McCaskill: $4M Recruiting Scheme Perpetrated Against Army
Senator: bogus website, single largest scheme to date stemming from review of Army recruitment program that lacked safeguards
WASHINGTON – U.S. Senator Claire McCaskill said today that a scheme—the largest revealed by the McCaskill-led Subcommittee on Financial & Contracting Oversight investigation of Army recruiting programs—deprived the U.S. Army of nearly $4 million. The scheme, perpetrated by a retired Army sergeant and his wife who are both employees at the Department of Defense, used a website fashioned to appear like an official Army website, named “officialarmy.com,” to gather names of individuals who were interested in joining the Army. The couple then submitted those names to the Army—earning them a cash bonus for each recruit they “referred.”
Officials in the Army were aware of the scheme as it was being perpetrated but did nothing to prevent it or mitigate its effects.
“I am absolutely disgusted,” said McCaskill, a former prosecutor and Missouri State Auditor. “This is a staggering exploitation of public trust, of the brave men and women who volunteer to serve in the Army, and of taxpayer dollars. It’s past time for the Department of Defense to take a hard look at the people who perpetrated and approved this scheme, and for the Recruiting Command to put in place policies to better safeguard against future recruiting schemes.”
Under the now-discontinued Referral Bonus Program, the couple received up to $2,000 for each of the more than 2,000 recruits they referred—totaling nearly $4 million. The only “service” they provided was forwarding the names of recruits—the majority of whom were likely to join the Army regardless—to Army recruiters. Unfortunately, because there were no policies capping the number of recruits or requiring a sponsor to meet or to mentor a nominee, this scheme was technically legal.
Accordingly, the couple is not required to return the money, they face no criminal charges, and they are both still employed at the Department of Defense.
McCaskill learned that in 2007, the United States Army Recruiting Command flagged the existence of the website—but instead of focusing on the site’s questionable function or the massive waste of money, the Recruiting Command’s concern was merely a potential trademark infringement. An individual working at the Recruiting Command was quoted at the time saying that they admired the couple’s actions.
As a result, McCaskill wrote to Secretary of the Army John McHugh, asking him to consider “the propriety of the Defense Department’s continued employment” of the couple in question and to “review the procedures that allowed [the US Army Recruiting Command] to not simply tolerate this website, but to encourage it, and to ensure that caps are in place to prevent abuses of similar recruiting programs in the future.”
McCaskill has uncovered several other major instances of waste and abuse in the Army National Guard’s recruiting programs. In February, McCaskill led a hearing on reports of fraud in the Army National Guard’s Recruiting Assistance Program. She found that the Recruiting Assistance Program was a vehicle for massive fraud by Guard service members, with up to $100 million in potential fraud of taxpayer dollars and more than a thousand people implicated.
In May, McCaskill led a hearing on reports of waste in spending on sports-related marketing and sponsorships with organizations such as NASCAR and IndyCar. Following the hearing, McCaskill sent a letter to Major General Judd Lyons, the Acting Director of the Army National Guard, pressing for answers on the Guard’s sponsorship and marketing contracts. In August, the National Guard announced a decision to curtail its spending on sports-related marketing and recruitment with organizations such as NASCAR and IndyCar.
Visit mccaskill.senate.gov/accountability to learn more about McCaskill’s fight to strengthen accountability.