Wednesday, February 21, 2024

Former State Employee Sentenced to 12 months in Prison for Role in $2 Million Scheme to Defraud the Office of AIDS

SACRAMENTO — Yvonne Gaide, 61, of Orangevale, was sentenced today to 12 months and one day in prison and ordered to pay $472,717 in restitution for wire fraud in relation to a scheme to divert funds from the California Department of Public Health, U.S. Attorney Phillip A. Talbert announced.

According to court documents, Gaide was employed as an analyst for grants and fiscal matters in the Office of AIDS within the California Department of Public Health in Sacramento. The Office of AIDS is responsible for working on behalf of the State of California to combat the HIV and AIDS epidemic.

Between December 2017 and November 2018, Gaide participated in a fraud scheme along with Schenelle Flores, 47, and Christine Iwamoto, 59, both former Office of AIDS employees from Sacramento. In total, the participants in the fraud scheme obtained at least $2 million in personal benefits, including cash and purchased items.

According to court documents, as part of the scheme, Flores directed a state contractor to make payments allegedly on behalf of the Office of AIDS and to charge those payments to the state. In reality, those payments benefitted Gaide, Flores, Iwamoto, and others personally rather than the Office of AIDS. For example, Gaide, Flores, and Iwamoto caused the contractor to pay for personal expenses on its debit cards, order gift cards for personal use, and pay false invoices to shell companies for services allegedly provided to the Office of AIDS. This included, among other things, $450,000 in phony invoices submitted by Iwamoto for a shell company that she had created to defraud the state, which Gaide and Flores then helped ensure would be paid. After the invoices were paid, Iwamoto shared the proceeds with Gaide by meeting in person to give Gaide cash, as well as giving Gaide blank checks that she could write out of the phony company’s bank account.

Gaide personally gained over $70,000 from the scheme including the following:

• $19,217 from personal fraudulent use of the state contractor’s debit cards, including for Disneyland, Universal Studios, Ruth’s Chris Steakhouse, and apparel and home items;

• $20,000 to $25,000 (at least) in cash from Iwamoto in person, after helping process fraudulent invoices from Iwamoto’s fake shell company;

• $29,090 in checks written by Gaide out of the fake shell company’s bank account that Gaide knew housed fraud proceeds; and

• $3,500 in gift cards purchased by the state contractor and charged to a contract with the Office of AIDS that Gaide obtained for her personal use.

This case was the product of an investigation by the Federal Bureau of Investigation with assistance from the California Department of Public Health and the California Highway Patrol. Assistant U.S. Attorney Christopher S. Hales prosecuted the case.

On March 3, 2022, Flores was sentenced to five years and 10 months in prison and ordered to pay over $2 million in restitution in a related case, United States v. Flores, 2:21-cr-025.

On April 7, 2022, Iwamoto was sentenced to two years in prison and ordered to pay $481,200 in restitution in a related case, United States v. Iwamoto, 2:21-cr-193.

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