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Army Faces Biggest Fraud Investigation in History

Feb 7, 2014 | Fraud

The Army is facing one of the largest criminal investigations in the history of its existence. Currently more than 800 soldiers are under criminal investigation for gaming a National Guard program that paid hundreds of millions in bonuses to soldiers. A program that was originally started in 2005 to help bolster its recruiting ranks was shut down in 2012 after reports and audits turned up evidence of potential fraud. The total amount of the fraudulent payments is unknown, but can be estimated in the tens of millions.

The Army National Guard launched the Recruiting Assistance Program in 2005 and it served as a recruiting program for new recruits. The program paid soldiers, their relatives, and other civilians and retirees bonuses for persuading friends to sign up during the darkest years of the war in both Iraq and Afghanistan. Each of the recruiters could earn up to $7,500 for each new recruit they managed to enlist.

An Army audit found that 1,200 recruiters had received payments that were potentially fraudulent. In addition, approximately 2,000 other recruiters had received payments that were questionable. It has been alleged that one soldier has pocketed approximately $275,000 in illegal kickbacks, while at least four others have made more than $100,000 each. Some recruiting assistants eligible for bonuses were coerced into splitting them with military recruiters while other recruiters did not tell their civilian assistants about the bonuses. Instead, these recruiters would register the civilian assistants for the program and then substitute their own bank information for the assistants. This program paid out more than $300 million for 130,000 new recruits.

Currently there are more than 200 officers under investigation. That number started with approximately 840 people under investigation and has been narrowed down significantly. The investigation doesn’t stop there – in total, as many as 100,000 soldiers will have to be screened to determine if they have scammed the system. The investigation could continue until 2016 because of the large scale of the fraud. As a result, some of the soldiers may avoid being charged because of the statute of limitations.

Source: The New York Times, Fraud in Army Recruiting Bonus Program May Cost Nearly $100 Million, Helene Cooper, 1/4/2014


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