Guilty Plea in 9/11 Fraud

SAN DIEGO —  A 53-year-old unemployed man has pleaded guilty to two counts of fraud for bilking charities out of $135,500 by falsely claiming that his wife was killed in the terrorist attacks on the World Trade Center.

Terry James Smith is in federal prison in downtown San Diego awaiting sentencing April 7 by U.S. District Judge Napoleon Jones. Smith faces a maximum of 10 years in prison and a $500,000 fine.

“The defendant is paying a just price for having committed a despicable, opportunistic crime,” U.S. Atty. Carol Lam said Friday after Smith pleaded guilty.

No pre-sentencing agreement has been made with Smith, prosecutors said.

In determining the sentence, Jones will also consider evidence that Smith bilked the Department of Veterans Affairs out of $19,034 for injuries he claimed he suffered during Army service in Vietnam.

Discharged from the service after six months because of stuttering, Smith had appealed to the VA for benefits, saying that exposure to Agent Orange had left him disabled. Although that bid was denied, Smith was awarded disability payments for other reasons.

When he reported -- in an effort to get greater payments from the VA -- that his number of dependents had increased to 10, investigators noted his claims arising from the Sept. 11, 2001, attacks, according to court documents. That led to a criminal case, which determined that previous VA claims had been fraudulent, officials said.

Smith pleaded guilty to bilking such charities as the American Red Cross, Safe Horizons and the Robin Hood Relief Fund by claiming that his wife was killed at the World Trade Center and that he was the sole support of their 10 children. Instead, investigators found that his wife was living in Jamaica after being deported in 1999, and that Smith had only one child to support.

When the investigation was launched, he was also seeking $215,000 from other funds established to help survivors of the terrorist attacks, said Asst. U.S. Atty. Steve Miller. The money already collected was spent on gambling in San Diego and Las Vegas, according to court documents.