Pentagon probes massive recruiting fraud

fraudWhen a retired Army colonel and an enlisted soldier from Albuquerque, N.M. were charged last year with defrauding the National Guard Bureau out of about $12,000 the case drew little public attention. But it’s now become clear that the two men are among the roughly 800 soldiers accused of bilking American taxpayers out of tens of millions of dollars in what a U.S. senator is calling “one of the biggest fraud investigations in Army history.”

The wide-ranging criminal probe centers around an Army recruiting program that had been designed to help the Pentagon find new soldiers during some of the bloodiest days of the Iraq and Afghanistan wars. The program went off the rails, investigators believe, after hundreds of soldiers engaged in a kickback scheme that allowed them to potentially embezzle huge quantities of money without anyone in the government noticing. In one case, a single soldier may have collected as much as $275,000 for making “referrals” to help the Army meet its recruiting goals, according to USA Today, which first reported the story Monday.

The military’s failure to spot, or stop, the wrongdoing will be the focus of what is expected to be a highly contentious hearing Tuesday before the Senate’s Subcommittee on Financial and Contracting Oversight. The committee’s chairwoman, Sen. Claire McCaskill, D-Mo., has summoned several of the National Guard officials who were in power at the time the alleged wrongdoing was taking place.

The numbers of soldiers and money involved are staggering.

An Army internal audit has discovered that 1,200 recruiters had received payments that were potentially fraudulent. Another 2,000 recruiting assistants had received payments that were suspicious. More than 200 officers remain under investigation, according to McCaskill’s office. There are currently 555 active investigations involving 840 people.

Trouble in the recruiting program has been acknowledged previously, but the full scope and the results of the service’s own internal investigation of the program have not previously been disclosed. In the past, Army officials overseeing the program and a contractor who worked with the service on it, Docupak, insisted that accounts of potential fraud in it were greatly exaggerated, congressional officials said in a memo distributed to the media Monday. About 200 agents with the service’s Criminal Investigative Command are now examining the program’s records, and will review the actions of more than 106,000 people who received money through the program. That work will likely take until 2016, officials said.

A Defense Department official acknowledged that a lack of proper military oversight contributed to the problems.

“I think it was human greed, and I think it’s the cascading effects of contractors’ lack of supervision, as well as the Defense Department’s lack of supervision,” the official told Foreign Policy, speaking on condition of anonymity because of the sensitive nature of the probe.

Source: Foreign Policy