Defence personnel are alleged to have stolen millions of pounds by paying expenses and wages to hundreds of "ghost soldiers", it has emerged. The Ministry of Defence is investigating the scam in which at least Â£2.5 million was reportedly siphoned off. The Mail on Sunday said the probe centred on the army's Adjutant General's Office in Britain which handles pay and expenses for tens of thousands of personnel. Have your say Â» It reported that the scam has been going on for several years and was uncovered in January after relatively low-paid soldiers were found to be spending huge sums on fast cars, lavish holidays and expensive homes. British servicemen and women in the UK and others stationed in Brunei were said to be involved. The alleged fraud was believed to involve payments to at least 650 imaginary troops, enough to form an entire regiment. Defence sources told the newspaper that a large number of suspects have been interviewed and hundreds of witnesses could be called at a court martial. An MoD spokeswoman said: "I can confirm that an investigation is being conducted by RMP Special Investigation Branch into an alleged fraud." Tory Homeland Security spokesman Patrick Mercer, a former infantry commander, called for Defence Secretary John Reid to take action. He said: "This sort of thing is immensely damaging to morale on the front line. While fighting soldiers are risking their necks every day, this type of scandal among the chaps they call the base-rats is exactly the sort of thing that erodes fighting spirit. Mr Reid must get a grip on this disgraceful situation at once." Looks like there might be more vacancies than expected on the next board guys!