Hawaii welfare cheat gets 57 months in federal prison

Vaughn Sherwood (courtesy of Hawaii News Now)
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Vaughn Sherwood (courtesy of Hawaii News Now)
Vaughn Sherwood

BY MALIA ZIMMERMAN – HONOLULU – Vaughn G. Sherwood apologized in U.S. District Court Wednesday during his sentencing hearing, admitting to a 14-year crime spree in which he stole some $200,000 from city, state and federal taxpayers.

Using eight names, nine Social Security numbers and six dates of birth to create a variety of identities, Sherwood told U.S. District Judge Leslie Kobayashi that he took welfare cash, food stamps, student tuition assistance, public housing subsidies and Medicaid.


Though Sherwood claimed he was eager to get out of prison so he could get a job and repay the government, Kobayashi sentenced him to 57 months in prison, 3 years of supervised release and restitution totaling $213,146.56.

Of the money he must repay, $46,264 is owed to the U.S. Department of Education; $52,663 to the state of Hawaii; $106,163 to the City & County of Honolulu and another $8,056.56 to United Health Care.

“He was a prolific identity thief and the taxpayers were footing the bill for his lifestyle,” said FBI Special Agent Tom Simon, who investigated the Sherwood case. Court records show Sherwood used the names of Kevin Patrick Halverson, Vaughn Sherwood and Kevin Halverson to perpetuate his theft.

Dressed in a white prison jump suit and shacked on his hands and feet, Sherwood, 67, looked as if he had not shaved or cut his hair since his arrest, and his bushy brown hair and full beard fell well over his shoulders.

Assistant U.S. Attorney Ron Johnson noted Sherwood wasn’t impoverished – he had inherited a sizeable sum, $360,000, from his deceased parents, and also owned a sailboat and a Yamaha Jetboat, along with a Mercedes Benz S420 automobile.

However, instead of using his inheritance to support himself, or finding employment, Sherwood admitted he filed fraudulent paperwork with the state claiming to be homeless, and as a result, secured welfare cash and food stamps for 9 years from the state Department of Human Services. Sherwood obtained $6,500 in welfare cash payments, $5,800 in food stamps and $24,000 in medical benefits. He also secured $109,000 in Section 8 housing assistance over a 14-year period from the City & County of Honolulu.

Sherwood did opt to further his education, but that too was courtesy of the taxpayers. Both Sherwood’s under graduate and master’s degree tuition at the three University of Hawaii campuses were paid for by federal student tuition assistance, court records show.

The fraud didn’t stop there. Getting even more creative, Sherwood used a false identity and claimed to have heart failure. He then simultaneously applied in 2009 with the state Department of Human Services to be his own caregiver, and received $8,000 as a result from Medicaid, court records show, to care for himself.

“Keeping a dozen identities alive is a staggering amount of work. One has to wonder why he didn’t just put that energy into a legitimate job,” Simon said.

Sherwood was caught only after the state Department of Human Services Investigations division discovered his welfare fraud dating back to 1999. The agency subsequently teamed up with FBI’s Simon to investigate the full scope of his fraud, ultimately leading to Sherwood’s arrest on Oct. 18, 2013, on “theft of government property” charges.

In the process of searching his Waikiki condominium, FBI agents recovered two rifles and four handguns that agents said Sherwood was not permitted to possess because of previous convictions including felony assault convictions and possession of narcotic equipment. Court records show Sherwood has three DUI convictions and another for contempt of court. As a result, Sherwood was also charged with being a felon in possession of a firearm.

Under federal law, Sherwood could have faced 10 years in federal prison for theft and another 10 years in federal prison for firearms violations.

Though the crime spree is over, Sherwood won’t be off the taxpayers’ dime yet. He will spend 57 months in federal prison, and receive extensive medical care while he is there for a failing heart.