A trio of Florida residents was recently sentenced to federal prison for their part in a $200 million fraud for a 9-year conspiracy relating to baby powder before the current shortage of supply.
On Friday, U.S. District Court Judge Roy K. Altman sentenced South Florida residents Raoul Doekhie, 53, Johnny Grobman, 48 and Sherida Nabi, 57, each for 18 years . He sentenced them to get rid of over $200 million in illicit earnings. The three utilized money from the baby formula sales to get hold of a $9 million mansion in Florida, a 48-foot yacht, and other real estates outside the United States.
The three men allegedly told U.S. infant formula producers that they had a government tender to buy the goods on behalf of Suriname, a poor country in South America, convincing them to sell them at steeply discounted rates, with discounts as high as 60%, according to federal prosecutors in the United States District Court for the Southern District of Florida
Instead of sending the product to Suriname, the three made a fortune selling the goods in America for face value.
The jury found Doekhie, Grobman, and Nabi guilty of criminal conspiracy to commit wire fraud; money laundering; conspiring to deceive consumers by getting hold of pre-sale medical products amounting to $5,000 or more through deception or fraud; stealing of pre-sale medical products, and smuggling goods from the United States
After two weeks of the conclusion of the trial, Grobman subsequently requested another trial, which Judge Altman denied.
The defense attorneys are yet to comment on the issue. The three were arrested this week, according to court records. However, the reason for the sentencing’s delay more than two years after the convictions were not given.
How the plan worked
The group offered steep reductions to the injured businesses by promising to re-distribute products in Suriname but planned to sell those items at a significant markup in the United States, a diversion-style business practice.
Court records indicate that Doekhie and Nabi, who are married, established a corporation named Tropical Marketing & Distribution N.V. in Suriname. The couple created a website for a fictitious entity called the Suriname Tender Office to “back their false claim that they had won a tender from the government for the competitor’s businesses’ goods,” according
Grobman was also the manager of Nutrisource I LLC, J Trading LLC, and Vejota Holdings LLC, according to documents from the Florida Department of State. The same principal address in Aventura, Florida is shown for all three firms.
According to court documents, the three concocted purchase orders, covertly carried goods abroad and then returned them immediately, a practice known as U-turning, filling fake cargo containers with sheetrock and forging export papers.
After the goods were returned to the United States, court papers show that Grobman submitted fraudulent shipping papers to US Customs personnel.
In exchange for cooperating with the government against Doekhie, Nabi, and Grobman, a fourth man named Edgar Torres was sentenced to 25 months in prison. He served as president and registered agent of Le Mare Transport, a freight forwarding firm in Medley, Florida.
Torres said they planned to exchange the cargo containers’ baby formula with sheetrock that weighed the same as the product they were supposed to export to Suriname during trial testimony. They would utilize a special machine to remove the etched cargo seals, which infant formula manufacturers installed to prevent tampering, to avoid detection by customs officials and victim firms, as per court records.
Grobman and Torres would allegedly sell the infant formula through their firms in the United States, then share the profits with Doekhie and Nabi.
The scam started to unravel in 2017 when one of the manufacturers refused to do business with the group because of potential delays with their products.
“These defendants’ fraud is nothing short of reprehensible,” said U.S. Attorney Juan Antonio Gonzalez in a statement. “The lengthy prison sentences served by the co-conspirators reflect their culpability.”