States Target Trajector Medical in VA Mortgage Scandal Probe

New York and Illinois officials have announced ongoing investigations into Trajector Medical, a Florida-based firm accused of bilking disabled veterans out of millions of dollars. Attorneys general in both states stated they intend to file legal action against the company and its parent entity, Trajector Holdings LLC, alleging fraudulent, illegal, and deceptive business practices.

The move follows an NPR investigation that revealed how Trajector generates significant revenue by charging veterans for assistance with initial disability claims, a service federal law mandates must be provided free of charge by accredited representatives. In response to the reporting, civil class-action lawsuits were filed on behalf of affected veterans. However, Trajector subsequently filed for Chapter 11 bankruptcy protection, which automatically stayed those proceedings.

In a Sept. 8 letter to the U.S. Bankruptcy Court in the Middle District of Florida, state officials argued that funds held by the company may have been obtained through illegality. “It is expected that the investigations will reveal that money being held by the company in the bankruptcy process was collected through illegality and fraud,” the letter read. Trajector has denied these allegations, with spokesman Steve Zenofsky telling NPR, “We stand behind how we operate, and we’re focused on the veterans we serve.”

A central focus of the probe is Trajector’s use of an automated dialing system dubbed “CallBot.” According to NPR’s findings, the system logs into VA benefits hotlines using veterans’ Social Security numbers to monitor changes in benefit payments. If the bot detects an increase in compensation, it triggers a bill to the veteran, even if Trajector did not provide any services that led to the raise. The state attorneys general are also examining whether the company improperly utilizes personal data gathered through these automated calls.

Court documents show that Trajector Medical and 21 affiliated entities filed for bankruptcy protection just five days before a default on nearly $63 million in loans owed to Deutsche Bank. The filings list combined assets of approximately $405 million and reported combined income of nearly $280 million in 2025. The company employs more than 450 staff members and operates both VA claims services and a Social Security claims preparation business.

Bankruptcy trustee filings also brought attention to CEO Jim Hill’s personal financial activities prior to the filing. Property records indicate that Hill and his wife purchased a $5.75 million oceanfront residence in Saint Augustine, Florida, in September 2025. While Trajector listed the six-bedroom home as its principal office, it was not listed as a company asset. Zenofsky dismissed the connection between the purchase and the bankruptcy, stating the two were unrelated.

Jennifer Byrd, an attorney representing one of the class-action suits, praised the states’ intervention. “The bankruptcy court can’t stop them, they can move forward and keep investigating,” Byrd said. However, legal experts warn that this may not guarantee reimbursement for veterans. Bruce Markell, a former bankruptcy judge and professor at Northwestern University Pritzker School of Law, noted that corporate bankruptcy law offers no special precedence for fraud victims, meaning veterans may be treated as standard unsecured creditors.

Trajector has attributed its financial distress to a tightening regulatory environment. Since 2024, the company has suspended operations in 23 states where new laws restrict unaccredited claim assistance. Revenue in the first half of 2026 dropped by approximately 60% compared to the prior year, a decline the company linked directly to these legal changes.

The roots of the current regulatory clash trace back to 2006, when Congress eliminated federal criminal penalties for charging veterans for initial claims but left the accreditation requirement in place. This created a loophole that companies like Trajector have exploited. Recent legislative efforts to either reinstate penalties or legitimize the industry with fee caps remain deadlocked in Congress.

Internal conflicts also contributed to the bankruptcy. Court filings reveal a dispute between Hill and co-founder Gina Uribe regarding the management of a $75 million loan taken out in 2021. Financial disclosures show Hill receives a base salary of $600,000 plus potential quarterly bonuses of the same amount, while Uribe earns $197,000 annually with no bonuses. The impasse led to litigation between the two owners in May 2026.

For veterans like Dustin Ingram, a former Army Ranger, the bankruptcy revelations confirm suspicions of exploitation. Ingram stated that Trajector accessed VA databases to target him and attempted to collect a $4,500 fee despite providing minimal assistance. “I think that they took advantage of me,” Ingram said, refusing to pay the bill. As investigations continue, hundreds of millions in disputed funds remain frozen in the bankruptcy process.