As Veteran Disability Claims Soar, Unaccredited Coaches Profit Off Frustration with VA System

Jim Peckey was a young Navy petty officer stationed in Bahrain when the 9/11 attacks happened. As the nation went on a war footing, he suddenly shifted from administrative and IT duties to lugging water and equipment 12 hours a day, seven days a week -- work that left him with chronic neck and back pain. He retired in 2002 but he put off applying for benefits because, like millions of veterans, he felt overwhelmed by the paperwork required.

That changed in 2020, when he watched a YouTube video in which a fellow veteran, Brian T. Reese, promised to help veterans navigate the benefits maze and lead "happier, healthier and wealthier" lives.

Peckey signed on as a customer with Reese's company, Austin-based VA Claims Insider. The 44-year-old Abilene resident, who now does IT work for a defense contractor, said he was charged nearly $10,000 for about six hours of coaching, some of which included watching pre-recorded online informational sessions with as many as 400 other attendees at a time.

Although Peckey did get a monthly disability check of around $1,500, he felt he was charged for information he could have found on the internet. To help him qualify for benefits, the company's coach pushed him to emphasize mental distress, Peckey said, even though what he considered that to be a "backseat concern" and wanted top-notch care for his chronic physical pain.

"Nothing short of a nightmare," he wrote in a December 2021 complaint filed with the Texas attorney general's office, in which he accused the company of "slimy car sales tactics" and "defrauding veterans out of their benefits." Peckey said he wanted to sue but could not find a lawyer to take on the case. He refused to pay VA Claims Insider, which then hired a collection agency to pursue his debt; he says he felt so strongly about the matter that he accepted the hit to his credit score.

In another complaint, Shana Hill, the wife of a Marine Corps veteran in Houston, said their coach "showed late and was disorganized and did not provide any strategy as advertised and promised." Another veteran, Simon Keller of Tucson, Arizona, estimated that he had paid nearly $8,000 for two hours of assistance and claimed the company was "extorting" veterans.

The Texas Tribune spoke with five of a dozen or so people who complained to the Texas attorney general about VA Claims Insider. All said the state hadn't meaningfully followed up on their concerns. Peckey, the Abilene veteran, said that the office suggested that he hire a private lawyer, or talk to the Better Business Bureau.

It's not only the attorney general's office that received complaints about VA Claims Insider. The Federal Trade Commission has gotten two dozen complaints, and the Better Business Bureau well over 100.

Last fall, after the Tribune began asking questions, the Texas attorney general's consumer protection bureau asked VA Claims Insider for documents for an "investigation" over potentially "engaging in deceptive acts in the sale of packages to aid and/or assist consumers in making disability claims to the U.S. Department of Veterans Affairs."

It turns out that in 2019, the VA's Office of General Counsel told the company in a letter that it "may be engaged in illegal activities, which include the unauthorized representation of claimants for VA benefits and charging them for your service," and that it, absent an adequate response, the company would have to "cease any and all illegal activities." It also warned the Texas attorney general's office that Reese's coaching efforts are clearly intended to "game the system."

Not long after, VA Claims Insider hired a law firm to perform an internal risk analysis. The analysis, obtained by the Tribune, raised concerns that its work could be construed as illegally assisting with claims preparation: "We cannot give VACI assurance that the business model and existing contracts will not be reviewed, investigated, and challenged by regulatory authorities (or prosecutors) empowered to do so, or that if challenged, VACI will prevail." It also recommended new policies to fully protect the company against potential allegations of kickbacks, financial fraud and other issues.

Outside Texas, other for-profit claims companies have gotten scrutiny, too. In 2021, Louisiana's attorney general secured a permanent injunction against an unaccredited veteran claims company there. Last October, the Federal Trade Commission reminded veterans that they don't need to pay for help getting benefits. The alert also warned of scammers who emphasize their military service to "gain your trust so you won't stop and ask questions about their pitches."

