Prosecutors troubled by extent of military fraud

2014-11-17T09:56:06-05:00

From: Army Times

WASHINGTON — Fabian Barrera found a way to make fast cash in the Texas National Guard, earning roughly $181,000 for claiming to have steered 119 potential recruits to join the military. But the bonuses were ill-gotten because the former captain never actually referred any of them.

Barrera's case, which ended last month with a prison sentence of at least three years, is part of what Justice Department lawyers describe as a recurring pattern of corruption that spans a broad cross section of the military.

In a period when the nation has spent freely to support wars on multiple fronts, prosecutors have found plentiful targets: defendants who bill for services they do not provide, those who steer lucrative contracts to select business partners and those who use bribes to game a vast military enterprise.

Despite numerous cases that have produced long prison sentences, the problems have continued abroad and at home with a frequency that law enforcement officials consider troubling.

"The schemes we see really run the gamut from relatively small bribes paid to somebody in Afghanistan to hundreds of millions of dollars' worth of contracts being steered in the direction of a favored company who's paying bribes," Assistant Attorney General Leslie Caldwell, head of the Justice Department's criminal division, said in an interview.

In the past few months alone, four retired and one active-duty Army National Guard officials were charged in a complex bribery and kickback scheme involving the awarding of contracts for marketing and promotional material, and a trucking company driver pleaded guilty to bribing military base employees in Georgia to obtain freight shipments — often weapons which required satellite tracking — to transport to the West Coast.

More recently, a former contractor for the Navy's Military Sealift Command, which provides transportation for the service, was sentenced to prison along with a businessman in a bribery case in which cash, a wine refrigerator and other gifts traded hands in exchange for favorable treatment on telecommunications work. Also, three men, including two retired Marine Corps officers, were charged with cheating on a bid proposal for maintenance work involving a helicopter squadron that serves the White House.

Justice Department lawyers say they don't consider the military more vulnerable to corruption than any other large organization, but that the same elements that can set the stage for malfeasance — including relatively low-paid workers administering lucrative contracts, and heavy reliance on contractor-provided services — also exist in the military.

Jack Smith heads the department's Public Integrity section, which is best known for prosecuting politicians but has also brought multiple cases against service members. He said there are obvious parallels between corruption in politics and in the military.

"When an American taxpayer is not getting the deal that they should get, someone is inserting costs that the taxpayers ultimately have to bear, I think anybody would be offended by that," Smith said.

Some cases have stood out.

Defense contractor Leonard Francis was arrested in San Diego last year on charges that he offered luxury travel, prostitutes and other bribes to Navy officers in exchange for confidential information, including ship routes. Prosecutors say he used that information to overbill the Navy for port services in Asia in one of the biggest Navy bribery schemes in years. Ethan Posner, a lawyer for Francis, declined comment.

Yet many others involve more mundane cases of contracting or procurement fraud. Consider the trucking company contractor in Afghanistan who bribed an Army serviceman to falsify records to show fuel shipments that were never delivered, or the former Army contractor who demanded bribes before issuing orders for bottled water at a military camp in Kuwait.

The Commission on Wartime Contracting in Iraq and Afghanistan estimated that between $31 billion and $60 billion was lost to waste and fraud during U.S. operations in those countries. The Justice Department says it brought 237 criminal cases from November 2005 to September 2014 arising from war-zone misconduct — often contracting and procurement fraud.

"We just were not equipped to do sufficient oversight and monitoring on the front end, and we didn't have sufficient accountability mechanisms on the back end, which led to enormous problems," said Laura Dickinson, a national security law professor at George Washington University.

The Defense Department has acknowledged the problems and taken steps in the past decade to tighten controls and improve training.

Domestically, more than two dozen individuals, including Barrera, the Texas National Guard captain, have been charged with abusing a National Guard recruiting incentive program in which soldiers could claim bonuses of a few thousand dollars for each person they said they had recruited. But prosecutors said soldiers repeatedly cheated the system by claiming bonuses for bogus referrals.

Army National Guard spokesman Rick Breitenfeldt said the military takes the matter seriously and two years ago suspended the problematic recruiting program, known as G-RAP.

"We acknowledge that fraudulent activity took place with this program and continue to work with law enforcement agencies to identify the accountable individuals and take appropriate action," he said in a statement.

Caldwell said the Justice Department must have a zero-tolerance policy as a deterrent. "It's really not worth risking your military career and your reputation — not to mention your freedom — for this kind of thing," she said.

http://www.armytimes.com/story/military/pentagon/2014/11/17/mil-fraud/19161013/

Response by CW5 Private RallyPoint Member made Nov 17 at 2014 10:24 AM

2014-11-17T10:24:29-05:00

I'll say here what I said just a little earlier (here - https://www.rallypoint.com/answers/milfraud-where-have-all-the-honest-soldiers-gone)

One way to improve honesty and integrity is to punish those who violate the law, are dishonest, and lack integrity - to the maximum extent possible. I believe that could have an effect on others who may be teetering on the edge of doing something stupid (illegal, dishonest, unethical). Make an example of the violators to discourage others from following in their footsteps.

Training is fine, but I submit that it can't compare to news that someone like Fabian Barrera is "going away" for a few years for dishonesty and trying to cheat the system.

