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Monday, July 2, 2012
TWO SENTENCED FOR SCHEME INVOLVING FRAUDULENT RECRUITING BONUSES
Monday, July 2, 2012
Two Former Soldiers Sentenced for Their Participation in Fraud Scheme to Obtain $244,000 in Military Recruiting Referral BonusesDefendants Ordered to Pay $244,000 in Restitution
WASHINGTON – Christopher Castro, 31, of San Antonio, Texas, and Ernest Gonzales, 51, also of San Antonio, were sentenced 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.
On June 29, 2012, Chief U.S. District Judge Fred Biery sentenced Christopher Castro to one year and a day in prison, to be followed by three years supervised release. Ernest Gonzales was sentenced on June 29, 2012, by Chief Judge Biery to five years probation. Chief Judge Biery also ordered Castro and Gonzales to pay $244,000 in restitution, to be paid jointly and severally.
Castro pleaded guilty to conspiracy to commit wire fraud on Nov. 3, 2011. Gonzales pleaded guilty to conspiracy to commit wire fraud on Jan. 28, 2010.
According to court documents filed in U.S. District Court for the Western District of Texas, Castro served at different times in the Army National Guard and the Army Reserves from February 2007 through February 2008. Castro also served as a civilian contract recruiter from June 2007 through October 2009. Gonzales has served at different times in the Army National Guard and the Army Reserves from June 2005 to present.
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 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. To participate in the recruiting bonus programs, an eligible soldier needed to establish an online Recruiting Assistant (RA) or Sponsor account. 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.
Castro and Gonzales 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—or persons 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.
In total, Castro, Gonzales and their co-conspirators received at least $244,000 in fraudulent recruiting referral bonuses according to court documents. Castro personally received $26,000 in fraudulent recruiting referral bonuses using RA accounts in his name and an RA account in his relative’s name. In his capacity as a civilian contract recruiter, Castro admitted that he also sold the names and Social Security numbers of potential soldiers to a co-conspirator, in return for a portion of the fraudulent recruiting referral bonuses obtained by Aves and others. Gonzales personally received $17,000 in fraudulent recruiting referral bonuses using his RA account and permitted a co-conspirator to receive an additional $18,000 in fraudulent recruiting referral bonuses through Gonzales’s RA account.
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, eight individuals have been charged, six of whom have pleaded guilty. The investigation is ongoing. The individuals who have pleaded not guilty are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.