Fresno, California - Monday, after a seven-day trial, a federal jury found Joaquin Cuenca, 38, of San Diego, guilty of three counts of wire fraud in a scheme to fraudulently obtain bonuses in a recruitment program for the California National Guard, United States Attorney Benjamin B. Wagner announced.
According to evidence produced at trial, Cuenca was a full-time recruiter for the California National Guard in Fresno and defrauded a military recruiting program out of thousands of dollars. The program, the Guard Recruiting Assistance Program (G-RAP), offered a financial incentive to members of the National Guard and others (called Recruiting Assistants, or RAs) who nominated new soldiers. If an RA referred a potential Guard member to a recruiting office and that person ultimately enlisted, the RA was typically eligible to receive $1,000 when a nominee enlisted and $1,000 more when the nominee left for basic training. Because the point of the program was to encourage other soldiers to join in the recruiting effort, G‑RAP incentives were not available for soldiers employed by the Guard as recruiters. Ultimately, G-RAP was discontinued following the discovery of widespread fraud.
According to court documents and evidence presented at trial, Cuenca, was a recruiter and not eligible for bonuses through G-Rap. However, he fed information about new recruits to soldiers who were eligible for G-RAP. Those soldiers (or Cuenca himself) then would enter the information about the new solder online and claim a bonus even though the RA had not in fact referred the new soldier at all. Cuenca would often receive a portion of the bonuses.
“Cuenca joins the ranks of others who have been brought to justice for defrauding G‑RAP and the Army National Guard,” said U.S. Attorney Wagner. “Cuenca and his co-schemers discovered a natural flaw in the program and exploited it. The U.S. Attorney’s Office will continue to uncover and prosecute fraud and abuse of taxpayer money.”
“Joaquin Cuenca's greed and criminal activity permanently tarnished his military career and disrespected the sacrifice of the many men and women who serve our country with honor,” said FBI Special Agent in Charge Monica Miller of the Federal Bureau of Investigation Sacramento field office. “We thank Army Criminal Investigative Command for their continued partnership, ensuring criminals face justice when they allow greed to eclipse their duty to fellow serve members and the American people.”
Chris Hendrickson, Special Agent in Charge of the Western Field Office, Defense Criminal Investigative Service, said: “Corruption strikes at the heart of good government and erodes public trust. The investigation of these offenses is a top priority for the DCIS, its investigative partners, and the U.S. Attorney's Office. Today's verdict demonstrates that there is zero tolerance for this type of shameful misconduct.”
"When individuals fail to live up to the values of the U.S. Armed Forces, they should be held accountable," said Maj. Gen. David S. Baldwin, California's Adjutant General. "We applaud the U.S. Attorney's Office and the law enforcement community in helping us keep the Cal Guard a force of which our communities can be proud."
Cuenca is the second person to be convicted in this district in the last 10 days in connection with fraud with G-RAP. On January 22, 2016, Richard Sihner, 54, of Elk Grove was convicted by a jury in Sacramento of 18 counts of wire fraud and making false statements.
Cuenca is scheduled to be sentenced by United States District Judge Dale A. Drozd on May 16, 2016. Cuenca faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for each count of wire fraud. 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.
This case is the product of an ongoing investigation by the Army Criminal Investigative Command Major Procurement Fraud Unit, the Defense Criminal Investigative Service, and the Federal Bureau of Investigation. Assistant United States Attorney Michael Tierney and Department of Justice Trial Attorney Alexis Loeb are prosecuting the case.
Other National Guard members and recruiters have been charged in similar recruiting‑fraud schemes in the Eastern District of California. The following defendants have pleaded guilty and await sentencing.
2:14-cr-153 TLN — Brian Kaps, 42, of Chico, pleaded guilty on November 21, 2014, to one count of wire fraud. Sentencing is set for February 4, 2016.
2:14-cr-152 TLN — Sarah Nattress, 28, of Paradise, pleaded guilty on October 23, 2014, to one count of wire fraud. A status conference for sentencing is set for February 4, 2016.
1:14-cr-107 DAD — Leonardo Pesta, 47, of Mountain View, pleaded guilty on July 27, 2015, to one count of wire fraud. Sentencing is set for April 26, 2016.
1:14-cr-108-LJO — Nicholas Huerta, 33, of Fresno, pleaded guilty on September 14, 2015 to one count of wire fraud. Sentencing is set for November 14, 2016.
2:14-cr-151 JAM — Richard C. Sihner, 54, of Elk Grove, was found guilty of 18 counts of wire fraud and one count of making false statements. Sentencing is set for May 3, 2016.
Charges are pending against the following (the charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt):
2:15-cr-005 TLN — Steel A. Davis, 43, of Paradise, was charged with eight counts of wire fraud on January 8, 2015. A status conference is set for February 4, 2016.
1:14-cr-109 LJO — Jimmy Maldonado, 35, a recruiter, and his wife Mayra Garcia Maldonado, 29, a recruiting assistant, both of Fresno, are allegedly responsible for causing $40,000 in fraudulent bonuses. Trial is scheduled for May 3, 2016.