For this story, the Tribune reviewed internal company documents, consumer complaints and government emails and interviewed more than 25 current and former clients and coaches of VA Claims Insider. Some requested anonymity, citing nondisclosure agreements and fear of being sued.

VA Claims Insider says its material is consumed by 600,000 veterans each month, that 25,000 veterans have participated in its "paid membership programs" and that the vast majority are satisfied customers. A spokesperson, Jeff Eller, said that Peckey and other customers had made "exaggerated or unfounded complaints" to avoid payment, pointed to dozens of positive client reviews and said the Tribune was cherry-picking evidence to put the company in a negative light. Reese encouraged clients to share their stories with the Tribune, and a few dozen reached out, mostly with positive feedback.

Eller said the company "operates well within the law" and "is better today than ever before." He added: "VA Claims Insider has been conducting internal risk analysis since it launched in 2016, and still does. We are deeply troubled that confidential and privileged materials have been disclosed." He said the company introduced a code of conduct in January 2021 and updated and expanded it in August 2022; coaches now go through mandatory training and a probationary period.

Byzantine Claims System

More than 1.8 million veterans have some form of officially recognized disability as a result of service in the Afghanistan and Iraq wars. Moreover, a new federal law, the Honoring Our PACT Act, expanded benefits for millions of veterans disabled by military burn pits and other toxic exposures dating back to the Vietnam War. Since the law was signed last August, 560,000 claims have been filed under the act, and there could be up to a million more. Many of these claims are coming from Texas vets through the VA's Waco and Houston offices, which are today experiencing some of the most severe claims backlogs in America.

While civilians may assume that military service automatically confers access to government care and benefits, most veterans must navigate a series of highly specific and constantly evolving statutes that dictate who is eligible for assistance and how to demonstrate eligibility. To get benefits, most veterans need to file a disability claim and secure a disability rating -- a number from zero to 100. The higher the number, the more care and compensation a veteran receives. Paul Sullivan, a Gulf War veteran and veteran advocate in Rockville, Maryland, described this system as an "adversarial, complex, and burdensome claims nightmare."

Traditionally, the VA accredited three types of claims representatives: agents, lawyers and veteran service organizations like the Veterans of Foreign Wars and the American Legion. The lawyers and agents charge fees on a tightly regulated scale. The service organizations provide their services for free, as does the Texas Veterans Commission, which also employs accredited agents.

As the veteran population ages and shrinks, so too are the organizations that have traditionally watched out for vets. While veterans' groups had nearly 10,000 accredited claims agents five years ago, today there are just over 6,500.

The VA Office of General Counsel trains, tests and regulates the agents. Accredited claims agents undergo background checks. Before charging for services, they must also submit detailed fee agreements to the government to be scrutinized and approved as fair.

With savvy online skills and big marketing budgets, unaccredited companies like VA Claims Insider have promised to help veterans from the sidelines -- while imposing rates far higher than what the accredited agents can charge.

Because Reese and his coaches are unaccredited, they face none of this scrutiny and are free to charge what they like. Reese calls VA Claims Insider an education company.

For decades, federal law penalized unaccredited actors who charged veterans for "preparing, presenting, or prosecuting claims before the VA." While regulations still prohibit such behavior, all criminal penalties were removed from federal statutes in 2006, leaving the VA essentially toothless to go after bad actors. (Accredited representatives, however, remain liable to be investigated and, if appropriate, disbarred when a veteran complains.)

Accredited representatives are flummoxed as to why veterans are seeking more expensive, unaccredited coaches like Reese rather than their free or far cheaper services.

Richard W. Rousseau, a retired Army colonel and an accredited veterans claims lawyer from Harker Heights, in Central Texas, was alarmed by VA Claims Insiders' contract language and fee structure. He calculated the company charges clients roughly $8,000 if their disability rating jumps by 10%. "My fee would be about $1,600," he said.

