Baby formula turned into big bucks for three Florida residents who concocted a fraudulent $100 million scheme to “cheat U.S. manufacturers of infant formula, eye-care products, and other FDA-regulated items.”
The trio “secured deep price discounts for infant formula and other items by lying to the U.S. manufacturers of the products,” a Friday press release from the U.S. Department of Justice (DOJ) noted.
They also secured an 18-year federal prison sentence from a federal district judge in Miami.
Johnny Grobman (48), Raoul Doekhie (53), and Sherida Nabi (57) conspired to foil manufacturers of the products between 2013 and 2018. A forfeiture money judgment was issued by the court on April 25, 2022, for more than $87 million against Grobman and over $115 million against Doekhie and Nabi.
The DOJ explained that “Doekhie and Nabi (who are married) told the manufacturers that they were purchasing the products to ship overseas, to Suriname, often in connection with purported government procurement contracts they held in Suriname. In fact, the defendants did not have government procurement contracts and never intended to export the products to Suriname.”
“Instead, Grobman and others sold the products in the United States for millions of dollars, which the three defendants later split among themselves,” they said.
There were three methods the baby formula bandits hid their illegal activity on the “gray market” – which is code for selling goods that aren’t intended for sale in the United States.
First, they concocted fake shipments of the formula that didn’t actually contain the illicit goods but generated documents that appeared that the export occurred.
The second was to actually ship the formula out of the country and then “U-turn” it and ship it right back, again generating believable export documentation.
The third way was to manufacture the documentation without having the product ever leave American soil.
What amazes me is that people sit around and actually think up these schemes. I have spend 0 time thinking of ways to defraud the government.
— Live a Good Story. (@deb_grojean) May 21, 2022
They almost got away with it, save just one truck driver who voted for President Donald Trump.
“For 12 years+, the Defendants worked hard at defrauding U.S. businesses both large and small,” a sentencing memo read. “The truth, in the form of an honest truck driver or a well-hidden GPS device, was their primary obstacle. And for 12 years+, they mostly succeeded.”
The jig was up in 2017 when “a small organic food company discovered the Defendants’ fraud after a carrier reported that goods intended for Suriname were instead being delivered to a U.S. customer’s warehouse.”
“We have worked 12 years+ with minimal issues, we should be fortunate about it,” an email sent on Feb 13, 2017, from one of the alleged crooks to another read according to the request for sentencing. “I understand every time we lose some line, it affects us all, but this is out of control, that a driver talks, these are the kind of morons that elected our current president.”
Former President Trump was inaugurated on Jan 20, 2017.
The prosecutors blasted the defendant’s luxury lifestyle in the sentencing memo where they provided photos of “a $9 million waterfront home in Golden Beach, a three-bedroom condominium on Las Olas, another three-bedroom condominium in Rotterdam, luxury cars, private schools, international vacations, and the 48-foot yacht Grobman sold in June”
“Doekhie previously admitted that his fraudulent company had a net worth of $28,000,000.00,” the memo said. “This exorbitant wealth was not earned; it was swindled.”
U.S. Officials denounced the criminals and vowed to “vigorously” prosecute similar crimes.
“Today’s announcement should serve as a reminder that those who fraudulently divert consumer products for profit will be held accountable for their actions,” said Special Agent in Charge Justin C. Fielder, FDA Office of Criminal Investigations Miami Field Office. “We will continue to investigate and bring to justice those who engage in fraudulent schemes involving FDA-regulated products.”
“The fraud perpetrated by these defendants is nothing short of egregious,” said U.S. Attorney Juan Antonio Gonzalez. “The 18-year prison sentences reflect the seriousness of the defendants’ crimes. Our Office will continue to vigorously prosecute those who commit these types of offenses.”
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