If you found out your Leader or Immediate Supervisor was doing something against the law, like fraud, what would you do?

I believe those who are involved in committing fruad should be held accountable and prosecuted regardless no excuses

Been my experience in the Army, and in life, unless your talking about serious crimes involving harm to others, your better off keeping your mouth shut and minding your own business. When you try to play the good guy, and the bad guy is connected, you often only end up screwing yourself in the end. Generally speaking in the military, your going to move on with your career, and have a different supervisor and leader. My advice would be document what you see, don't take part in it, and just move on with your life.

Report them.

I don’t know why this is even a question.
If someone takes a pen home, who cares!
Fraud or a Criminal offense. You report it!

I would surely let the appropriate authorities know. If not through the chain of command than through the appropriate LE agency like CID or OSI.

I was retaliated against, but in a way that I could not really fight against.

In Iraq, Bde level S6 shop, my LTC wanted me to run SIPR lines over the ground to an unsecured tent that was erected next to our building for IPLO teams. I refused to do this, and was pushed out of the shop and on to one of the IPLO teams. The E6 who took over for me did not bat an eye at this request and ran the lines. I went to the BDE XO, a COL who had been a previous Bn Cdr for a Sig Bn. She put a stop to it and had the lines removed.

At the end of the tour, the entire BDE HQ received Bronze Stars for being fobbits, and I received an ARCOM for driving daily down route Irish, through downtown Baghdad, and into the Karada District.

Write down what you saw happening, when it occurred, the contract number and the amount being paid out against the amount received for the contract. If the first higher up says "it's okay" and nothing happens. Go higher with evidence. That's bound to catch some ones eye.

Integrity means doing what's right whether or not you have to. Period.

Call the IG.

I would report that person immediately. Knowing about it and doing nothing makes you an accessory.