Jury Finds Elk Grove Man Guilty of National Guard Recruiting Fraud
SACRAMENTO, Calif. — After a seven-day trial, a federal jury found Richard C. Sihner, 54, of Elk Grove, guilty of 18 counts of wire fraud and one count of false statements to a federal agent for a scheme to fraudulently obtain bonuses in a recruitment program for the California National Guard, United States Attorney Benjamin B. Wagner announced.
Sihner is a retired member of the California National Guard, and participated in the Guard Recruiter Assistant Program (G-RAP). The United States Army contracted with Document and Packaging Broker Inc. (DOCUPAK) to administer G-RAP. Under G-RAP, members of the California National Guard served as recruiting assistants (RA). If an RA referred a potential Guard member to a recruiting office and that person ultimately enlisted, the RA was eligible to receive monetary compensation disbursed by DOCUPAK. RAs would typically receive a $1,000 payment when a nominee enlisted and a second $1,000 payment when the nominee left for boot camp. Ultimately, the G-RAP program was discontinued following the discovery of widespread fraud. People who walked into recruiting offices entirely on their own initiative, without having been referred by an RA, were claimed by corrupt RAs in DOCUPAK’s system, often with the assistance of corrupt recruiters.
According to court documents and evidence produced at trial, from December 27, 2007 to April 16, 2010, Sihner was an RA in the G-RAP program. A recruiter gave him information about new recruits so that Sihner could falsely claim to have referred them. Sihner made false claims and wrote elaborate falsehoods in the notes section of the DOCUPAK online portal indicating that he had referred the recruits. In fact, the recruits had made contact with the Guard to discuss potential enlistment for reasons entirely unrelated to Sihner. Sihner was paid $95,000 in compensation for purportedly referring 51 soldiers to enlist. Of the 39 recruits federal agents contacted prior to indictment, none had been referred to the Guard by Sihner. When confronted, Sihner lied to federal law enforcement agents investigating the fraud by repeatedly claiming that he had personally referred all of the new soldiers and that he had taken them to the recruiting office to introduce them.
“Sihner and others who corrupted the G-RAP program were parasites on the Army National Guard, sucking dollars from the services that defend this country,” said U.S. Attorney Wagner. “Richard Sihner was the latest to be brought to justice in this district, but he won’t be the last.”
“When Richard Sihner decided to cheat the California Army National Guard by abusing the G-RAP recruitment incentive program, he threw away the honor earned during his entire career in uniform,” said FBI Special Agent in Charge Monica Miller of the Federal Bureau of Investigation's Sacramento field office. “Men and women in the armed services sacrifice much to protect our country. The FBI and our partners at Army Criminal Investigative Command will continue to honor such sacrifice by stopping criminals like Sihner, who place self-enrichment above the virtues of service and personal integrity.”
Special Agent in Charge Chris Hendrickson of the Defense Criminal Investigative Service stated, “While the vast majority of military service members are honest in their work and passionately committed to the mission of protecting this nation, some choose to abuse public trust. Public corruption is always unacceptable and the Defense Criminal Investigative Service will use all tools available to protect the public's trust and taxpayer interest.”
“Mr. Sihner's guilty verdict is further proof we will hold soldiers accountable should they partake in criminal behavior,” said Maj. Gen. David S. Baldwin, Adjutant General for the California National Guard. “I'd like to express our appreciation for the United States Attorney's painstaking efforts to account for these crimes.”
Sihner is scheduled to be sentenced by United States District Judge John A. Mendez on May 3, 2016. Sihner faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for each count of wire fraud, and a maximum sentence of five years in prison and a $250,000 fine for false statements. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case is the product of an ongoing investigation by the Army Criminal Investigative Command Major Procurement Fraud Unit, the Defense Criminal Investigative Service, and the Federal Bureau of Investigation. Assistant United States Attorneys Matthew G. Morris and Katherine T. Lydon are prosecuting the case.
Other National Guard members and recruiters have been charged in similar recruiting‑fraud schemes in the Eastern District of California. The following defendants have pleaded guilty and await sentencing.
2:14-cr-153 TLN — Brian Kaps, 42, of Chico, pleaded guilty on November 21, 2014, to one count of wire fraud. Sentencing is set for January 28, 2016.
2:14-cr-152 TLN — Sarah Nattress, 28, of Paradise, pleaded guilty on October 23, 2014, to one count of wire fraud. A status conference for sentencing is set for January 28, 2016.
1:14-cr-107 DAD — Leonardo Pesta, 47, of Mountain View, pleaded guilty on July 27, 2015, to one count of wire fraud. Sentencing is set for April 26, 2016.
1:14-cr-108-LJO — Nicholas Huerta, 33, of Fresno, pleaded guilty on September 14, 2015 to one count of wire fraud. Sentencing is set for January 26, 2016.
Charges are pending against the following (the charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt):
1:14-cr-106 DAD — Joaquin Cuenca, 38, of San Diego, was a recruiter and allegedly is responsible for causing $30,000 in fraudulent bonuses. The trial in that case is currently ongoing in the U.S. courthouse in Fresno. The next date of the trial is January 26, 2016.
2:15-cr-005 TLN — Steel A. Davis, 43, of Paradise, was charged with eight counts of wire fraud on January 8, 2015. A status conference is set for January 28, 2016.
1:14-cr-109 LJO — Jimmy Maldonado, 35, a recruiter, and his wife Mayra Garcia Maldonado, 29, a recruiting assistant, both of Fresno, are allegedly responsible for causing $40,000 in fraudulent bonuses. Trial is scheduled for May 3, 2016.