State worker pleads guilty in $2.7 million fraud scheme at California Office of AIDS
An $87,000 state salary will only go so far, and certainly wouldn’t cover the lifestyle that prosecutors say a former manager in the state Office of AIDS lived as she bilked California taxpayers out of more than $2 million, then used the money for trips to Disneyland, concerts, Sacramento Kings tickets and other lavish expenses.
Just over a week after she was charged with wire fraud in federal court in Sacramento, Schenelle M. Flores pleaded guilty Thursday during a Zoom hearing before U.S. District Judge Troy L. Nunley, and agreed to cooperate with the prosecution and pay restitution of between $2 million to $3 million.
Prosecutors say in court papers that Flores took part in a scheme from December 2017 through November 2018 to “divert funds from the California Department of Public Health” along with others in Sacramento, Fresno and Orangevale, including one person who was an analyst at the Office of AIDS.
A health department spokeswoman said in a statement last week that CDPH cooperated in the federal probe, and that the case stemmed from an internal investigation launched after officials noticed “fiscal irregularities.”
Flores, 45, worked in the department for more than 26 years and later moved to the state’s Employment Development Department, according to Linkedin profiles and her statements in court Thursday.
Court documents say other unnamed individuals involved in the case included a person in Sacramento who purported to operate a consulting business and another who claimed to operate website services.
Two others individuals allegedly involved were the chief executive officer and chief financial officer of a Fresno company that had a CDPH contract to “provide services to the Office of AIDS, including distributing condoms and other harm reduction” supplies, court records say.
Those two individuals each earned salaries of $440,000 in 2018, court records say.
“The scheme involved directing a state contractor, Corporation 1, to make payments allegedly on behalf of the Office of AIDS, and having Corporation 1 charge those payments to the state pursuant to a contract between Corporation 1 and CDPH,” court documents filed with Flores’ plea agreement say. “Flores caused Corporation 1 to pay for personal expenses on its debit cards, order gift cards for personal use, and pay invoices to shell companies linked to her family and friends.
“The total loss attributable to this scheme was at least approximately $2.7 million.”
Court documents say Flores, who earned about $87,000 in 2018, according to Transparent California, used debit cards belonging to the unnamed corporation “for a variety of personal purchases.”
“Among the personal expenses that Flores incurred were season tickets to the Sacramento Kings, suite rentals for the San Francisco Giants, a luxury suite rental for the Oakland Raiders, a boat cruise rental for Flores’ daughter’s birthday party, parties at restaurants, tickets to see Jennifer Lopez, tickets to Disneyland, airplane tickets and other vacation expenses, 24Hour Fitness memberships, and Venmo and Square payments to herself and her family members,” court records say.
Flores could face up to 20 years in prison and a $250,000 fine, although she could end up with between 97 and 121 months if she cooperates with further investigation.
Flores faces sentencing May 27.
This story was originally published February 11, 2021 at 10:39 AM with the headline "State worker pleads guilty in $2.7 million fraud scheme at California Office of AIDS."