A former member of the U.S. Army National Guard was sentenced today to serve 57 months in prison for leading a conspiracy to obtain approximately $244,000 in fraudulent recruiting referral bonuses from various U.S. military components and their contractor, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.
Former U.S. Army National Guard Specialist Xavier Aves, 42, of San Antonio, was sentenced by Chief U.S. District Judge Fred Biery in the Western District of Texas. In addition to his prison term, Chief Judge Biery sentenced Aves to serve three years of supervised release and ordered Aves to pay $244,000 in restitution, jointly and severally with co-conspirators.
On Sept. 16, 2011, a grand jury in the Western District of Texas returned a 41-count indictment against Aves and five co-defendants, in which Aves was charged with one count of conspiracy to commit wire fraud, 30 counts of wire fraud and 10 counts of aggravated identity theft.
On Feb. 3, 2012, Aves pleaded guilty to one count of conspiracy to commit wire fraud and one count of aggravated identity theft.
The case against Aves and his co-defendants arose from an investigation concerning allegations that former and current soldiers and military and civilian contract recruiters in the San Antonio area engaged in a wide-ranging scheme to obtain fraudulent recruiting referral bonuses. To date, 11 individuals have been charged, 10 of whom have pleaded guilty and been sentenced. The investigation is ongoing.
According to court documents, between 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 bonus programs designed to offer monetary incentives to soldiers who referred others to serve in the U.S. military. In addition, the Army managed its own recruiting bonus programs, which offered referral bonuses to soldiers who referred other individuals to serve in the Army or Army Reserves after registering online as recruiting assistants (RA) or sponsors.
Through these recruiting programs, a participating soldier could receive up to $2,000 in bonus payments for every person he referred to join the U.S. military. Based on certain milestones achieved by the referred soldier, a participating soldier would receive the recruiting bonus payments in the form of direct deposits and pre-paid debit card payments.
According to court documents, between February 2006 and February 2011, Xavier Aves, Christopher Castro, Grant Bibb, Paul Escobar, Richard Garcia, Ernest Gonzales and others paid military recruiters, including Jesus Torres-Alvarez, for the names and social security numbers of potential soldiers. Aves, Castro, Bibb, Escobar, Garcia, Gonzales and others used the information they obtained from recruiters to claim credit in their online RA and sponsor accounts for referring certain new soldiers to join the military, when in fact they did not refer those individuals.
Aves orchestrated the scheme by serving as a key intermediary between the recruiters and the participating RAs. Aves arranged for the money to be split among his co-conspirators and directed a portion of the proceeds to be wired to his and his girlfriend’s personal bank accounts.
As a result of the fraudulent referrals, Aves and his co-conspirators received a total of approximately $244,000 in fraudulent recruiting bonuses.
The case is being prosecuted by Trial Attorneys Edward J. Loya Jr., Brian A. Lichter, Mark J. Cipolletti and Sean F. Mulryne 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 Division.