Reese himself secured free accredited claims assistance from AmVets, a veterans group. He has said he appreciates accredited agents and often refers veterans to their services. Yet in client seminars, he has broadly cast the accredited agent as someone who "doesn't care and hurts your rating." His company's contracts prohibit coaches from referring clients to accredited agents. In a recent TikTok video, Reese urged unhappy veterans to "fire" their free, accredited representatives. (Eller, the company spokesperson, said Reese "simply repeats what is well-known in the veteran community" -- that many accredited agents are "overworked, underpaid, undertrained, and underappreciated.")

Some veterans told the Tribune that they turned to Reese after accredited agents failed them. Others were happy to pay steep prices for help getting generous benefits. Ronald A. Conaway Jr., who lives in Tulsa, Oklahoma, said he used VA Claims Insider after facing delays with an accredited advocate at the Disabled American Veterans, a century-old, congressionally chartered veterans' group.

"My coach should have been more communicative and proactive," said Conaway, who reached out to the Tribune at Reese's encouragement, explaining that he'd sometimes have to email his coach at VA Claims Insider four times before getting a response. Conaway said he paid roughly $8,000 for about six hours of assistance, but was "ecstatic" that he'd secured a rating boost in just a few months. "If I had to do it again, I'd do it again," he said.

Troy Thompson of Woodland, California, another former client Reese referred to the Tribune, said he initially felt the company's $8,000 fee was "too much," but concluded it was worthwhile after seeing his rating jump from 70 to 100.

A third satisfied client, Bill Lonegran of Simi Valley, California, agreed: "The charge was a little high, but I'd been dealing with the VA for years. And they helped me."

Claims issues are especially acute in Texas. Data shows that nearly 6,000 Texas vets (or roughly 9%) of the 67,000 or so vets who sought help at state claim offices in 2020 went unseen -- meaning many likely sought assistance elsewhere.

While its exact number of clients in Texas is unclear, VA Claims Insider makes aggressive appeals to Texas veterans, including through email blasts, online advertisements and guidance mentioning Texas-specific veteran benefits, which include free college at state schools, property tax exemptions and home improvement loans. Other unaccredited claim companies have also zeroed in on Texas. One is Veterans Guardian, which lists 2,202 Texas clients, more than any state after North Carolina, where that company is based. It too has received government scrutiny.

Reese's website and written materials are dotted with disclaimers that neither he nor his company are replicating the services of accredited agents. And yet some believe that his coaches are illegally "preparing" a claim. In a document submitted to the Texas attorney general, a VA official wrote that Reese, in a 2017 video, "flatly admits" that, for the right price, "we do your entire disability claim for you." The video has since been taken down.

"We were logging in to their accounts and basically doing claims for them," one former coach who insisted on anonymity told the Tribune. Clients described the process in ways that raised similar red flags. In a complaint to the attorney general, a veteran from Tomball named Michael Warner said he did his claim step-by-step "as instructed" by his coach. He also said that his coach filed a separate claim form without his knowledge or consent.

Peckey and other clients have also complained that coaches with VA Claims Insider steered them away from claims involving physical ailments, favoring conditions like somatic symptom disorder, which is characterized by high anxiety or excessive worry over one's health. "They were fighting me, telling me what's wrong with me," Peckey told the Tribune. "The priority was being pushed on the most lucrative claim, not the pain I was feeling. Eventually I went with the flow."

Derick Jordan, a veteran from Wylie, told the attorney general's office that his coach "insisted" he tie his disability rating to mental health issues because it was "easiest to prove" and had "more value" -- for Jordan and for the company. "VA Claims Insider uses deceptive practices to take advantage of veterans to increase their bottom line," he explained in a handwritten complaint.

A current employee, who spoke on condition of anonymity, also said that Reese's business urges veterans to exaggerate mental health claims. "It's, 'Oh, you hurt your ankle, does that make you depressed and anxious?'"

Eller, the spokesperson, said, "Physical conditions are taken just as seriously as mental conditions."

At a U.S. House Veterans Affairs Committee hearing in April 2022, Richard J. Hipolit, the VA's deputy general counsel for veterans programs, suggested that unaccredited agents could be prosecuted by the Department for Justice for "producing evidence that was fraudulent, or whatever, in support of claims."

