LEGAL
Man Who Embezzled From Citizens of Humanity Pleads Guilty
The man who oversaw a scheme to embezzle $8 million from a commercial laundry house owned by Citizens of Humanity pleaded guilty to federal charges, according to the U.S. Attorney’s office.
Luis Mariano Rodriguez, 49, of East Los Angeles, who was the one-time president of CM Laundry LLC, pleaded guilty to one count of mail fraud on March 21. He is scheduled to be sentenced on June 20 and faces a statutory maximum sentence of 20 years in federal prison.
In U.S. District Court, Rodriguez admitted that he and three other businessmen participated in a scheme that submitted fake invoices to CM Laundry, acquired by Citizens of Humanity in 2007. CM Laundry paid the bogus bills, with the proceeds being shared by the four men, the U.S. Attorney’s office in Los Angeles said.
According to court documents, the invoices sent to CM Laundry were fraudulent in at least two ways. First, the invoices included fictitious and inflated charges, and the invoices were issued by companies operated by Rodriguez’s associates, which helped conceal Rodriguez’s role in the scheme.
The laundry, in Gardena, Calif., does the various washes for Citizens of Humanity, the high-end denim company based in Huntington Park, Calif. Citizens was started in 2003 by blue-jeans designer Jerome Dahan, one of the founders of 7 For All Mankind.
Rodriguez admitted he sent e-mails to two of his codefendants, who gave them detailed instructions on what information to include on each of the fraudulent invoices that were submitted to CM Laundry. A third associate allegedly established a fictitious business name under K&R Industrial Supplies. Rodriguez allegedly used this fake business name to submit other fictitious and inflated invoices to CM Laundry.
“This defendant victimized the very business that had entrusted him to lead it,” said U.S. Attorney Eileen M. Decker in a statement.
Rodriguez admitted that FI Products, an industrial supply company in Riverside, Calif., billed CM Laundry for more than $3.6 million and transferred about $2.3 million of the proceeds back to him and one of his companies, Genesis Electronics Inc.
Another company, H&T Industrial Products, owned by another co-schemer, billed CM Laundry for more than $5.5 million and transferred approximately $3.6 million to Rodriguez and Genesis, according to court documents.
Fraudulent bills from K&R Industrial amounted to approximately $539,939, of which about $493,617 was transferred to Rodriguez, court documents said. As he admitted in court, Rodriguez kept approximately 75 percent of the proceeds generated by the false-invoice scheme.
In related proceedings, Terry Jay Mink, 62, of Rancho Palos Verdes, Calif., the owner of H&T Industrial Products, pleaded guilty to conspiracy to commit mail fraud on Feb. 22. He is scheduled to be sentenced May 16 and faces a statutory maximum sentence of five years in prison.
Rene Exequiel Bautista, 43, of Sylmar, Calif., the owner of K&R Industrial Supplies, has agreed to plead guilty to one count of conspiracy to commit mail fraud. Bautista has been arraigned and is expected to enter his guilty plea in coming weeks.
The fourth man involved, Antonio Anguiano, 43, of Riverside, Calif., the owner of FI Products, which sold personal protective equipment, was indicted by a federal grand jury on March 4.
The indictment charges him with five counts of mail fraud and two counts of aggravated identity theft. Anguiano has pleaded not guilty and a trial is set for April 26.
As a result of civil litigation brought by CM Laundry and Citizens of Humanity, a Los Angeles County Superior Court judge last November ordered Rodriguez and several other defendants to pay nearly $9.6 million to the laundry and blue-jeans manufacturer.
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.
