Schenelle M. Flores, 46, of Sacramento, was sentenced to five years and 10 months in prison and ordered to pay over $2 million in restitution for organizing a scheme to divert funds from the California Department of Public Health, U.S. Attorney Phillip A. Talbert announced. She was ordered to begin serving her sentence on May 18, 2022.
According to court documents, Flores used her employment at the Office of AIDS, within the California Department of Public Health, to coordinate the fraud scheme between December 2017 and November 2018. The Office of AIDS is responsible for working on behalf of the State of California to combat the HIV and AIDS epidemic. Flores’s scheme involved directing a state contractor to make payments allegedly on behalf of the Office of AIDS and causing the contractor to charge those payments to the state. As part of the scheme, Flores 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. Flores, other participants in the scheme, and their families and friends obtained at least $2 million in personal benefits, including cash, luxury suites at sports games, and vacations.
This case is the product of an investigation by the Federal Bureau of Investigation and was referred by the California Department of Public Health and the California Highway Patrol. Assistant U.S. Attorneys Miriam R. Hinman and Christopher S. Hales are prosecuting the case.
Another former state employee, Christine M. Iwamoto, 47, of Sacramento, pleaded guilty on Oct. 28, 2021, to wire fraud and conspiracy to commit money laundering in a related case, United States v. Iwamoto, 2:21-cr-193-TLN. Iwamoto is scheduled to be sentenced by U.S. District Judge Troy L. Nunley on April 7, 2022. For the wire fraud count, Iwamoto faces a maximum statutory penalty of 20 years in prison and a fine of $250,000 or twice the gross gain or loss, whichever is greater. For the count of conspiracy to commit money laundering, Iwamoto faces a maximum statutory penalty of 20 years in prison and a fine of $500,000 or twice the property involved in the transactions, whichever is greater. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.