coughlin wrote “attached is a statement from Dr. Bowen detailing the extent of my injuries which has worsened already and continues to do so until at some point I obtain surgical steps to correct/ameliorate symptoms.” Coughlin failed to submit Doctor Bowen’s October 1, 2003 report to VCF. A review of Dr. Bowen’s October 1, 2003 report shows that contrary to Coughlin’s contention, she did not opine that Coughlin needed surgery for his alleged September 11, 2001 injuries.
Dr. Bowen’s October 1, 2003 report described information Coughlin provided to her about the alleged injuries he sustained on September 11, 2001. She also detailed Coughlin’s prior medical history, including neck pain since 1982. Dr. Bowen’s report also included information about a 1998 neck injury from a fall. Coughlin acknowledged that he had previously suffered a similar injury in 1998, but claimed that he had fully recovered from his prior cervical spine injury. Coughlin did not submit his pre-September 11, 2001 medical records to VCF.
Coughlin had a history of neck and shoulder ailments prior to September 11, 2001, including an injury as early as 1978 to his left shoulder. As proof of Coughlin’s alleged recovery from his prior injuries, Walter Laake, Coughlin’s attorney, submitted the results of three marathons Coughlin ran prior to September 11, 2001. In his letter to the Special Master, Coughlin wrote, “since 9/11 my life has changed substantially. I no longer engage in many athletic activities or am able to perform numerous household functions to the degree I did previously due to the symptoms mentioned above limiting my ability to participate,” and “avoid any activities requiring abrupt turning of my head or raising my left arm above my shoulder for any length of time.” Accordingly, “I no longer run marathons, ceased playing lacrosse last season after one game, and avoid playing basketball to any degree since I am a ‘lefty’ shooter.”
Post September 11, 2001, Coughlin continued to participate in physical activities, including lacrosse, basketball, and running. For example, Coughlin ran the New York marathon in November, 2001. He successfully completed the course in under four hours. Coughlin injured his left index finger playing basketball post September 11, 2001. Coughlin played a number of lacrosse games post-September 11, 2001.
On February 2, 2004, VCF determined that Coughlin’s application for benefits should be denied due to ineligibility. On February 17, 2004, Laake sent from his Maryland office to the D.C. office of VCF, by Federal Express, Coughlin’s appeal of his denial of VCF compensation. On February 20, 2004, Laake sent from Maryland to the D.C. VCF office, via the U.S. Postal Service, a cover letter and Coughlin’s post-September 11, 2001 certified medical records. Omitted from those records was a medical record which documented Coughlin’s finger injury which he received playing basketball.
On March 9, 2004, Coughlin caused his attorney to mail from Maryland to the D.C. VCF office, a medical report from Robert Smith, M.D., a letter from Kathleen Buda, R.N. (Coughlin’s sister) and a letter dated February 18, 2004 from Rear Admiral Route. Without mentioning Dr. Bowen, Laake attached Dr. Smith’s report in which he diagnosed Coughlin with a permanent, partial disability to his neck. According to Laake, Dr. Smith was consulted because of Coughlin’s “inability to obtain medical records from military personnel.” Coughlin saw Dr. Smith only once. Coughlin did not provide Dr. Smith with his complete medical records.
Based on the new information, VCF reversed its earlier decision, finding Coughlin eligible for benefits. VCF offered Coughlin a “Presumed Award” of $60,000, based on his submissions, which Coughlin rejected. On April 30, 2004, Laake sent an appeal of the $60,000 award from his Maryland office to the D.C. VCF office by Federal Express, and requested a hearing on damages.
A hearing was held on May 13, 2004. At the hearing, Coughlin continued to claim that his prior injuries had resolved prior to September 11, 2001. Coughlin was specifically asked what medications he was taking before September 11, 2001. Coughlin responded, “nothing to do with any musculature-related problems.” In fact, Coughlin was prescribed medication to relieve muscle pain before September 11, 2001.
