Last Of Five East Bay Contractors Sentenced In Mail Fraud Scheme
Defendant ordered released after serving 25 months in prison for conspiracy charge
OAKLAND – Kevin Laney was the last of five defendants sentenced for their respective roles in a mail fraud scheme, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The Honorable Yvonne Gonzalez Rogers, United States District Judge, sentenced Laney to the 25 months he had already served in prison for his role in the scheme.
Laney, 52, of Bozeman, Montana, pleaded guilty to the charge on August 15, 2019. Specifically, Laney admitted he conspired with Brian Federico, 54, of Tracy, Calif., to defraud Laney’s employer at the time, Matrix Service Company. The mail fraud scheme also was the subject of a two-week trial in September of 2019, at the conclusion of which a jury found Federico guilty of one count of mail fraud conspiracy and two counts of mail fraud.
According to documents submitted at trial, Matrix provides tank construction, maintenance and repair services to petrochemical companies. Federico was a project manager for Imperial Shotcrete, a company hired to perform concrete construction services as a subcontractor for Matrix. The evidence at trial showed that Matrix and the FBI uncovered a complex scheme that took place between 2007 and 2010, in Matrix’s Suisun City, Calif., office, where Laney worked as a Senior Project Manager.
As part of the scheme, Federico caused Matrix to pay fraudulent and inflated invoices to Imperial, with the proceeds of the scheme then being paid downstream to Laney and Federico. Federico created false and fraudulent invoices both by using the name and logo of a real company without its authorization, and by using bogus invoices from C.E.M.S., another company Federico controlled. Federico also instructed Laney and another Matrix Project Manager to submit fraudulent invoices from fake companies to Imperial, and persuaded his employer, Imperial, to pass those bogus charges onto Matrix for payment. Most of the funds that Matrix paid on the fraudulent invoices eventually were deposited into bank accounts that Federico controlled. Pursuant to his scheme, Federico defrauded Matrix of a total of $1,289,403, with more than $875,000 of the payments ultimately being deposited into bank accounts he controlled. After Matrix and the FBI uncovered the scheme, Matrix reimbursed its customers more than $1.3 million in charges they unwittingly passed on to their customers as a result of the fraud scheme.
Many of the fraudulent invoices Federico and Imperial submitted to Matrix were submitted for payment approval to Laney and another Matrix project manager, Brandon Hourmouzus. For his role in the scheme, Laney submitted fraudulent invoices totaling $1.01 million under the name of his fake company, Rogue Consultants, for work not performed. Those invoices were paid in full by Imperial, but only after it had successfully passed the costs onto Matrix, and been paid by Matrix. The scheme continued under a third Matrix Project Manager, Charles Burnette, who passed fake costs through Imperial and its owner, Miguel Ibarria, onto Matrix for payment
On December 6, 2012, a federal grand jury indicted Federico, Laney, and their co-defendants, charging each with various financial crimes related to the scheme. Hourmouzus, Burnette, and Ibbaria all pleaded guilty to conspiracy charges related to their respective role in the scheme. In addition, all three testified at Federico’s trial.
Federico, Laney and their co-defendants were sentenced as follows:
Conspiracy to Commit Fail Fraud, 18 U.S.C. § 1349
Mail Fraud,18 U.S.C. § 1341 (two counts)
|Sentenced 1/24/20 to 60 months in prison, three years of supervised release, a $50,000 fine, a $300 special assessment, and $1,287,000 in restitution.|
Conspiracy to Commit Mail Fraud, 18 U.S.C. § 1349
|Sentenced 2/27/20 to time served of 25 months in prison, one year of supervised release, a $100 special assessment, and restitution to be determined.|
|Conspiracy to Commit Fail Fraud, 18 U.S.C. § 1349||Sentenced 10/08/2015 to three years and six months probation, $100 special assessment, and $196,410 restitution.|
38/Aliso Viejo, California
|Conspiracy to Commit Fail Fraud, 18 U.S.C. § 1349||
Sentenced 09/11/2014 to five years’ probation, $100 special assessment, and $145,149 restitution.
|Conspiracy to Commit Fail Fraud, 18 U.S.C. § 1349||Sentenced 12/15/15 to four years’ probation, and a $100 special assessment.|
Judge Gonzalez Rogers concluded that both Federico and Laney were deserving of sentencing enhancements for using sophisticated means to accomplish the illegal goals of the conspiracy. Federico also received a sentencing enhancement for being the leader organizer of the conspiracy, and Laney received a sentencing enhancement for abusing the trust of his employer, Matrix.
Judge Gonzalez-Rogers ordered the parties to return to Court on April 2, 2020, for a further hearing regarding restitution.
Assistant U.S. Attorneys Thomas R. Green and Jonathan U. Lee are prosecuting this case with the assistance of Jessica Rodriguez Gonzalez, Tina Rosenbaum, and Noble Hughes. This prosecution is the result of an investigation by the Federal Bureau of Investigation.