Picture a 1961 Rolls-Royce Phantom V with its front end smashed in, unable to run, sitting at a farm shop where a tow truck left it. Then picture that car listed on a nursing-home benefits application as a $194,000 family vehicle. A federal judge in Iowa didn’t find it convincing either.
Timothy Mark Anderson, 67, of Garner, Iowa, was sentenced September 11 to six months in federal prison. He had pleaded guilty on October 30, 2025, to one count of making a false statement relating to a health care matter. Judge Leonard T. Strand also fined him $25,000, ordered $184,274.36 in restitution to Iowa Medicaid, and imposed two years of supervised release.
The loophole he used
The whole scheme hangs on one very generous Medicaid rule. Under the federal SSI rule that Medicaid resource tests follow, one automobile is excluded completely, regardless of value, if it’s used to transport the applicant or a household member. Iowa Medicaid applies the same exclusion when it evaluates an applicant’s resources.
That makes a car a convenient place to park money. Normally, a nursing-home applicant has to spend savings down before Medicaid pays. Spend $186,000 on a car instead, and that money can no longer be counted.
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Anderson is a licensed Iowa attorney who offers financial, tax, and estate planning services, including help with Medicaid eligibility. He is also an avid collector of Rolls-Royce and other luxury vehicles.
How the shuffle worked
From 2017 to 2022, according to prosecutors, it went like this:
- An elderly client “bought” one of Anderson’s Rolls-Royces or other luxury cars before applying for Medicaid.
- The client later “gifted” the car to their heirs.
- The heirs “sold” it back to Anderson for less than the client had paid.
The buyers never drove the cars and, for the most part, never even saw them. In plain terms, the car never moved. Only the title and the money did.
The Phantom V deal
The case prosecutors described involved a Phantom V. In 2021, an elderly couple had more than $400,000 in assets, including a 2020 Chevrolet Equinox worth $30,000. The husband was already in a nursing home and paying for it himself.
The timeline is the giveaway:
- October 16, 2021: Anderson drove the Phantom V and crashed it. The front end was damaged, the car wouldn’t run, and it was towed to a farm shop.
- October 18, 2021: Anderson wrote a bill of sale transferring the car to the wife on this date, two days after the crash.
- October 2021: He deposited her $186,000 check into his personal savings account and signed the title over to her.
- November 4, 2021: He submitted documents to Iowa Medicaid listing the car’s fair market value as $194,000, a figure he knew was false.
Why would anyone claim a wrecked car was worth more than its purchase price? Because the value is what makes the scheme work. If a car is bought at fair market value, Medicaid doesn’t treat the purchase as giving money away; it’s just swapping cash for an equally valuable asset. The inflated number made a $186,000 check look like a sensible trade.
There’s also the Equinox. Social Security’s operations manual says that when a household has more than one car used for transportation, the exclusion goes to the one with the greatest equity value. With the Rolls listed at $194,000, the Rolls would take the exemption and only the modest Chevy would count. That’s my reading of how the rules interact; prosecutors didn’t explain it.
The judge called these luxury vehicle sales to elderly Medicaid applicants “obviously fraudulent and illegal.”
What a wrecked Phantom is actually worth
Anyone who has priced old coachbuilt cars knows a $194,000 valuation for a crashed one is fantasy. A 60-year-old hand-built body with front-end damage isn’t a job for a parts catalog. Fixing it usually means a specialist forming new metal, sourcing trim that may no longer exist, and waiting months. Collector values also depend on condition and originality, so a wreck with an unknown repair bill sells at a steep discount until the work is done. And a car that can’t run hardly fits a rule about providing transportation.
What this means for collectors and families
Medicaid looks back 60 months at asset transfers, a period state Medicaid manuals apply under federal law. In practice, that means a chain of title running from car owner to grandma to heirs and back to the owner leaves a paper trail investigators can follow.
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If a collector car is part of an elderly relative’s estate plan, keep it simple:
- Get an independent written appraisal.
- Make sure the car exists and runs. The exclusion is for a car used for transportation.
- Be wary of any advisor who is also the seller. A planner who offers to sell you his own car to fix your Medicaid problem has a conflict of interest you can see from the curb.
What’s next
Anderson remains free on bond until he reports to the Bureau of Prisons on a date not yet set. There is no parole in the federal system. The FBI investigated the case, case number 25-CR-3053. The release doesn’t say what happened to the Phantom V after it reached the farm shop.
What would you put on a crashed, non-running Phantom V? How far below $194,000 would you start?