On February 4, 2014, military officials informed the Senate that US Army recruitment fraud has resulted in an estimated $29 million loss, an amount that could increase by millions more as the inquiry continues. Hundreds of uniformed soldiers and civilians are under criminal investigation for a scheme that involved accepting fraudulent kickbacks from a National Guard recruitment effort.
Investigation Details
The US Army recruitment fraud conspiracy is proving to be widespread, according to officials, and the investigation may not be completed until 2016 because of the number of those involved and potential cases. However, they did reveal certain key details.
- The schemes involved as many as 200 military officers and at least two generals.
- Those being investigated are accused of participating in plots intended to take advantage of a referral program that would pay bonuses for hitting certain recruitment thresholds, with amounts that ranged from $2,000 to $7,500 per case.
- In response to Senate inquiry, two Army generals reported that the recruiting program was established in 2005 to boost low enlistment levels during a critical period of the war in Iraq.
- One of the largest cases was comprised of five individuals who split an estimated $1 million, according to Major General David E. Quantock, the leader of the Army’s Criminal Investigation and Correction Commands.
- Mag. Gen. Quantock also reported that the US Army recruitment fraud investigators were able to trace $29 million in bogus bonuses, and indicated that another $66 million may be announced.
- Army officials are investigating over 1,200 individuals, including both members of the military and civilians with military connections. At least 60 investigators have been delegated full time to the project.
The Scheme To Defraud
The Army National Guard established the Recruiting Assistance Program was established in 2005 as a means of increasing military enlistment intended to support the wars in Iraq and Afghanistan. In effect, the program featured cash bonuses to civilian recruiting specialists who were effective in turning around referrals. However, uniformed military members were banned from participating in the bonus program. The involved individuals developed a scheme to sidestep these rules and defraud the U.S. military.
- The investigation found that the prohibition on participation by uniformed soldiers was repeatedly breached without detection by various tactics over several years.
- Other cases involved civilian recruiting assistants who were persuaded to give kickbacks to the military recruiters.
- Some military recruiters were found to have registered the civilian recruiting specialists for the program without their knowledge. They would then provide their own banking details for deposits of the cash bonuses.
As a practical matter, the program was successful in boosting enlistment for the military: the Army National Guard was paid over $300 million for approximately 130,000 recruits. However, it was shuttered in 2012 when the first details of fraud began to surface.
Lt. Gen. Clyde A. Vaughn, former Army National Guard Director, defended the recruitment program but admitted there were flaws and potential for abuse leading to US Army Recruitment fraud. He stated he was unaware of the widespread nature of the scheme to defraud.
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