U.S. Department of Justice
United States Attorney
District of Kansas NEWS RELEASE

Eric Melgren, U.S. Attorney

Contact: Jim Cross
Phone: (316) 269-6481

FOR IMMEDIATE RELEASE

News releases are available at www.usdoj.gov/usao/ks/
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Jan. 4, 2007

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FORMER GROCERY STORE MANAGER SENTENCED IN FRAUD SCHEME

KANSAS CITY, KAN. – A former grocery store manager was sentenced to federal prison Thursday for his part in a conspiracy to defraud food manufacturers including Tropicana and Con Agra.

Gerald A. Brown, 43, Lee’s Summit, Mo., was sentenced to 30 months in federal prison, fined $7,500 and ordered to pay $76,155 in restitution. He appeared for sentencing before U.S. District Judge Carlos Murguia.

Brown pleaded guilty in September to one count of conspiracy to commit mail fraud. In his plea, he admitted he used his position as the manager of Price Chopper grocery store No. 16 in Grandview, Mo., to cash checks that he and other conspirators fraudulently obtained from food manufacturers.

“It was Mr. Brown’s willingness to cash fraudulent checks and to split the proceeds with his accomplices, that allowed the crime to continue for years,” said U.S. Attorney Eric Melgren.

In his plea, Brown admitted that from 1983 to April 5, 2002, he and others took part in a conspiracy to defraud food manufacturers. Conspirators Terry Lee Esteb, James S. Jirik, Augustine Salinas and Ronald P. Forrest worked as sales representatives for Advantage Sales and Marketing of Overland Park, Kan. The company was a food brokerage business that obtained goods from food manufacturers, which it supplied to individual grocery stores.

The conspirators used the U.S. mail to submit false paperwork to food manufacturers seeking payment for lost or damaged merchandise. The fraudulent claims stated that the money was owed to Ball Food Stores. When the food manufacturers issued checks and mailed them to Ball Food Stores, the defendants intercepted the checks and went to Brown to arrange to cash them.

The conspirators also removed grocery items from Price Chopper grocery stores in metropolitan Kansas City for their own use or to sell to smaller grocers. They would issue store credits to store managers for items they removed and then submit a request to the food manufacturers for checks to cover the cost of the items. When the conspirators sold the items to smaller grocers, they pocketed the cash.

Among the other defendants:

– Esteb, Jirik and Forrest pleaded guilty to one count of conspiracy to commit mail fraud and each of them was sentenced to 5 years probation and a $3,000 fine.

– Salinas pleaded guilty to one count of conspiracy to commit mail fraud and was sentenced to 5 years probation and $66,414 in restitution.

Melgren commended the Federal Bureau of Investigation and Assistant U.S. Attorney Kim Martin for their work on the case.