It is not immediately clear whether any of the soldiers are from Fort Gordon or the National Guard’s offices in Augusta and Graniteville; however, Army records show that 23 recruiters and 64 assistants from Georgia and South Carolina are under review or have been investigated for their involvement in the illicit operation.
“What we’re seeing here today is one of the largest criminal investigations in the history of the Army, both by the sheer scale and scope of the fraud,” said U.S. Sen. Claire McCaskill, the chairwoman of the Subcommittee on Financial and Contracting Oversight.
McCaskill’s subcommittee and Army investigators revealed this week that pervasive fraud in the Army National Guard’s Recruiting Assistance Program likely led to more than $50 million in fraud, with the worst case scenario of secretly pocketed bonuses up to $100 million.
The program, which was established in 2005 to help achieve recruiting goals, was designed to provide incentives to National Guard members, retirees and civilians as informal recruiters.
They would tell their peers about the advantages of joining the National Guard, refer them to an Army recruiter, and if the person signed up, the referral source – or “recruiting assistant” – got a payment between $2,000 and $7,500.
In one way, the program worked. The National Guard paid more than $300 million for more than 130,000 enlistments, and began meeting its recruiting goals. But by 2007, the program leader reported about a dozen cases of potential fraud to the Army’s Criminal Investigative Command. After investigating and confirming several individual cases of fraud, the command requested a program-wide audit by the Army Audit Agency in 2011. Auditors later found that the fraud was so significant that more than 1,200 recruiters and 2,000 recruiter assistants had received payments that might be fraudulent.
Army documents show the top five recipients of fraudulent money all were paid more than $100,000.
The top recipient, who received $274,500, is being prosecuted. The third-highest recipient, who received $208,500, pleaded guilty. And more than 200 officers, including several generals and colonels, are under investigation.
“No one is more outraged about this than the leadership of the United States Army,” spokesman Lt. Col. Don Peters said in a statement. “After internal Army investigations identified instances of fraud in Recruiting Assistance Programs, the Secretary of the Army immediately terminated those programs and their funding in February 2012.”
Army investigators have said they’ve begun a two-year review of all 106,364 individuals who received money from the program worldwide.
According to Army investigative reports, pressure from senior leaders in the National Guard Bureau to meet recruiting goals created a culture for the fraudulent activity.
Although some officers voiced concerns about meeting recruiting standards, Army leadership did not share those concerns.
“The complete lack of controls and safeguards on this program created a culture of permissibility where it didn’t take much for thousands of people to figure out that fraud would be easy,” McCaskill said.
As of January, ongoing reviews have resulted in a total of 559 criminal investigations involving 1,219 people, with 104 prosecuted through the courts or through administrative action by the Army.
Under prosecutions by the Department of Justice, at least one former member of the National Guard has been sentenced to serve 4 years, nine months in jail, with others sentenced to varying terms.
Prosecution of the cases has been limited by the five-year statute of limitations for some fraud cases. To date, individuals have been ordered to pay the government $936,683 in restitution.