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

I have had this situation. A motor SGT was stealing, using and selling expendable supplies. P.O.L, paint mogas etc.
This was brought to my attention by a few of his mechanics. It was a difficult decision to make. I decided to set a meeting with a Chaplain. They have autonomy, resources and connections. At this point I stepped aside. The issue was handled very professionally. The Motor SGT was investigated by CID and arrested.

Integrity. Do the right thing.

Yes, I’ve seen shady deals made by all levels. I always believed that if it were done to the benefit of the unit, it weren’t a shady deal, just an alternate sourcing task. If it was a personal shady deal just for their benefit, one warning and then drop a dice if the behavior doesn’t change.

Actually happened to me back in the early 1980's. I was the NCOIC of a clinic on the east coast and we were preparing for the inaugural joint commission on hospitals. This required a thorough review of all documentation, case notes, forms, calendars and manpower documents. While matching up schedules, I started noticing entries in the Psychiatrist (Col) log book that were outside referrals from a former employee for insurance purposes. Basically, he was taking on pay patients during duty hours in a military facility. Once I was able to uncover about a year of entries. I contacted our senior captain and explained what I found. We turned this over to CID and a few months later we learned of his punishment. He was taken off the promotion list (#1), received a GO letter of reprimand and was given a retirement date.

I'd turn their ass in.

Pass it on to CID.

Call the IG Hotline. You are protected by whistleblower laws. However, make sure that what your leader is committing is really fraud, and that your boss is not invoking an exception based on JAG's advice.

you must report it period. You may confront the individual and give them the opportunity to turn themselves in depending on the situation. But the military is totally dependent on honor and integrity so we can not accommodate untrustworthy individuals of any rank or position. Leave that crap to the politicians.

Must be reported asap. I would not confront your supervisor. Be sure you have evidence and facts.
Report to JAG, whistle blowers are protected....simple as that.
There will be those who feel you should confront the leader, however, you would put yourself in jeapordy of an accomplice and or reprisal...
Hope this helps, let Jag investigate the situation. Good luck...hoorah!!

Post Navy, I had this problem twice. 1st while I was working on a project for a Defense Contractor who was doing work for the White House in 1970. The boss required us to work from 6 am until 6 pm 6 days a week, but we were only paid for 40 hours. I learned we were billing the government for 72 hours a week. I complained to my management it was illegal and unfair. After no results, I sent a telegram to President Nixon. It was amazing how quickly I was off the job. like overnight. There was talk of pulling my DoD clearances, so I called the ACLU office. My clearances were not tampered with and I was not fired. My boss called me in and told me I had infinite job security but I would probably never see a promotion. I left for another job a few months later and had no problems. The second time,20 years later. my boss made a technical mistake causing damage to government equipment we were building. He falsified a report as to what had happened and used purchased spare parts (customer paid for) to repair the equipment. He was doing all this so as not to jeopardize a multi-million dollar incentive payment, but he lied and falsified documents, plus he began making reprisals against me. Having learned from my first experience, I acquired a sympathetic lawyer. I documented everything my boss did to me. I would not quit my job until I had all my ducks in a row. Each time he retaliated, I reported him to the ethics committee, and he would back off. Then one day he sent me a memo saying my signature authority to buy parts was withdrawn plus a few other odd things (I would have to get permission from him before I spoke with other supervisors!). I knew no one in management had seen this memo when he sent it to me. I wrote back with a two weeks notice of termination, and concurrently took two weeks vacation. My lawyer waited a few days (I meanwhile came in and worked on weekends and nights to get a project finished.) My lawyer sent my employer a letter suggesting they not try to tamper with my clearances and they ought to make sure I had good references from them if asked by my potential employers. I accepted another job elsewhere. Then I sued them. In the end, they spent over a million dollars trying to defend themselves, but we settled. We also made Federal Case Law which has helped others. The new rule was that in a matter of public policy, if a continuing threat of retaliation makes a person less likely to report fraud, waste or abuse, it makes the threat the same as though the retaliation had occurred. I came to believe we each have to stand wherever God puts us.