Building a Claims Empire

Reese, 39, built his brand around a narrative of struggle and redemption. He grew up in Pillager, a small town in central Minnesota, and helped win a hockey championship playing for the U.S. Air Force Academy. Upon graduation in 2007, he became a procurement officer and reached the rank of captain. "Basically, I bought stuff," he said in a podcast appearance. The work took him to Afghanistan in 2011, where he secured upgrades to prisons in the city of Kandahar that, according to a citation for his defense meritorious service medal, prevented a "Taliban jailbreak."

In a LinkedIn post, Reese wrote that he came down with post-traumatic stress disorder in Afghanistan following many sleepless nights marked by the booms of indirect rocket fire. The severe mental and physical pain, he says, led to alcohol and drug abuse, a gambling addiction, then divorce. "I was shattered and broken," he says on his website. "I was unwilling to be uncomfortably vulnerable, and therefore, didn't seek the proper help. But during this same season, God put it on my heart that I was created for a greater purpose: to give fellow veterans hope and help."

Reese left active duty in 2012 and moved to Texas in 2014. He served as a civilian contracting officer based at Randolph Air Force Base near San Antonio until 2018.

VA Claims Insider, which he founded in 2017, has no physical headquarters. It is registered to an Austin P.O. box in a small shopping center. Texas gives special benefits to veteran-run businesses, waiving franchise taxes for five years, or up to $1 million. Reese and his wife, Laurel, own a riverfront home worth $2.2 million with a private boat dock that is similarly exempt from property taxes, thanks to a Texas law that grants such relief to veterans, like Reese, who are rated as 100% disabled.

In a webinar, Reese explained that his disability benefits had given him new "lifestyle options," like a Minnesota lake house and a new Ford truck. "I want this for you," he said. "I want you to get the tax-free compensation."

As his client list grew, Reese boosted online advertising and hired coaches, many of them disabled veterans he'd helped. He won praise from Texas news anchors and influencers like Marcus Luttrell, a retired Navy SEAL who wrote a bestseller, "Lone Survivor," about a deadly clash with Taliban fighters. He also started a website called Military Disability Made Easy, which charges $19.95 a month for video tutorials and other information.

Four former employees of VA Claims Insider, who insisted on anonymity because they feared being sued, said that as the company's popularity spiked, coaching quality degraded. Some coaches were saddled with up to 1,000 clients at a time. (Accredited claims agents generally have somewhere between 100 and 250 clients at a time.) "We could hardly keep up," said one former coach. "We weren't providing much service to our clients," another admitted. "I wondered how we could justify these high prices." Other former employees said unqualified coaches were brought on. "They were bringing in anybody they could hire, teaching them real quick and on the fly, then sending them out to the wolves," one said.

Unaccredited companies proliferated during the COVID-19 pandemic, which shuttered VFW and Legion posts around the country and exploded following the passage of the PACT Act. Sullivan, the veterans' advocate who served in the Gulf War, compiled a list of what he called six of the worst unaccredited "claim sharks." It included VA Claims Insider as well as another venture, Telemedica, which was formed by Reese's wife, Laurel.

Through Telemedica, her company connects veterans with clinical professionals who provide medical evaluations that can help strengthen a veteran's disability claim. Before Telemedica was founded in 2020, Reese was overseeing contractual relationships with clinical providers in which his company retained $120 out of every $395 evaluation fee, plus a $100 "one-time exam/records review fee."

VA Claims Insider and Telemedica, which share an address on business documents, are deeply intertwined, according to a dozen former employees. They said VA Claims Insider employees have conducted work for Telemedica and claimed coaches were directed to push clients to undertake evaluations from the company. "I wouldn't always recommend one," recalled one former coach. "They got upset about that."

In a complaint to the attorney general, Jordan, the veteran from Wylie, said he was pushed into spending nearly $400 on a Telemedica evaluation in which he was diagnosed with PTSD in just 15 minutes. Jordan claimed that his evaluation was "not accepted" by the government.

