WASHINGTON — The Army is conducting an investigation into large-scale fraud tied to an Army recruitment program, Sen. Claire McCaskill, the head of the Senate Subcommittee on Financial and Contracting Oversight, disclosed Monday, a day before she held a hearing on the scandal.
Investigators have found that $29 million in taxpayer money has been lost to fraud, but that number could increase to nearly $100 million by the time the probe is over, Maj. Gen. David Quantock, the Commanding General of U.S. Army Criminal Investigation Command, told lawmakers at the hearing Tuesday.
The Recruiting Assistance Program began in 2005 at a time when the Army National Guard was struggling to meet its recruitment goals as violence in Iraq escalated. The program was created to provide financial incentives to National Guard members not on active duty, retirees and other civilians to act as informal recruiters by encouraging family, friends and other acquaintances to join the National Guard.
These so-called “recruiting assistants” would refer potential enlistees to an Army recruiter, and if the person signed up, the recruiting assistant received a $2,000 to $7,500 reward. Similar programs were later adopted by the Army Reserve and the active duty Army to boost their recruitment numbers.
The program appeared to be effective. The Guard began meeting recruitment goals, and during the years that the RAP was in place, almost 40 percent of Army Guard recruits enlisted through the program.
However, it was later revealed that Army recruiters, recruiting assistants and other Army personnel were claiming to have recruited people that were already going to enlist or had already enlisted.
There were cases where school principals would supply personally identifiable information about their students who were enlisting, in order to claim false credit for recruiting them and collect the bonus, according to Quantock. Some recruiters were involved in kickback schemes where they would claim that a recruit who had enlisted was referred to them by a recruiting assistant; the recruiter would then split the bonus money with someone claiming to be the recruiting assistant.
The first indication that something was amiss came in 2007 when Docupak, the contractor administering the Guard program, reported about a dozen cases of potential fraud to the Army Criminal Investigative Division. It took four years for the Army to realize that the fraud was a widespread problem because a relatively small number of fraud cases were uncovered until 2010 when the number expanded, Quantock told lawmakers.
After the probe widened in 2011 and Army investigations discovered many instances of fraud, Secretary of the Army John McHugh in February 2012 terminated the programs, according to Army spokesman George Wright. McHugh also directed a comprehensive investigation by multiple Army investigative agencies to determine the scope of the problem and identify the people involved.
In 2011, Army investigators determined that more than 1,200 Army recruiters were suspected of fraud, as well as more than 2,000 recruiter assistants. All 106,364 individuals who received money from RAP will be investigated by the Army by the time the probe is finished in 2016, according to Lt. Gen. William Grisoli, the Director of the Army Staff.
“While these combined efforts are ongoing, the results have confirmed a substantial number of cases of fraud and program abuse. These cases will be handled through criminal, Uniform Code of Military Justice or administrative procedures as warranted,” Wright said in an email.
Some peopled reaped huge amounts of money from their fraudulent schemes. Five individuals illegally collected nearly $1 million combined, according to Quantock.
Thus far, 104 criminal cases have been adjudicated and 16 people have been imprisoned. No senior leaders have been jailed or lost any of their benefits, according to Quantock. One senior National Guard leader who fraudulently received $7,500 was not prosecuted because his case would have exceeded the statute of limitations by the time it would have gone to trial.
The Army will try to recoup as much taxpayer money as possible, Grisoli said.
Enlisted recruiters aren’t the only ones suspected of wrongdoing. More than 200 officers are under investigation, including two generals, dozens of colonels, and more than 100 junior officers, according to the subcommittee.
“We need to hold our senior leaders accountable; more accountable than anyone else,” Quantock said.