Fraud investigation targets recruiting program for Army National Guard, Reserve

A recruitment campaign to boost the Army National Guard and Reserve at a difficult time in Iraq and Afghanistan is the focus of a wide-ranging Pentagon fraud investigation, including allegations of kickback schemes involving military personnel, internal documents show.

The alleged fraud involves programs that paid $2,000 bounties to soldiers or civilians who signed up as “recruiting assistants” and brought in new enlistees. Investigators have found evidence that recruiters for the Guard and Reserve who were not eligible for the bounties worked with some recruiting assistants to secretly secure and split up the money.

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More than 1,700 recruiters and hundreds of recruiting assistants are under scrutiny for $92 million in potentially fraudulent transactions — more than a quarter of all the bounty money paid, according to an internal Army Audit Agency document. Investigators have found that dozens of the recruiters apparently shared bank accounts with individuals who received bounties.

Faced with a report on the abuses, Army Secretary John McHugh canceled the programs and ordered a probe of “systemic weaknesses and shortfalls, some of a potentially criminal nature,” according to an internal memo signed by McHugh on Feb. 9.

In response to questions from The Washington Post, an Army spokesman said the investigation is ongoing.

“If additional allegations of criminal conduct are found, the Army will take appropriate action,” spokesman George Wright said. “Because of the sensitivity of the criminal investigation, providing any further details or comment would be inappropriate.”

The Recruiting Assistance Programs, launched in 2005, were billed as an innovative way to supplement active-duty units strained by the demands of the two wars. At the time, tens of thousands of servicemen and women were required to serve extended tours of duty because of the shortfall of troops to relieve them.

The campaign offered bounties of up to $2,000 per recruit to soldiers or civilians who referred enlistees to the Guard or Reserve. Pentagon investigators started hearing allegations that some recruiters for the Guard and Reserve were taking advantage of the program. Over the past several years, investigators have opened at least 17 criminal cases and have called for a broader audit.

A subsequent Army Audit Agency investigation showed that more than a quarter of the $339 million in bounties paid over the past six years “were at risk for fraud,” according to an audit briefing given to McHugh on Feb. 2.

The transactions involved at least 1,706 recruiters and hundreds of the recruiting assistants — individuals who allegedly made the referrals and applied for the bounties. The alleged schemes involved the sharing of bank accounts between recruiters and recruiting assistants, who sometimes took credit for referring individuals who had already decided to enlist. In one case, dozens of recruiters and recruiting assistants shared a single bank account.

“Recruiters potentially stole the identity of personnel to circumvent controls or many have colluded with recruiting assistants to bypass controls,” auditors told McHugh.