White Supremacist Pleads Guilty to Pension Fraud

Statement he made in 2005 would ultimately seal his fate

Lexington Patch/August 24, 2011

By Hal Millard

White supremacist leader August Byron Kreis, a former Lexington resident, pleaded guilty on Monday to defrauding the federal Veteran's Administration, says U.S. Attorney Bill Nettles.

At first glance, Kreis' crime would seem rather innocuous. According to Nettles, the former Vietnam naval vet falsified his income to the VA in order to receive maximum pension benefits.

Kreis, 56, was able to bilk the VA for some years and he likely could have continued to do so; however, the man that the New York Daily News once dubbed "King of Boneheads," would unwittingly set in motion an investigation that would prove to be his undoing. All it took was one ill-conceived statement.

Unfortunately for Kreis, he made that statement on national television.

But first, some background on Kreis from the U.S. Attorney's office:

Facts presented during the guilty plea and at an earlier bond hearing established that Kreis was receiving an "Improved Pension" as a result of his nine-month service in the United States Navy, according to Nettles.

Despite his brief service and discharge, based on a determination that he was not suited for military service, Kreis qualified for the pension because he served during war time, said Nettles. The Improved Pension is based on need, and all recipients are required to report all income from any source. The VA then reduces pension benefits on a dollar-for-dollar basis for any qualifying income. It also uses reported income to determine continued eligibility, according to Nettles.

But Kreis, noted for his leadership position in the neo-Nazi group, Aryan Nations, and his belief that the events of Sept. 11 were perpetrated by the United States, was sought out by CNN sought for comment in 2005 on the 10th anniversary of the Oklahoma City bombing.

"During an interview that was broadcast on national television, Kreis stated that he and members of his movement desired to join Al-Qaida in its Jihad against the United States government," says Nettles.

And in the era of the USA Patriot Act, such statements earn immediate scrutiny.

After that statement, federal law enforcement ofricials began investigating whether Kreis was acting on such statements or providing support to Al-Qaida, Nettles said.

Financial records from Kreis’ bank accounts were obtained and analyzed. While they did not show support for the enemy, they did reveal that he had substantial unreported funds going into his bank accounts.

During 2005, for example, Kreis received approximately $33,669 from sources other than the VA, and he failed to report any of the money, said Nettles. In an eligibility report that he submitted to the VA on Aug. 29, 2006, Kreis stated that during 2005, he had no income from any source.

"This false report formed the basis for the crime to which Kreis pleaded guilty," Nettles said.

Kreis now faces a maximum penalty of five years imprisonment and a $250,000 fine, Nettles said.

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