LOS ANGELES– Four men from Southern California have been arrested on charges that they embezzled more than $8 million from an industrial launderer based in Gardena that provided finishing services for Citizens of Humanity, a manufacturer of high-end designer jeans.
Luis Mariano Rodriguez, 48, of East Los Angeles, the one-time president of CM Laundry, LLC, and three associates were taken into custody yesterday morning for allegedly causing the laundry to pay fraudulent invoices that contained fictitious and inflated charges, and concealed Rodriguez's role in the underlying transactions.
Since 2007, CM Laundry has been owned by Citizens of Humanity, LLC, a Huntington Park company that manufactures more than 1 million pairs of high-end denim jeans every year.
The other three defendants arrested yesterday by special agents with the FBI and officers with the Los Angeles Police Department are:
· Antonio Anguiano, 48, of Riverside, the owner of FI Products, which sold personal protective equipment;
· Terry Jay Mink, 62, of Rancho Palos Verdes, the owner of H&T Industrial Products, a hardware company that serviced CM Laundry; and
· Rene Exequiel Bautista, 43, of Sylmar, the owner of Valley Star Realty, which was used in the scheme under the fictitious business name “K&R Industrial Supplies.”
All four defendants made their initial appearances late yesterday afternoon in United States District Court in downtown Los Angeles. All four defendants were released on bond and were ordered to return to court for arraignments on February 1.
According to a criminal complaint filed on December 30, Rodriguez caused CM Laundry to pay more than $8 million after fraudulent invoices were submitted to the company.
“Mr. Rodriguez allegedly orchestrated a long-running scheme that took millions of dollars from his employer,” said United States Attorney Eileen M. Decker. “The scheme involved other defendants who also allegedly stole proceeds generated through fraudulently issued bills. All of these individuals must now face the criminal justice system for their criminal conduct.”
According to the affidavit in support of the criminal complaint, Anguiano, through his company, FI Products, billed CM Laundry for over $3.6 million during the period of the scheme, which allegedly ran from about May 2007 to about September 2013. During this period, FI Products transferred approximately $2.3 million to Rodriguez and his company, Genesis Electronics, Inc.
Mink, through his company, H&T Industrial Products, billed CM Laundry for over $5.5 million and transferred approximately $3.6 million to Rodriguez and Genesis.
Bautista, a real estate agent participated in this scheme through his company, K&R Industrial Supplies, which he established in 2012 at the behest of Rodriguez and was used to submit invoices from Genesis to CM Laundry. Over an 18-month period, K&R Industrial Supplies billed CM Laundry for approximately $640,000 and transferred approximately $493,000 to Rodriguez and Genesis. “Bautista admitted Rodriguez produced and submitted all of the K&R Industrial Supplies invoices that were submitted to CM Laundry and paid by Citizens,” according to the complaint affidavit. “Bautista stated [in a deposition related to a civil lawsuit] that he did not create any of the K&R Industrial Supplies invoices, did not know what any of the invoiced items were, and did not supply anything to CM Laundry.”
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
The complaint charges Rodriguez with three counts of mail fraud. The other three defendants are charged with one count of mail fraud. If they are convicted, each of the four defendants would face a statutory maximum sentence of 20 years in federal prison for each count.
As a result of civil litigation brought by CM Laundry and Citizens of Humanity, a Los Angeles Superior Court judge in November 2015 ordered Rodriguez and several other defendants to pay a total of $9,563,786, according to the criminal complaint.
The investigation into the embezzlement scheme was conducted by the Federal Bureau of Investigation and the Los Angeles Police Department, Major Crimes Division, Criminal Investigations Section.
USAO – California, Central Updated January 6, 2016
Central District of California DOJ / 16-001 / January 6, 2016