Roughly $600 million of the contract had been spent before authorities were alerted to the scandal, the source said, citing an internal report.
Only part of that money, however, is believed to have been diverted to "nefarious elements," the source added.
A Pentagon official told CNN the full $2.16 billion contract covered the movement and transportation of 70% of the material needed for U.S. troops in Afghanistan.
Officials were first alerted to the possibility of a scandal in June 2010, after a Congressional inquiry prompted the creation of a joint task force to investigate potential criminal dealings surrounding U.S. contracts.
The group gathered financial reports, prime and subcontract documents and other negotiations from between 2009 and 2010, prompting authorities to make major changes in their existing contract award and accounting system.
But much of the damage had already been done.
"There were indications dollars were flowing to criminals or to the enemy," sad the Pentagon official, who declined to be identified because he was not authorized to speak on the record but who has direct knowledge of the U.S. assessment.
The official said it appears some of the payments were given for truckers to be assured of safe passage through insurgent areas of Afghanistan. As has happened in other instances, trucking contractors paid off local drivers who then turned around and paid local security forces, who in turn paid insurgents in their areas.
The year-long investigation uncovered "nefarious" conduct in at least four of eight trucking companies the U.S. government uses to deliver food and supplies to soldiers and civilians in forward operating bases and other U.S. installations across Afghanistan.
The internal document -- which was first reported by The Washington Post -- identified the firms as either exclusively Afghan or as joint ventures with international companies.
CNN reporting comes from an independent source, familiar with the contents of the report.
The companies were later identified as "high-risk" firms, having subcontracted out to smaller entities without sufficient accounting measures, the source said.
In one instance, $7.4 million was transferred into the bank account of a "low-level police officer."
After a series of transactions, including multiple withdraws, officials then traced $3.3 million in weapons, explosives and cash transfers "to the enemy," the source said.
An small army of intelligence analysts, law enforcement officers, lawyers, auditors and forensic accountants mapped out an interlocking network of trucking contractors, and their dealings with dozens of subcontractors.
Some were only "profiteering," the source said, likely without a clear understanding of where some of the funds delivered.
The contract program, called Host Nation Trucking -- which expires in September -- has since been replaced by a more stringent system that requires up to 40 different contractors -- an effort to reduce overall reliance on a single firm.
The new program is also meant to tighten accounting measures of second and third party vendors, an area various groups had previously been able to exploit, the source said.
"When you have the extent of corruption we may have seen with these contracts, that's clearly not acceptable and they have to change the way they are doing business," Lisa Curtis, a senior fellow at the conservative Heritage Foundation, told CNN.
"But ... it's unrealistic to think something like this would not happen given the influence of the Taliban, the fact that they are intimidating the population every day," Curtis added.
Government officials are currently pursuing corrective actions against the trucking firms, including suspensions and limits on work, though all eight companies still remain on the U.S. payroll.
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