WASHINGTON (Reuters) - More than 1,200 Army recruiters and assistants are under investigation on suspicion of fraud involving tens of millions of dollars from a program aimed at boosting recruitment during the Iraq war, according to papers released on Monday by a congressional panel.
One person, now under prosecution, was fraudulently paid $275,000 under the recruitment program, and four other top recipients received more than $100,000 apiece, documents from a panel of the Senate Homeland Security committee said.
The Financial and Contracting Oversight Subcommittee, chaired by Senator Claire McCaskill, was scheduled to hold a hearing on Tuesday to address the case, which it described as "one of the largest fraud investigations" Army investigators have ever handled in size and numbers of people involved.
Investigators have begun a review of "all 106,364 individuals who received money" from the Recruiting Assistant Program, the panel said. Investigations are expected to continue through 2016, the panel said.
The Army declined to comment on the case. Senior Army officials were due to testify at the hearing, including the service's top auditor, investigator and staff director.
The recruiting program was initiated in 2005 at the height of the Iraq war to address an enlistment shortfall in the Army National Guard. The program paid members of the guard and others who were approved as assistants between $2,000 and $7,500 for referring people who eventually joined the state-based militia.
The program was successful in helping the Guard reach its recruitment levels and was eventually adopted as well by the Army Reserve and the active duty Army.
Recruiters whose job was to locate new service members were not meant to be eligible for the payments, according to documents from the subcommittee. But effective controls were not in place to prevent that from happening, the document said.
After reports of potential fraud in 2007, the Army Audit Agency examined the program and found that 705 recruiters were linked to payments with a high risk for fraud. Criminal investigators had looked into 21 of those cases and confirmed fraud, the agency said in an audit report.
Another 551 recruiters were linked to payments with a medium risk for fraud, and 2,022 people who had registered as recruiter assistants received payments that potentially violated the program's rules, the audit said.
Reporting by David Alexander; Editing by Ken Wills