In October, former Capt. Lee W. Dubois pleaded guilty to helping steal $39.6 million in fuel from the Army's Camp Liberty in Iraq and selling it on the black market -- a scheme that netted him at least $450,000.
And two senior Army officers were convicted in November in the Hillah case, which began with the disappearance of nearly $2 million in reconstruction money.
A Defense Department review of the program -- which gives field commanders an arsenal of cash to help build community relief projects, aid families and pay civilian security forces -- found in 2007 that all 15 pay agents surveyed who handled cash in Afghanistan did not have "appropriate physical security" for storing the money. No instances of theft were found.
The audit also found that disbursement officers did not always use the correct exchange rate when doling out local currency. Manipulating the exchange rate, authorities allege, was how Gilliam amassed cash.
"If people that know the system and how it operates decide to commit a fraud, it is very difficult to detect," said David Warren, audits director for the Office of the Special Inspector General for Iraq Reconstruction. "Because they are the people that are in essence the control system that is in place."
Through the end of last year, $3.5 billion had been pumped into the Commander's Emergency Response Program, an attempt to use humanitarian aid and community reconstruction projects to combat the Iraqi insurgency.
The program also has allowed coalition commanders to hire Sunni Arab gunmen, often former insurgents, as security officers with the U.S.-allied forces known as the Sons of Iraq.
During Nguyen's tenure with the 4th Stryker Brigade combat team in Muqdadiya, in Diyala province, where he helped oversee disbursement of emergency response program funds, the program paid for $68,000 in school supplies as well as a new municipal garage and renovations to the market, courthouse and hospital.
The farming hamlets and date-palm groves of the Diyala valley, where Al Qaeda fighters had set up strongholds after largely being driven out of Anbar province, had become among the toughest enclaves of the insurgency.
"We were called in because the situation was so bad in Muqdadiya and we had lost so many soldiers out of it," said Command Sgt. Maj. Gregory Frias, who served in Nguyen's unit.
