Ongoing Investigation Has Resulted in the Guilty Pleas of Eight Individuals
WASHINGTON –Two former soldiers pleaded guilty to participating in a conspiracy to defraud the U.S. military and its contractor of at least approximately $244,000 in fraudulent recruiting bonuses, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Former Army Specialist Paul Escobar, 32, and current Army Specialist Richard Garcia Jr., 28, both of San Antonio, Texas, were indicted on Sept. 13, 2011, in the U.S. District Court for the Western District of Texas in San Antonio. Escobar entered his guilty plea on July 19, 2012, and Garcia entered his plea on July 26, 2012.
Former Specialist Xavier Aves, 40, of San Antonio; Corporal Christopher Castro, 30, of San Antonio; former Staff Sergeant Grant E. Bibb, 40, of Eagle Pass, Texas; and Sergeant First Class Jesus Torres-Alvarez, 31, of El Paso, Texas, were also indicted along with Escobar and Garcia.
According to court documents, between approximately 2005 and 2008, the U.S. Army, the U.S. Army Reserves and the National Guard Bureau entered into contracts with Document and Packaging Broker Inc. to administer recruiting programs designed to offer monetary incentives to U.S. soldiers who referred civilians to join the Army, the Army Reserves and the Army National Guard. In addition, the Army managed its own recruiting referral programs to offer bonuses to soldiers who referred other individuals to join the Army or the Army Reserves.
Through these recruiting bonus programs, participating soldiers could receive up to $2,000 in bonus payments for civilians whom they referred to join the U.S. military. Based on certain milestones achieved by the referred soldier, a participating soldier would receive payments in the form of direct deposits and pre-paid debit card payments. To participate, soldiers needed to set up online sponsor or recruiting assistant accounts.
According to court documents, Escobar enlisted in the U.S. Army in approximately November 2007, and served until approximately January 2010. Escobar admitted that in approximately July 2008, he and co-conspirator Aves agreed to use a recruiting assistant account in Escobar’s name to claim that Escobar was responsible for referring certain potential soldiers to join the U.S. Army, when in fact Escobar had not referred those soldiers. Through these fraudulent representations, Escobar and Aves received a total of approximately $6,000 in fraudulent recruiting bonuses.
According to court documents, Garcia enlisted in the U.S. Army in approximately November 2005. Garcia admitted that in approximately May 2008, he and co-conspirator Aves agreed to use a recruiting assistant account in Garcia’s name to claim that Garcia was responsible for referring certain potential soldiers to join the U.S. Army, when in fact Escobar had not referred those soldiers. Through these fraudulent representations, Garcia and Aves received a total of approximately $13,000 in fraudulent recruiting bonuses.
According to court documents, Escobar, Garcia, Aves and their co-conspirators collected, in total, approximately $244,000 in fraudulent recruiting bonus payments from the various recruiting programs.
The charge of conspiracy to commit wire fraud carries a maximum penalty of five years in prison and a maximum fine of $250,000 or twice the gain or loss. Sentencing for Escobar and Garcia has been scheduled for Nov. 2, 2012, before Chief U.S. District Judge Fred Biery in San Antonio.
The case against Escobar and Garcia arises from an investigation involving allegations that former and current military recruiters and U.S. soldiers in the San Antonio area engaged in a wide-ranging scheme to obtain fraudulent recruiting bonuses. To date, the investigation has led to charges against eight people, all of whom have pleaded guilty. The investigation is ongoing.
On May 31, 2012, former Sergeant and National Guard recruiter Rafael L. Acosta, 39, of San Antonio, pleaded guilty to conspiracy to commit bribery and wire fraud for organizing and leading a conspiracy to obtain more than $90,000 in fraudulent recruiting bonuses. He is scheduled to be sentenced on Nov. 2, 2012.
On February 3, 2012, Aves pleaded guilty to one count of conspiracy to commit wire fraud, and one count of aggravated identity theft, which carries a mandatory minimum sentence of two years. On Jan. 30, 2012, Bibb pleaded guilty to one count of conspiracy to commit wire fraud. On Jan. 26, 2012, Torres-Alvarez pleaded guilty to one count of conspiracy to commit wire fraud. According to court documents, Torres-Alvarez, an active duty recruiter, admitted that he sold the names and Social Security numbers of potential soldiers to Aves and others involved in the scheme. Aves, Bibb and Torres-Alvarez are scheduled for sentencing on Nov. 2, 2012.
On Nov. 3, 2011, Castro pleaded guilty to one count of conspiracy to commit wire fraud for his role in the scheme. On June 29, 2012, Castro was sentenced to one year and a day in prison and ordered to pay $244,000 in restitution, jointly and severally.
On Jan. 28, 2010, Sergeant Ernest Gonzales, 50, of San Antonio, pleaded guilty to a one-count criminal information charging him with conspiracy to commit wire fraud for his role in the scheme. Gonzales assisted the government by providing helpful information concerning Aves, Bibb and Castro. On June 29, 2012, Gonzales was sentenced to five years probation and ordered to pay $244,000 in restitution, jointly and severally.
This investigation is being prosecuted by Trial Attorneys Edward J. Loya Jr. and Brian A. Lichter of the Criminal Division’s Public Integrity Section. The case is being investigated by agents from the San Antonio Fraud Resident Agency of the Major Procurement Fraud Unit, U.S. Army Criminal Investigation Command.