MilFraud: Where have all the Honest soldiers gone? | RallyPoint

Seems like every week we learn of yet another soldier accused or convicted of dishonesty. Many are commissioned officers. What can be done to improve honesty and integrity among soldiers? http://bigstory.ap.org/article/fdd712bdd3ae4369a5e34be7da8c7c3e/prosecutors-troubled-extent-military-fraud

Response by PO1 Michael Fullmer made Nov 17 at 2014 11:20 AM

2014-11-17T11:20:15-05:00

In my opinion, so long as human nature is a factor, greed, bribery, the chance to get something for a relative nothing, this type of corruption will always exist. The good ole boy network is also a factor. When you can purchase an item for "X" from one vendor, but the govt supply system is such that you have to purchase the same item for "Y" and "Y" is 3 or 4 times more, just because that company is in this guys or that guys sphere of influence and lining his pocket because he cares more about HIS bottom line than saving the taxpayers any $$ whatsoever. The military supply systems could save SO much $$ it isnt funny, if they would look at the best deals and not the highest prices.

Response by MSG Brad Sand made Nov 17 at 2014 11:51 AM

2014-11-17T11:51:32-05:00

I think there is a giant diffenernce between the military and elected officials...the military is investigated, prosecuted and punished. Elected officials have been doing the same thing but they continue to profit and nothing is being done...if they are caught they are still reelected and if they are forced out, they just change sides on where the bribes are coming from.

Response by CSM David Heidke made Nov 17 at 2014 12:11 PM

2014-11-17T12:11:05-05:00

This leads to some very interesting discussion.

Corruption is not just a problem in the Military; it is widespread throughout the government. We strive to teach the Army values on a daily basis, but also on a daily basis a Soldier will see rampant fraud, waste and abuse in almost every level. In Afghanistan it was almost condoned when you would see the United States spend enormous amounts of money on improvement projects that had a large percentage of slack built into them for missed deadlines, additional features, and allowed variances. These variables were often used to line and Afghan’s pockets or increase his stature in the community. While most of the Soldiers who had seen this have not been swayed by seeing authorities turn a blind eye toward corruption, some were inevitably going to try to cash in on some of the available cash.

The government is setting up a culture of allowing corruption to go without significant punishment. We see elected and appointed officials get away with perceived and actual corrupt actions all the time. We see government contracts go to friends and associates of those in power to make the decisions in direct contravention of basic rules of business ethics, and yet nothing is done. It’s only a matter of time before it becomes regularly accepted to pad contracts and estimates in order to get rich on the governments dime.

Corruption anywhere is wrong. I will not stand for it in my command, but I see it all over the place. We try to route it out where we can, but with the examples we are given in our daily lives it because more and more difficult to teach the moral and ethical way to operate. The more news stories that show how easy it is to get rich doing the easy unethical action, the harder it will be for an individual to do the right thing.

We as citizens, taxpayers, and voters, need to keep our government accountable on all levels so that the job of inculcating values into our subordinates, and more importantly our children becomes easier.

Response by MAJ Robert (Bob) Petrarca made Nov 17 at 2014 1:03 PM

2014-11-17T13:03:03-05:00

Sure, there's a major issue and thie military becomes the scape goat???? POTUS and Congress and Company CEOs steal all the live long day and are as deep into these schemes as they claim the military is. Remind me again WHO got rich during OIF and OEF? Whole lot of civilian contracting companies and one Vice President. Sure wasn't me on my salary at the time.

SSDD!

Response by SSG Private RallyPoint Member made Nov 19 at 2014 11:21 AM

2014-11-19T11:21:59-05:00

I don't think the "Well, congress does it too answer" is the appropriate one. As service-members we are expected to uphold the highest moral and ethical values. We are the model citizens of our Nation. The fact is we are expected to be even better individuals than our own Congress. Another factor is that these government officials are ELECTED. Their constituents are often well-aware of their behaviors/voting records yet choose to re-elect them. It is up to the PEOPLE to decide the fate of these politicians at the ballot box and if they don't it's their decision. Also when our people are left to believe they have to constantly vote for the "lesser of two evils", well...these behaviors will continue. Our military officials are disgraced and ousted whenever their deviant behaviors are exposed. It is our culture in the military that differs from the one in Congress that demands these behaviors do not go unpunished.

Response by SPC Sheila Lewis made Nov 10 at 2016 12:08 PM

2016-11-10T12:08:22-05:00

From basic research one learns the hotspots are in Africa, the Phillipines...other countries have to work with U.S. authorities.

Response by SSgt Boyd Herrst made Dec 22 at 2017 3:19 PM

2017-12-22T15:19:50-05:00

When I was an A1C back in the day.. I was approached by a civilian asking if I wanted to make some fast money... I set him up with a agent in the OSI and got outof the pic.. when it was over... OSI and CID were at ea. Other’s throats..
that CID was trying to set me up.. and I set him up with OSI to get busted.. I thought he was s real bad dude.. goofy hair and outfit.. a suit that looked like it was bought in a pawn shop.. I protected privileges I earned.. why ruin my own life... not worth it over cigarettes.. at first he thought he had a sucker.. ha!
Not happening ! So I set him up !... Well..
about a week later I got called into the Squadron Cmdr’s Office.. There were several others there.. that Army CID clown and the agent I set him up with and some other agents on both sides..!
I thought I was in deep stuff.. stuff one doesn’t want to be deep into.. It seems I made them all look like keystone kops and it wasn’t much appreciated... what they were appreciative of is I was protective of my exchange privileges to sell them.. ...

Response by 1st Lt Padre Dave Poedel made Sep 2 at 2021 12:33 PM

2021-09-02T12:33:40-04:00

And yet, they still come up with schemes…I guess I am not very creative but such schemes have never presented themselves, so I have never been tempted to cheat. Bold criminals…..not smart.