WASHINGTON – A former soldier pleaded guilty today to conspiracy to obtain a total of at least approximately $240,000 in fraudulent recruiting bonuses from various U.S. military components and their contractor, and to one count of aggravated identity theft for unlawfully using the means of identification of a potential soldier, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Former Specialist Xavier Aves, 40, of San Antonio, Texas, was indicted on Sept. 13, 2011, along with former Corporal Christopher Castro, 30, of San Antonio; former Staff Sergeant Grant E. Bibb, 40, of Eagle Pass, Texas; Sergeant First Class Jesus Torres-Alvarez, 31, of El Paso, Texas; Specialist Paul Escobar, 32, of San Antonio; and Specialist Richard Garcia Jr., 28, of San Antonio.
According to court documents filed in U.S. District Court for the Western District of Texas, 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 others to join the Army, the Army Reserves and the Army National Guard. In addition, the Army managed its own recruiting programs to offer bonuses to soldiers who referred other individuals to join the Army or the Army Reserves.
Through these recruiting programs, a participating soldier could receive up to $2,000 in bonus payments for every person 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.
According to court documents, Aves enlisted in the Army National Guard in approximately January 2004. Aves admitted that, between approximately December 2005 and February 2010, he and certain U.S. soldiers who participated in the recruiting programs agreed to pay active duty and civilian contract military recruiters – including, among other recruiters, Castro and Torres-Alvarez – for the names and Social Security numbers of potential soldiers, many of whom were “walk-ins” or people who had decided to join the U.S. military without any referral.
Aves admitted that he and his co-conspirators used the means of identification for these potential soldiers to claim that they were responsible for referring these potential soldiers, when in fact Aves and his co-conspirators had not referred them.
As a result of these fraudulent representations, Aves and his co-conspirators collected at least approximately $244,000 in fraudulent recruiting bonus payments from the various recruiting programs. Aves personally received at least approximately $69,000 in fraudulent bonuses. Aves admitted that he and other participating soldiers split the payments with the active duty and civilian contract military recruiters who provided them with the information concerning the new recruits.
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 pecuniary gain or loss. The charge of aggravated identity theft carries a mandatory sentence of two years in prison, which must be imposed consecutively to any prison term imposed on the conspiracy count, and a maximum fine of $250,000 or twice the pecuniary gain or loss. Sentencing has been scheduled for May 25, 2012, before Chief U.S. District Judge Fred Biery in San Antonio.
The case against Aves 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 seven individuals, five of whom have pleaded guilty.
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.
On Nov. 3, 2011, Castro pleaded guilty to one count of conspiracy to commit wire fraud for his role in the scheme. 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. On Jan. 30, 2012, Bibb pleaded guilty to one count of conspiracy to commit wire fraud.
The case against Escobar and Garcia is scheduled for trial on April 23, 2012, in San Antonio. These defendants are presumed innocent until proven guilty in a court of law.
The case 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.