Army aims to cut housing-allowance fraud
By JEREMY KIRK | STARS AND STRIPES Published: April 26, 2003
YONGSAN GARRISON, South Korea — Earlier this month, an Army major was charged with illegally skimming $38,000 in basic allowance for housing payments.
Prosecutors alleged the woman was collecting BAH for three children, two of whom were ineligible adults living in the United States and a third who was living with her in South Korea. She should have received no BAH.
The major argued that she didn’t know she couldn’t collect BAH for them.
A jury agreed she erred unintentionally and the major was cleared. She wrote a $38,000 check to the Army.
The case is one of many the Army investigates yearly, trying to stop soldiers from defrauding the service of sometimes thousands of dollars monthly. Some are innocent mistakes — a soldier incorrectly fills out paperwork, for instance — but others are purposeful schemes.
“The single issue in all of these cases is the intent to steal,” said Lt. Col. Rick Anderson, 8th Army deputy staff judge advocate.
In the last year in Area II, which includes Seoul and Yongsan Garrison, Army prosecutors investigated 30 cases of BAH fraud. Some still are under investigation. Of 13 cases, just two resulted in acquittals, Anderson said; larceny convictions were obtained in 11.
Soldiers are entitled to BAH if they come to Korea unaccompanied and have family members living in the United States. The amount depends on their rank and where their family lives.
Cities such as New York City or San Francisco have higher BAH rates because of more expensive housing markets. When soldiers come to Korea, they are required to fill out paperwork marking their eligibility for the allowance.
If they report that their family members live in New York City when they actually are in Fort Hood, Texas, it’s fraud. A staff sergeant with family members at Fort Hood would get $774 per month in BAH. If his family members lived in New York City, the figure would be $2,002.
The Army flags paperwork listing families in expensive housing areas. Criminal Investigation Command agents will investigate whether the family lives at the addresses given, Anderson said.
Sometimes a soldier may divorce a spouse in the States but fail to report the eligibility change to the finance office. That is considered a more passive form of fraud, Anderson said. Also, soldiers must report if family members join them in Korea.
Failure to do so could leave a soldier facing a larceny charge, which carries a maximum 10-year sentence, Anderson said.
In South Korea, 75 percent of the cases over the last year involved soldiers ranked specialist through sergeant 1st class; 25 percent comprised officers and warrant officers with ranks up to major, he said.
The Army first wants to recover the money, Anderson said. Secondly, it determines what to do with the soldier.
If a soldier is sentenced and dishonorably discharged, the case goes to automatic appeal, which can take from two to seven years. The other option is a Chapter 10 discharge, but an enlisted soldier must choose that option, Anderson said. Officers must resign their commission, he said.
“We make specific determinations [on each case] on what is the best way to reach the Army’s goals,” Anderson said.
No figures are available for how much the Army spends on BAH fraud cases yearly. But individual cases in Area II range from $3,000 to $40,000 each, Anderson said, and sentences have ranged from no confinement to nine years in prison.
“There is a price to be paid for stealing from the Army,” Anderson said.