In another complaint to the attorney general's office, Warner, the veteran from Tomball, said the VA deemed his evaluation from Telemedica "useless."

In a third complaint, Florida resident Amy Anderson told the attorney general's office that her partner undertook an evaluation that was a "detriment to his claims due to how many fraudulent claims are submitted by this 'medical team.'"

The 2020 risk analysis warned about VA Claims Insider's involvement in medical evaluations, noting that "any time a consulting service advertises referrals to medical professionals, the government will take notice" but said the company "possesses valid arguments to address any kickback investigation that may occur."

Eller said VA Claims Insider "does not pressure any veteran client or coach to utilize services through Telemedica, LLC. Period." He claimed the two companies were totally separate and said anti-kickback statute doesn't apply to Telemedica, as "neither VA Claims Insider nor Brian Reese has ever received a penny for making referrals to Telemedica."

Mounting Scrutiny

When a VA Claims Insider client threatened in 2018 to go to the Texas attorney general with concerns, Reese contacted the attorney general's office for guidance, according to records obtained through a public records request.

Texas' consumer protection laws are considered to be among the weakest in the country, in large part because only the state's attorney general can seek damages for deceptive practices. In other states, consumers can themselves seek legal redress for dubious business practices.

The attorney general's office has been under strain. In May, the Texas House impeached Attorney General Ken Paxton on charges that include bribery, abuse of office, dereliction of duty and obstruction of justice. He has been suspended without pay and awaits trial by the Texas Senate.

After consulting Paxton's office, Reese posted a video on Facebook in which he said that a few "haters" had posted "fake reviews" and other "misinformation" about his company. Reese asserted that he had spoken with lawyers in the attorney general's office to "make sure that everything we're doing is above board."

It wasn't only customers who sounded alarms. According to arbitration documents, Reese fired a contractor who he feared was going to cooperate with a potential investigation and therefore posed a "security risk." Eller brushed off the claim as that of a "disgruntled former contractor."

Reese has also encountered growing government scrutiny. In response, VA Claims Insider has paid $280,000 to Ogilvy Government Relations for lobbying on "issues related to veterans' benefits, including legislative proposals."

They may have found an ally in U.S. Sen. Ted Cruz, R-Texas, who introduced a bill in 2021 that would provide a three-year pilot contract to an unnamed company that provides consulting services "to assess and advise claimants based upon a review of each claimant's specific circumstances" -- a description that fits VA Claims Insider.

Cruz's staff didn't explain why the bill was introduced. Eller said that Reese had met with Cruz staffers, but only to discuss new disability coverage secured through the PACT Act.

At the hearing in April 2022, U.S. Rep. Jake Ellzey, a Waxahachie Republican and a Navy veteran, and other lawmakers invited major for-profit claims companies, including VA Claims Insider, to answer questions about their business practices. Reese did not show up because he was out of the country on vacation.

In his testimony, Ryan M. Gallucci, an Iraq veteran who at the time oversaw 1,900 accredited claims representatives at the Veterans of Foreign Wars, said leaders of the unaccredited groups in attendance "should be met at the door by Capitol police, not offered a seat at the same table as hardworking VA accredited advocates who are held to professional and ethical standards designed to protect veterans."

Ellzey, a former Texas Veterans Commission official, and other House members have introduced the Governing Unaccredited Representatives Defrauding (GUARD) VA Benefits Act, legislation that would reinstate federal penalties for nonaccredited actors.

"I don't think anybody should make any money off of a veteran and the disability that they receive," Ellzey says.

Jasper Craven, an independent investigative reporter covering military and veterans' issues for outlets including The New York Times Magazine, the Intercept, the Atlantic and the New Republic, is a co-author of "Our Veterans: Winners, Losers, Friends, and Enemies on the New Terrain of Veterans Affairs." This year he was a finalist for a Livingston Award for national reporting for an investigation he wrote for Mother Jones.

Disclosure: Jeff Eller, a former Texas Tribune board member, and the Texas Veterans Commission have been financial supporters of the Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.