A former sergeant’s rideshare scam cost the Army millions

A retired Army sergeant who used his rideshare company to con the Army out of millions was sentenced to 36 months in prison on June 11.

Kevin Romulus Pelayo, 45, and his wife Cristine Furio Fredericks, 40, illegally obtained social security numbers along with other identifying information of more than 800 soldiers and submitted them from 2014 to 2020 to the Army’s Mass Transportation Benefit Program without the soldiers’ knowledge.

Pelayo and Frederick’s company Soldier Vanpools, LLC, received millions of dollars in funds from the program over the course of those six years in exchange for the false claim that the soldiers were using their service for transportation to and from Fort Cavazos, Texas, according to court documents. According to Stars and Stripes , Pelayo was a platoon sergeant at Fort Cavazos.

The Mass Transportation Benefit Program subsidizes transportation costs for soldiers and civilian employees.

In 2019, Pelayo routinely paid a criminal confidant for personal information about hundreds of soldiers that he would then use to fraudulently enroll them in the Mass Transportation Benefit Program, according to court documents.

Pelayo and Fredericks used their earnings to stockpile vans, SUVs, and other vehicles to create the illusion that their business was legitimate and engaged in the shepherding of large amounts of soldiers to and from the military base.

But the couple didn’t only invest in their company.

They spent lavishly on themselves as well.

“The couple spent a large portion of the millions of dollars in funds they received on real estate, personal vehicles, and other property,” according to the Department of Justice .

They amassed a treasure trove of extravagant items, including 43 vehicles, 129 purses and pieces of jewelry, and 12 properties.

Pelayo pled guilty to defrauding the Army on June 29, 2021, and the couple agreed to turn over a majority of the criminally earned possessions.

Fredericks was sentenced to five years of probation.

The IRS Criminal Investigation and the Department of the Army Criminal Investigation Division led the investigation.