Fraud in the Inducement? California National Guard Troops Made to Pay Back Enlistment Bonuses

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Can they escape the payback? California attorney examines the issues and potential fraud vitiating consent to join at all. The Pentagon is making thousands of soldiers repay enlistment bonuses. They’re bonuses of $15,000 or more. This money given to soldiers for enlistment when short of troops in Afghanistan and Iraq.

However, now after ten years the Pentagon wants the money back. Even though, many served multiple tours in the Middle East. This involves about 14,000 soldiers ordered to repay the enlistment bonus. So in other words, soldiers were told they would get a signing bonus for enlisting to fight in the wars.

They accepted, signed and went to serve. It would appear that the enlistees were lied to by their recruiters. As a contract attorney, I would argue fraud as a basis to invalidate the contract ab initio. Next, I would claim the $15,000 represents a portion of my damages. This is because when a knowing misrepresentation induces a person to do or not do something, we have reliance. So if the reliance on the promise causes one to become hurt, he or she is damaged.

But there are different types of “hurt.” An example of an injury could be willingly depriving ones-self of freedom. Living under military law is exactly that. It is a sacrifice to be part of a unit that restricts “liberty.” So a person with tangible damages like that could certainly have a case in a civilian forum. The Uniform Code of Military Justice (“UCMJ”) is an entirely different animal.

So in a regular case I would try and vitiate my consent by arguing fraud. And here, we did have a receipt of a benefit that induced a person to act to their detriment. But alas, every Sailor or Marine today could be set free from their contract. Everyone has heard the stories of the recruiter who promised the signtaory that he could “be a Navy SEAL no matter what,” etc.

When that sailor ended up scraping barnacles, he sure wanted out. Maybe it was fraud, maybe not. The bottom line is that cases by military personnel against the military usually do not end well for the victims. This is sad because now the soldiers are told they must repay interest charges!

Failure to Repay

Soldiers that fail to repay the bonus face the interest charges, plus wage garnishments and tax liens. About 9,700 soldiers still active and veterans told they must repay some or all of the bonuses by the California National Guard.


Audits showed a widespread overpayment by the California Guard. Ten years ago at the height of the war in Afghanistan and Iraq. The investigation showed it happened because of mismanagement and fraud by Guard officials. Due to the pressure to meet the target enlistment numbers.

California Guard Col Michael S. Piazzoni oversaw the audits. He said, “The system paid everybody up front. Then we spent the next five years figuring out if they were eligible.” Therefore, the guard unable to waive the debts the Guard officials began helping soldiers and veterans file appeals with the National Guard Bureau and Army Board for Correction of Military Records. Taking this avenue can wipe out the debt. Soldiers and veterans say there is no guarantee of success going this way. Also, it is frustrating and a long process.


Former Army Captain Christopher Van Meter age 42 said the bonuses kept people in the Guard. Many of them deployed. He is an Iraq veteran that refinanced his home to repay $25,000 the reenlistment bonus. He also paid $21,000 in student loan repayment. The Army said he should never have received either.

The captain said, “people like me just got screwed.” He was awarded a Purple Heart for combat injuries. After the vehicle, he was in hit a roadside bomb.

Former Army Master Sergeant Susan Haley deployed to Afghanistan. Now she pays $650 a month. This is a quarter of the family income for $20,500 in bonuses.

The 47 year old served 26 years. Along with her husband and oldest son a medic who lost a leg. Haley said, “I feel totally betrayed.” She said, “they’ll get their money, but I want those years back.”

Haley worries they will become forced to sell their home to repay the bonuses.

The Guards Stand

The California National Guard officials said taking the money back from veterans is distasteful.

Major General Matthew Beevers deputy commander of the Guard said, “we’d be more than happy to absolve these people of their debts. We just can’t do it. We’d be breaking the law.”

Pentagon Perspective

The Pentagon while bonuses offered for reenlistment they now expect these repaid now. The two wars caused the Pentagon to offer bonuses as incentives. Done to fill the volunteer armed forces in the mid 2000s.

Bonuses meant to go to the highest demand assignments like enlisted rather than officers, intelligence and civil affairs. Because of the need for more military personnel on the ground in Afghanistan and Iraq.

So far they have recovered over $22 million.

They could forgive improper bonuses. But instead, 42 auditors assigned to the California Guard to go over bonuses and incentive payments to 14,000 soldiers.

California Guard active duty, now either current or veterans went to mass meetings as ordered in 2006 and 2007. Soldiers then signed up after the terms and bonuses once they heard the outline for six-year reenlistments.

The Guilty

Retired Master Sgt. Tony Jaffe the Guard’s incentive manager pleaded guilty of filing false claims in 2011. The false claims totaled $15.2 million according to a Department of Justice (DOJ) statement. In her guilty plea, she admitted to filing false and fictitious claims on behalf of Guard members.

Furthermore, the DOJ statement said Jaffe admitted to submitting claims for bonuses for members not eligible.

Jaffe sentenced to federal prison for 30 months. Along with the Jaffe conviction, three other officers pleaded guilty. The officers were fined and placed on probation. So here, the government is arguing that the personnel received an “illegal” benefit due to the fraud of others under the government’s control.

Jus ex injuria non oritur. A right cannot arise from a wrong. 4 Bing. 639.

The main problem I have with this is that the government’s people committed the fraud. However, there are maxims of law including that no one may benefit by the fraud of another. What do you think?