The amount of taxpayer dollars lost in one of the biggest fraud investigations in U.S. Army history may be more than double the original estimate-possibly up to $100 million-a revelation exposed in a Senate hearing led today by U.S. Senator Claire McCaskill.
McCaskill’s subcommittee and Army investigators revealed pervasive fraud and potential waste in the Army National Guard’s Recruiting Assistance Program (RAP). The program paid National Guard members, retirees, and civilians to recruit friends and family, but had virtually no safeguards or controls-leading to criminal fraud on a massive scale. The program was established at the height of the Iraq war in 2005 to help the Guard achieve its recruiting goals, and was later expanded to the Army Reserve and Regular Army.
The hearing today revealed that the RAP program likely led to more than $50 million in fraud, with the worst case of up to $100 million in fraud.
“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 Senator McCaskill, a former Missouri State Auditor and the Chairman of the Subcommittee on Financial & Contracting Oversight. “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. One of my biggest concerns is holding people accountable, and it breaks my heart to discover that there are criminals who have dishonored the uniform that we are all so proud of. We cannot allow this program to become a stain on the thousands of recruiters and Guard members who serve honorably. I intend to ensure the Army is taking every available measure to hold these criminals accountable quickly-so that people can’t beat their charges using the statute of limitations-and restores integrity and accountability in the Army’s recruiting and contracting process.”
Army investigators who testified today also agreed with McCaskill about the scope of the fraud involved.
“People knew this was going on,” McCaskill said, inquiring about reports that some high school guidance counselors participated in the fraud. “There’s no way they didn’t.”
“Yes, ma’am, that’s true,” agreed Major General David Quantock, commander of the Army’s Criminal Investigative Command (CID).
Since the first cases of fraud were reported to the CID, the RAP fraud cases have become one of the largest criminal investigations that CID has ever conducted. Approximately 200 CID agents, including 60 devoted full-time to RAP cases, have begun a review of all 106,364 individuals who received money from RAP. CID estimates that its investigations will continue until 2016. The top five recipients of fraudulent RAP money were all paid over $100,000. The top recipient, who received $274,500, is currently being prosecuted. The third highest recipient, who received $208,500 in RAP payments, pleaded guilty. The fraud was not limited to enlisted soldiers-more than 200 officers (including several Generals and Colonels) are currently under investigation.
As of January 2014, CID’s ongoing reviews have resulted in a total of 559 criminal investigations involving 1,219 individuals. 104 of these individuals have been held accountable through either 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 and 9 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.
McCaskill also focused in the hearing on how the Army can continue its efforts to identify and hold wrongdoers accountable, as well as improve contracting and recruiting controls and oversight.