Former and Current Soldiers and Recruiter Indicted for Allegedly Obtaining Recruiting Bonuses Through Fraud Scheme
WASHINGTON – Six current and former members of the U.S. military have been charged a 41-count indictment in San Antonio for allegedly defrauding various U.S. military components and their contractor of approximately $127,000 by fraudulently obtaining recruiting bonuses, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Xavier Aves, 40, of San Antonio; Christopher Castro, 30, of San Antonio; Grant E. Bibb, 40, of Eagle Pass, Texas; Jesus Torres-Alvarez, 31, of El Paso, Texas; Paul Escobar, 31, of San Antonio; and Richard Garcia, 28, of San Antonio, were charged with one count of conspiracy in the indictment unsealed yesterday as to all the defendants. In addition, Aves is charged with 30 counts of wire fraud and 10 counts of aggravated identity theft. Castro, Bibb, Escobar and Garcia each are charged with five counts of wire fraud and two counts of aggravated identity theft. According to information presented in court, Aves, Bibb, Torres-Alvarez and Garcia are currently serving in the U.S. military while Castro and Escobar are former members of the military. The charges stem from an alleged scheme in which the defendants fraudulently obtained recruiting bonuses for soldiers whom they did not actually recruit.
The defendants were arrested on Sept. 14, and Sept. 15, 2011, by U.S. Army Criminal Investigation Command (CID) agents and made their initial appearances in U.S. District Court for the Western District of Texas. Aves, Castro, Escobar and Garcia appeared before U.S. Magistrate Judge John W. Primomo in federal court in San Antonio. Torres-Alvarez appeared before U.S. Magistrate Judge Robert Castaneda in El Paso and Bibb appeared before U.S. Magistrate Judge Victor Roberto Garcia in Del Rio, Texas.
According to the indictment, 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 recruited 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 recruited other individuals to serve in the Army or Army Reserves.
Through these recruiting programs, a participating soldier could receive up to $2,000 in bonus payments for every person he recruited to serve in 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 the indictment, between February 2006 and February 2011, Aves, Castro, Bibb, Escobar and Garcia paid military recruiters, including Torres-Alvarez, for the names and social security numbers of potential future soldiers. Aves, Castro, Bibb, Escobar and Garcia allegedly created online accounts in their respective names and, using the information they obtained from military recruiters, claimed they were responsible for recruiting certain new soldiers to join the military, when in fact they did not recruit any of th ose people. As a result, Aves, Castro, Bibb, Escobar and Garcia allegedly received a total of approximately $127,000 in fraudulent recruiting bonuses. The indictment alleges that the defendants split the bonuses among themselves and recruited other soldiers to participate in the fraud scheme. According to the indictment, a portion of the bonuses were sent to the personal bank accounts of Aves’s girlfriend.
An indictment is merely a charge and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
If convicted, the defendants face up to five years in prison on the conspiracy charge. Each wire fraud count carries a maximum penalty of 20 years in prison. For each count of aggravated identity theft, the defendants face a mandatory minimum sentence of two years in prison. Each charged count carries a maximum fine of up to $250,000, or twice the gross gain.
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 CID.