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Saturday, October 24, 2015

Recruiting fraud, kickback scandal rocks Army

Soldiers received bonuses for persuading friends to sign up during Iraq, Afghanistan wars.

WASHINGTON — More than 800 soldiers are under criminal investigation for gaming a National Guard program that paid hundreds of millions in bonuses to soldiers who persuaded friends to sign up during the darkest years of the wars in Iraq and Afghanistan, USA TODAY has learned.

Fraudulent payments total in the “tens of millions”; one soldier allegedly pocketed $275,000 in illegal kickbacks, according to documents obtained by USA TODAY. At least four others made more than $100,000 each.

“This is discouraging and depressing,” Sen. Claire McCaskill, D-Mo., said in an interview. “Clearly, we’re talking about one of the largest criminal investigations in the history of the Army.”

McCaskill has scheduled a hearing Tuesday on the scandal before a panel she chairs on financial and contractor oversight. She has called top Army officials to testify. The Army declined to comment on the hearing or the investigations, said George Wright, an Army spokesman.

The Army National Guard launched the Recruiting Assistance Program in 2005 to bolster its ranks, which had thinned during the wars. It was later expanded to the the Army Reserve and active-duty Army. In essence, it paid soldiers for referrals of recruits. After audits turned up evidence of potential fraud, the program was canceled in 2012.

Soldiers serving as recruiters were barred from receiving payments, although there were few measures to prevent that from happening. Cash in payments of $2,000 to $7,500 were directly deposited into the participating soldier’s bank account.

An Army audit found that 1,200 recruiters had received payments that were potentially fraudulent, and another 2,000 recruiting assistants had received questionable payments. More than 200 officers remain under investigation, McCaskill said. As of January, there were 555 active investigations involving 840 people, she said.

In all, as many as 100,000 soldiers will have to be screened to determine whether they scammed the system, she said.

“Frankly, a halfway sophisticated high school student could have seen ability to commit fraud here,” McCaskill said.

McCaskill has also called on officials from Document and Packaging Broker Inc., the contractor that ran the program for the Army to testify. In 2007, the contractor told the Army about cases of potential fraud, congressional sources say.

The entire program, she said, may have broken federal law from the start. Congress limited the bonuses that could be paid for potential recruits, limits that were disregarded in this case.

“This is just a mess from top to bottom,” McCaskill said.

Source: Tom Vanden Brook, USA TODAY

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