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Friday, May 2, 2025
Feds Bust Honolulu Massage School Owner in $9.1M VA Scam
By News Release @ 4:26 PM :: 1044 Views :: National News, Ethics

Three Individuals Charged in Scheme to Defraud Department of Veterans Affairs of Over $9.1M

News Release from U.S. Attorney's Office, District of Hawaii, Friday, May 2, 2025

HONOLULU – Three men were charged with participating in a scheme to defraud the U.S. Department of Veterans Affairs (VA) of over $9.1 million in education benefits, including funds from the Post 9/11 GI Bill education benefit program. One of the men has pleaded guilty for his role in the scheme.

According to court documents, Brian Matsudo, 58, of Honolulu, Hawaii, Marshall Scott, 39, of Kapolei, Hawaii, and Raheem Wells, 37, of Indianapolis, Indiana, conspired to defraud the VA. Matsudo was the owner of a massage therapy training school in Honolulu, Hawaii. From approximately November 2016 to November 2022, Matsudo conspired with Scott and others to obtain tuition assistance payments from the VA by intentionally failing to disclose that Matsudo’s massage training school was not in compliance with applicable VA rules and regulations.

(CLUE: "Elite Massage Academy, LLC")

As alleged in the indictment, Scott began working for the massage training school owned by Matsudo in or about November 2016. As part of the conspiracy, Scott submitted enrollment certification forms to the VA on behalf of at least 40 military veterans supposedly enrolled at the massage training school. Scott knew that these forms contained false enrollment information and falsely certified that the school had complied with applicable rules and regulations. Wells was a student at the massage training school in 2020 and 2021. From about May 2020 to November 2022, Wells and Scott recruited “students” who allowed the school to lie to the VA by falsely representing that they were actually enrolled in courses.

Both Scott and Wells allegedly profited from the scheme. Matsudo paid Scott for each person that he and Wells had recruited with the proceeds of the tuition payments made by the VA. Wells received monthly payments from the individuals he recruited to participate in the scheme.

In April 2025, Matsudo pleaded guilty an Information charging to one count of conspiracy to commit wire fraud and faces a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

In April 2025, Scott and Wells were both charged in an Indictment with one count of conspiracy to commit wire fraud and three counts of wire fraud. If convicted, they face a maximum penalty of 20 years in prison on each count. Wells was also charged with obstruction of justice for instructing a witness to lie to federal law enforcement agents. If convicted, he faces a maximum penalty of 20 years in prison.

Matthew R. Galeotti, Head of the Justice Department’s Criminal Division; 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 (VA OIG); and Special Agent in Charge David Porter of the FBI Honolulu Field Office made the announcement.

The VA OIG and FBI are investigating the cases.

Trial Attorney Ariel Glasner of the Criminal Division’s Fraud Section is prosecuting the case against Matsudo, with substantial assistance from Trial Attorney Jennifer Bilinkas of the Criminal Division’s Fraud Section. Trial Attorney Glasner and Assistant U.S. Attorney Craig Nolan for the District of Hawaii are prosecuting the case against Scott and Wells.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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KITV: Three men accused of stealing over $9 million from Veterans Affairs program | Crime & Courts | kitv.com

SA: Trio of men face federal charges for defrauding veterans agency | Honolulu Star-Advertiser

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