Federal agents are seeking embezzlement charges against three Santa Clarita Valley residents, two of whom were arrested Thursday, on suspicion they were involved in stealing $1.7 million in a fraudulent diversity hiring scheme.
Prosecutors are alleging the three schemed to defraud a company out of funds “earmarked for diversity recruitment by using two fake businesses that billed for services that were never performed.”
The 17-count grand jury indictment contains wire fraud, mail fraud and conspiracy charges, according to a statement from the U.S. Department of Justice.
The two suspects arrested Thursday were: Judith Fernandez-Adelugba, 43, of Stevenson Ranch, the former human resources manager at Company-1, a Santa Clarita-based business that provided a technical and operations center for high-performance racing programs, specializing in the design and development of racing engines and various high-performance automotive parts; and Alex Lawrence Wilkison, 47, a.k.a. “Alex Wilkerson,” of Canyon Country, the registered owner of Engineering Talent Connect (ETC), a fictitious business name registered to an address in Mission Hills.
A third defendant, George Albert Fernandez, 73, also of Stevenson Ranch, the father of Fernandez-Adelugba and the president and CEO of the Stevenson Ranch-based Business Solutions Services (BSS), is currently out of state and expected to be taken into custody soon.
Judith Fernandez-Adelugba was responsible for diversity recruitment, which included implementing and managing programs to encourage persons from diverse gender, racial, ethnic and other backgrounds to apply for jobs with her employer, according to the DOJ news release. She also had the authority to approve the payment of invoices of up to $25,000, according to the indictment.
Department of Justice officials allege from March 2015 until her resignation from Company-1 in February 2018, Fernandez-Adelugba, her father and Wilkison, who was married to a colleague and friend of Fernandez-Adelugba at Company-1, allegedly used BSS and ETC to embezzle Company-1 funds and divert this misappropriated money for their own personal enrichment.
The defendants also allegedly submitted and caused to be submitted to Company-1 fake invoices issued by BSS and ETC that requested payment for diversity recruitment-related services purportedly performed, according to the DOJ. These “services” included posting job openings, placing job-related advertisements, searching for candidates, and successfully recruiting candidates for Company-1, according to the indictment.
Fernandez-Adelugba approved the fake invoices for payment, delivered them to Company-1’s accounting department, and followed up to request and facilitate payment of the fake invoices, the indictment alleges. After Company-1 issued payments on the fake invoices, the defendants allegedly used their illicit gains for personal expenditures such as credit card bills, dining at restaurants, items bought at grocery stores, pool supplies and cash withdrawals.
Between April 2015 and January 2018, based on these fake invoices, the defendants caused Company-1 to transfer $1,562,364 to BSS and $183,600 to ETC. The total loss to Company-1 was $1,745,964, according to the indictment.
Each charge of mail fraud and wire fraud carries a statutory maximum sentence of 20 years in federal prison. If convicted of all charges, Fernandez-Adelugba would face more than 300 years in federal prison.
The FBI investigated this matter. The case is being prosecuted by Assistant U.S. Attorney Scott Paetty of the Major Frauds Section.