Johnny Grobman, others convicted in baby food fraud case

Three Florida residents face jail for the next 18 years in what federal prosecutors described as a $100 million fraud scheme that involved “fraud.”[ing] US manufacturer of infant formula, eye care products, and other FDA-regulated items.”

Johnny Grobman48, Raoul Doekhie53 and Sherida Nabi, 57, all described as hailing from South Florida, “secured deep discounts on infant formula and other items by lying to the US manufacturers of the products,” the US Department of Justice said in a press release. Each benefited tens of millions of dollars, the DOJ said.

The scheme, which lasted from 2013 to 2018, included allegations that the defendants shipped the products to a country on the coast of South America, the DOJ wrote. The Feds explained that the case concerned the so-called “grey market” — that is, “the diversion and resale of certain goods not intended for distribution in the United States.”

Here’s how they said the scheme expired:

Doekhie and Nabi (who are married) told the manufacturers that they were buying the products for shipment overseas to Suriname, often in connection with alleged government procurement contracts they had in Suriname. In fact, the defendants had no 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 divided among themselves.

The defendants hid their activities from US manufacturers of FDA-regulated products in one of three ways. The first was to send “dummy” shipments abroad. The dummy shipments did not contain the products purchased from the manufacturers, but they produced documents to prove an export had taken place. The second method was to “flip” the products: the products were shipped abroad, creating export documents. Once they arrived overseas, they were shipped back to the United States. The third method was to create fraudulent export shipping documents stating that the products were exported when in fact they never left the country.

Prosecutors bluntly formulated the scheme in a judgment note reviewed by Law&Crime.

“For over 12 years, the defendants have worked hard to defraud both large and small US companies,” the memo said. “The truth, in the form of an honest truck driver or a well-hidden GPS device, was their main obstacle. And for more than 12 years they had mostly succeeded.”

The sentencing note said the scheme was unraveled when in 2017 “a small organic food company discovered the defendants’ fraud after a freight forwarder reported that goods destined for Suriname were being delivered to a US customer’s warehouse instead.” .

According to the sentencing note, an email chain between two of the defendants suggested just how weak – but financially fruitful – the scheme really was.

“We’ve worked for more than 12 years with minimal problems, we should be lucky,” defendant Grobman allegedly told defendant Nabi in an email cited by prosecutors in their sentencing motion. “I understand that every time we lose a line it affects us all but that’s out of control having a driver speak, those are the kind of idiots that elected our current president.”

A state exhibition listing suggests the news was sent on February 13, 2017. That means she’s only been dating for a few weeks Donald Trump’s presidency. Trump took office on January 20, 2017.

In the sentencing note, prosecutors dismissed the extravagant lifestyles the defendants later led, citing Google photos of “a $9 million waterfront home in Golden Beach, a three-bedroom condo in Las Olas, another condo with three bedrooms in Rotterdam, luxury cars, private schools, international holidays and the 48-foot yacht “Grobman” sold in June as fruits of the program.

Prosecutors embedded this photo of Johnny Grobman

Prosecutors embedded this photo of Johnny Grobman’s mansion and yacht in a sentencing memorandum dated October 19, 2020.

“Doekhie previously admitted that his fraudulent venture had a net worth of $28,000,000.00,” the FBI also wrote in the sentencing note. “This exorbitant wealth was not earned; it was cheated.”

A federal jury found the trio guilty of the following crimes on February 6, 2020 after a 13-day trial: conspiracy to commit wire fraud; wire fraud; money laundering; conspiracy to acquire medical supplies before sale of $5,000 or more by fraud or deception, theft of medical supplies before sale; and smuggling goods from the United States.

The government argued that the sophisticated nature of the crimes called for harsh punishment.

A judge previously ordered the forfeiture of $87,187,374.83 against Grobman and $115,699,273.61 jointly against defendants Doekhie and Nabi, the DOJ said. The money can be collected against “criminal proceeds traceable to the offences”.

Additional restitution amounts are still up for debate and will be argued at a future hearing, the court filing said.

A number of government exhibits featured cans of baby food relevant to prosecutors.

A number of government exhibits featured cans of baby food relevant to prosecutors.

“The fraud committed by these defendants is nothing short of egregious,” the US Attorney said Juan Antonio Gonzalez of the Southern District of Florida. “The 18-year sentences reflect the seriousness of the defendants’ crimes. Our office will continue to vigorously prosecute those who commit these types of crimes.”

“Today’s announcement should serve as a reminder that those who fraudulently divert consumer goods for profit will be held accountable for their actions,” he said Justin C Fielder, the special agent in charge of the Miami Field Office of the FDA Office of Criminal Investigations. “We will continue to investigate and bring to justice those who engage in fraudulent schemes involving FDA-regulated products.”

The Broward County Sheriff’s Office was cooperating with the investigation, the FBI added.

Not all trial records or exhibits are publicly available in a federal court database. Some of the case files, including a superseding indictment, some photographic evidence, and the government sentencing memorandum mentioned above, are set out below:

[Image of Trump via Andrew Caballero-Reynolds/AFP/Getty Images; image of infant formula via a government trial exhibit.]

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https://lawandcrime.com/crime/defendant-sentenced-in-multi-million-dollar-baby-formula-fraud-scheme-blamed-the-trucker-morons-that-elected-donald-trump-for-his-undoing-documents/ Johnny Grobman, others convicted in baby food fraud case

Olly Dawes

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