Coughlin claimed that as a result of his alleged September 11, 2001 injuries, he was no longer able to perform simple tasks, including hanging mirrors, installing curtains, painting, mulching, power washing, and putting up Christmas lights. He offered numerous exhibits to justify the amount of damages he sought.
On June, 2004, based on Coughlin’s assertions that he was permanently partially disabled as a result of September 11, 2001 attack on the Pentagon, Coughlin was awarded $331,034 in damages: $151,034 for economic loss and $180,000 for non-economic loss.
Based on the facts set forth in this complaint, there is reasonable cause to believe that from December 19, 2003 to June 28, 2004, Coughlin submitted false written statements and made material misrepresentations to VCF in order to obtain funds to which he was not entitled. These false statements relate to Coughlin’s post-September 11, 2001 physical condition and need for replacement services as well as misrepresentations regarding Coughlin’s prior injuries.
OPINION
A judge declared a mistrial Wednesday in the case of a retired naval officer accused of defrauding a fund for the victims of the Sept. 11 terror attacks, after a jury could not agree on whether he was guilty of the central charge against him. A jury found retired Cmdr. Charles Coughlin not guilty of three charges of mail fraud. But jurors said they were deadlocked on four other counts he faced, including the main charge of making a false claim to the 9-11 victims compensation fund.
The trial lasted a month, and jurors deliberated for five days before sending a note to Judge Henry Kennedy saying they could only come to a unanimous decision on three counts. Kennedy sent them back to deliberate, but a few hours later they responded that agreement was hopeless. Jurors leaving the court said they were split 10-2 on the main count. Prosecutors had argued that Coughlin hadn’t really suffered a partial permanent disability from the attack as he claimed because the avid athlete continued to play lacrosse and basketball and ran the New York City marathon in three hours and 43 minutes. “He ran a marathon after 9-11 so that threw a lot of suspicion on him,” said juror Lois Rosen, who voted to convict him.
But juror Brian Muldoon and juror foreman Dave Geckle said they thought Coughlin was the kind of man who wouldn’t let the pain stop him from exercising. “I broke my hip but I still run,” Muldoon said. Geckle said he thought Coughlin was guilty when the prosecution presented its case, but changed his mind after seeing Coughlin testify because he seemed credible.
Civil Action
Coughlin filed his application for victims’ compensation in 2004, just before the fund was about to shut down, said Walter Laake, the lawyer who helped him submit the papers. “I asked him why he waited for so long, and he said he felt very bad that he survived and others didn’t,” Laake recalled in an interview. “He felt terrible.” “I thought this guy was a hero, he was what you would think of when you think of an officer in the armed forces -- forthright, intelligent,” Laake said. “The allegation of what he was supposed to have done was so out of character from what I was exposed to.”
According to prosecutors, Coughlin asserted that his life had changed “substantially” since 2001. “I no longer run marathons,” the commander wrote, “ceased playing lacrosse last season after one game, and avoid playing basketball to any degree since I am a ‘lefty’ shooter.’” But prosecutors contend in the lawsuit that Coughlin ran the marathon in New York in November 2001, that he “injured his left index finger” playing basketball and that he joined “a number of lacrosse games.”
The compensation fund denied Coughlin’s first application in February 2004. Two weeks later, Laake appealed the decision, sending more medical records. The compensation board then reversed its decision and awarded $60,000. But Coughlin appealed the ruling again, according to prosecutors. At a hearing in May 2004, Coughlin cited several examples of services he had to pay for as a result of his injuries, including $230 for window washing. Yet prosecutors claim that Coughlin’s banking records indicate that at least one check he cited was used to pay the “Severn River Swim Club.” After a hearing, the compensation board in June of 2004 increased his award to $331,034 -- including $151,034 for economic losses.
Six months later, prosecutors say, Coughlin used at least $200,000 of the money to buy his home, a 4,200-square-foot brick house with four bathrooms and a three-car garage. Coughlin also used the money to pay off loans he had taken out to pay for the 2002 Mercedes-Benz and a 2002 Honda Odyssey. The government has taken the vehicles pursuant to a seizure warrant, which is approved by a judge. Prosecutors want the court’s permission to seize them permanently.
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