Two Former U.S. Soldiers Sentenced for Roles in Fraudulent Military Recruiting Referral Bonus Scheme
WASHINGTON – Two former members of the U.S. military were sentenced today for their participation in a conspiracy to obtain approximately $244,000 in fraudulent recruiting referral bonuses from various U.S. military components and their contractor, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Grant E. Bibb, 41, of Eagle Pass, Texas, and Paul Escobar, 32, of San Antonio, were sentenced today by Chief U.S. District Judge Fred Biery in the Western District of Texas. Judge Biery sentenced Bibb to serve one year and one day in prison and three years of supervised release. Escobar was sentenced to six months in prison, six months of community confinement and three years of supervised release. Judge Biery also held Bibb and Escobar jointly and severally liable for $244,000 in restitution.
Bibb pleaded guilty to conspiracy to commit wire fraud on Jan. 30, 2012. Escobar pleaded guilty to conspiracy to commit wire fraud on July 19, 2012.
According to court documents, Bibb served in the Texas National Guard between January 2003 and July 2007 and in the U.S. Army Reserves from October 2007 until November 2010. In addition, from December 2007 until April 2009, Bibb worked as a contract military recruiter in Katy, Texas.
Escobar served in the U.S. Army Reserves from November 2005 until February 2007. Escobar then served in the U.S. Army from November 2007 to January 2010.
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. (Docupak) to administer recruiting bonus programs designed to offer monetary incentives to soldiers who referred others to join the U.S. military. In addition, the Army managed its own recruiting bonus programs, which offered bonuses to soldiers who referred other individuals to join the Army or the 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 serve in the U.S. military.
Bibb and Escobar admitted that they participated in a fraud scheme whereby active duty and civilian contract recruiters provided RAs and sponsors with the names and Social Security numbers of “walk-in” soldiers, which are individuals who decided to join the military without being referred by anyone. Using this information, the RAs and sponsors claimed credit for referring these potential soldiers to join the military, when in fact they did not refer them. As part of the fraud scheme, the RAs and sponsors split the bonus payments with the recruiters and others who provided the potential soldiers’ personal identifying information.
According to court documents, Bibb, Escobar and their co-conspirators received at least $244,000 in fraudulent recruiting referral bonuses in total. Bibb personally received $35,000 in fraudulent recruiting referral bonuses using RA accounts in his name and an RA account in a relative’s name. Bibb also worked with other soldiers and active duty recruiters to set up RA accounts in those soldiers’ names for the purpose of claiming fraudulent recruiting referral bonuses. Bibb, the recruiters and at least four soldiers split a total of at least $4,000 in fraudulent bonuses. Escobar permitted a co-conspirator to receive $6,000 in fraudulent recruiting referral bonuses using Escobar’s RA account and made fraudulent representations to Docupak to carry out the scheme.
This case 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, 9 individuals have been charged, all of whom have pleaded guilty. The investigation is ongoing.
The case is being prosecuted by Trial Attorneys Edward J. Loya Jr., Brian A. Lichter 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.