Crime

Office of AIDS employee charged with money laundering, wire fraud for allegedly diverting public health funds

SACRAMENTO, Calif. — An employee at the California Department of Public Health’s Office of AIDS in Sacramento has been charged with wire fraud and money laundering charges for allegedly working with several others to divert $2 million in department funds.

Christine M. Iwamoto has been charged with wire fraud and conspiracy to commit money laundering, both federal offenses that could land her behind bars for 40 years in total. She could also be fined up to $750,000.

According to court papers, Iwamoto and her manager, Schenelle Flores, allegedly concocted a scheme, beginning in 2017, to swindle the CDPH out of money by having a company in Southern California bill the Office of AIDS for various personal expenses they ran up. Flores pleaded guilty in February to wire fraud stemming from the same allegation, and has since been cooperating with authorities.

The expenses the women allegedly incurred included tickets to sports games, concerts, and events, as well as gift cards, payments to family and friends, and personal travel. Iwamoto is accused of operating several shell companies disguised as web service consulting firms, which she used to send invoices to the Office of AIDS for work that authorities say never happened.

Flores and Iwamoto, in order to obtain the gift cards from the SoCal business, allegedly told them the cards were to be used for patient incentives by the Office of AIDS, but instead kept them for themselves.

Iwamoto allegedly opened an email account under the name of Patricia Roberts, with which she sent statements to the Office of AIDS requesting proceeds for the purported work done under the alleged shell consulting firm. The money was then distributed between Iwamoto and her co-conspirators.

Officials have ordered Iwamoto to surrender the money she allegedly stole from the CDPH, and she has since been released on a $25,000 bond. Records show she pleaded not guilty on the 15th and is scheduled to return to court on October 28th for a change of plea hearing, suggesting she may strike up an agreement with the government.

Iwamoto’s lawyer, Raul J. Severo, did not return a request for comment.

Ethan Biando
Ethan Biando is a freelance journalist from Sacramento. His writing focuses on crime and justice as well as issues of racial inequality. Find him on Twitter @ethanb822.

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    1. […] The Update previously reported, the former analyst was accused to orchestrating a fraud scheme with a fellow employee, Schenelle […]

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