Two Fresno businessmen have been convicted of multi-million dollar fraud in federal court.
Following a five-week trial, a federal jury found Marcus Asay, 68, and Antonio Gastelum, 53, guilty of committing a multi-year pension fraud scheme.
The big picture: Along with the fraud conviction, the jury also convicted the Asay of committing separate workers’ compensation and hardship exemption fraud schemes and of laundering money that he received from the pension fraud scheme.
- Asay, was the founder and chairman of Agricultural Contracting Services Association dba American Labor Alliance (ALA).
- Gastelum – the former Parlier city manager and one-time Fresno City Council candidate in 2016 – worked with Asay as the company’s Chief Operating Officer, Chief Financial Officer and Compliance Officer.
- Asay and Gastelum offered three sham products from 2011 through 2019, according to the Department of Justice: retirement plan, workers’ compensation coverage and hardship exemption.
Driving the news: Asay and Gastelum falsely represented to over 3,000 people that they would protect and invest their retirement money through a 401(k) plan when they actually used the money for improper businesses and personal expenses.
- Those expenses included restaurants, travel, credit cards, rare coins, transfers to Asay’s personal retirement account, online companion websites and rent for Asay’s lakefront house in Fresno.
- They caused a loss of over $750,000 in the pension fraud scheme.
- For the workers’ compensation scheme, they falsely represented that national insurers backed the coverage that the company offered in several states, resulting in a loss of over $2.25 million.
- For the hardship exemption scheme, they falsely represented that for a few hundred dollars they could provide people with an exemption that would protect them from the Affordable Care Act’s shared responsibility payment for not having health insurance. In reality, only government agencies could issue such exemptions.
What we’re watching: Asay and Gastelum are scheduled to be sentenced on Oct. 21.
- They both face up to 20 years in prison for each count of conviction as well as maximum fines ranging from $250,000 to $500,000 per count.
- ALA faces a maximum of an $8.5 million fine.
