Butte County Man Sentenced To 33 Months In Prison For National Guard Recruiting Fraud
SACRAMENTO, Calif. —Steel A. Davis, 45, of Chico, was sentenced today by United States District Judge Troy L. Nunley to 33 months in prison for a scheme to obtain bonuses for referring individuals to enlist in the California National Guard, U.S. Attorney McGregor W. Scott announced.
On January 29, 2018, after an eight-day trial, a federal jury found Davis guilty of eight counts of wire fraud.
“Those who receive funds from the government have a duty to follow the law,” said Frank Robey, the director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit. “This verdict should put those attempting to defraud the U.S. government on notice that there will be consequences for their actions. Our organization and our law enforcement partners will continue to pursue those who erode the rule of law in order to exploit others for their own greed.”
“During his time as a California Army National Guard Recruiter, Steel Davis betrayed public trust by conspiring with others to illegally obtain thousands of dollars in bonus money and kickbacks” said Special Agent in Charge Sean Ragan of the FBI Sacramento field office. “The FBI is committed to working with its investigative partners to identify and vigorously pursue those who engage in public corruption and government fraud.”
According to court documents and evidence presented at trial, the United States Army contracted with a company called Document and Packaging Broker Inc. (DOCUPAK) to administer the Guard Recruiting Assistance Program (G-RAP). Under G-RAP, members of the California National Guard served as Recruiting Assistants. If a Recruiting Assistant referred a potential Guard member to a recruiting office and that person ultimately enlisted, the Recruiting Assistant was eligible to receive a $1,000 payment when a person enlisted and a second $1,000 payment when the recruit left for boot camp.
Davis was a recruiter with the California National Guard and was ineligible to participate in the G-RAP program. However, realizing the potential to make money through G-RAP, Davis gave recruits’ information to his co‑conspirators who had signed up to be Recruiting Assistants. The RAs would then file false claims with DOCUPAK that they had referred the recruits to join the Guard when, in fact, the recruits had joined on their own initiative. When the compensation was received, Davis split the proceeds of the fraud with the Recruiting Assistants.
This trial was the fourth and final trial derived from a multi-agency investigation by the Army Criminal Investigative Command Major Procurement Fraud Unit, the Defense Criminal Investigative Service, and the Federal Bureau of Investigation that began in 2012. In total, 10 former soldiers across the Fresno and Sacramento divisions of the Eastern District of California were convicted of criminal charges for abusing the GRAP program. Separate from the criminal cases, other soldiers agreed to repay bonuses as part of civil settlements with the United States.
This case was the product of an investigation by the Army Criminal Investigation Command Major Procurement Fraud Unit, the Defense Criminal Investigative Service, and the Federal Bureau of Investigation. Assistant United States Attorneys Matthew G. Morris and Katherine T. Lydon prosecuted the Sacramento cases, and Assistant United States Attorney Michael G. Tierney and Trial Attorneys Alexis J. Loeb and Jacklin Chou Lem prosecuted the Fresno cases. Assistant United States Attorney Vincente Tennerelli represented the United States in civil recovery efforts.
Other National Guard members and recruiters have been charged in similar schemes in the Eastern District of California.
- 1:14-cr-109-LJO — Jimmy D. Maldonado, 37, and Mayra L. Maldonado, 31, both of Fresno, were convicted on January 29, 2018, after a jury found them guilty of three counts of wire fraud. On May 21, 2018, Jimmy Maldonado was sentenced to six months in prison, and Mayra Maldonado was sentenced to five years of probation.
- 2:14-cr-153 TLN — Brian Kaps, 44, of Chico, pleaded guilty on November 21, 2014, to one count of wire fraud. He is scheduled to be sentenced on May 31, 2018.
- 2:14-cr-152 TLN — Sarah Nattress, 30, of Paradise, pleaded guilty on October 23, 2014, to one count of wire fraud. She is scheduled to be sentenced on May 31, 2018.
- 2:18-cr-012 TLN — Jason M. Hair, of Paradise, pleaded guilty on January 18, 2018, to one count of wire fraud and one count of making false statements. He is scheduled to be sentenced on July 12, 2018.
- 1:14-cr-107 DAD — Leonardo Pesta, 49, of Mountain View, pleaded guilty on July 27, 2015, to one count of wire fraud and was sentenced to two years of probation.
- 1:14-cr-108-LJO — Nicholas Huerta, 36, of Fresno, pleaded guilty on September 14, 2015, to one count of wire fraud and was sentenced to four years of probation.
- 2:14-cr-151 JAM — Richard C. Sihner, 55, of Elk Grove, was convicted on January 22, 2016, of 18 counts of wire fraud and one count of making false statements following a seven-day jury trial and was sentenced to 30 months in prison.
- 1:14-cr-106 DAD — Joaquin Cuenca, 40, of San Diego, was convicted on February 1, 2016, of three counts of wire fraud and one count of making false statements following a seven-day jury trial. He was sentenced to six months in prison.