I have handled dozens of BAH (basic allowance for housing) fraud (also sometimes called BAH theft) cases over the years. They come in several varieties including:
a) sham marriages (a marriage for the sole purpose of getting BAH or an increase in BAH)
b) the member divorces but never updates his dependent application with personnel
c) the member submits a fake lease indicating family is residing in a high BAH locality, or doesn’t update an address, in order to receive the higher BAH
There are two theories to prosecute BAH fraud under, and like all financial crimes cases, neither are for novices. They are a wrongful taking or a wrongful withholding. Sometimes a case may be a combination of both. All cases rely heavily on documentation. But this post is not about defending against these charges, which again is not something to be left to the novice JAGs.
I want to highlight what happens with regard to the money that the military believes the member stole. There are two mechanisms that the military seeks to recover the money – the first is to establish a debt owed to the federal government. The second is to pursue a fine or restitution through a judicial process, like a court-martial.
Over and over again, there are issues with the debts established by personnel departments. When personnel learns of a BAH fraud case, they often quickly, and retroactively, attempt to update old records thus recalculating BAH rates. The resulting debt then lands on the LES and DFAS takes control, often leaving a member with no income for months. The problem is that personnel departments don’t investigate and are trigger happy with this stuff. For example, I have seen a PSD attempt to recoup all BAH and when the actual allegation only related to BAH with and BAH without dependents – BAH differential, which was a few hundred dollars a month. The member was always entitled to single BAH. But once the debt gets to DFAS, it must be contested, and the burden shifts to the member to show why the debt is inaccurate.
Fines or restitution are often the most accurate way to capture the numbers involved in BAH fraud case. Attorneys can review and litigate the actual monetary amount based on all available evidence to both the member and the government. And, if the parties cannot agree, then the judge (or members panel) can decide the amount.
While a judicial determination is more accurate, it doesn’t mean that DFAS will back down. In United States v. Dean, a 2016 Navy-Marine Corps Court of Criminal Appeals (NMCCA) case, the court reviewed a case where the accused’s commanding officer (the convening authority), on behalf of the Marine Corps and United States, entered into a pretrial agreement with the following provision in a BAH theft case:
NMCCA set aside everything – the findings of guilty and the pretrial agreement, but, most importantly, stated:
We lack authority to order the alternate relief that the appellant requests — to compel the CA to mark the debt as “paid-in-full” retroactive to the date of trial.
But where does this leave the accused? He has paid reconstitution and NMCCA just authorized a rehearing, meaning he can be tried again. And the CA is not bound by the prior agreement and likely will not reenter into something he cannot enforce! My prediction – either the CA will say “the hell with it” and let it slide knowing that DFAS will get more than enough money out the Marine or the CA will retry the Marine and the Marine will end up worse-off than had he never appealed the case.
So how do you avoid this pitfall if you are charged with BAH fraud/theft? Hire an experienced military justice attorney like Patrick Korody who understands how these debts work so you don’t get screwed by the system!
Attorney and Navy JAG Veteran Patrick Korody was certified as a Specialist in Military Justice Litigation by the Judge Advocate General of the Navy. He has a law practice in Jacksonville, FL and handles cases worldwide. He offers a free consultation and can be reached at 904.383.7261.