Former Raley's employee pleads guilty to defrauding store of $2.5 million

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Updated: 2/12/2013 3:13 pm
SACRAMENTO, Calif. (KRNV & -- Auburn area resident, David John Magana, 46, pleaded guilty today to a conspiracy to commit mail and wire fraud and a money laundering conspiracy, United States Attorney Benjamin B. Wagner announced.

According to court documents, Magana, the former Director of Advertising for Raley’s Family of Fine Stores, conspired with others to defraud Raley’s of more than $2.5 million using a number of schemes. The investigation is ongoing.

According to court documents, Magana demanded that a company that provided printing services to Raley’s, Vertis Inc., and a company that provided paper supplies, Graphic Communication Holding Inc., pay a co-conspirator unnecessary commissions in order for them to keep doing business with Raley’s. Given Magana’s position as Director of Advertising, both Vertis and Graphic agreed to pay Magana’s co-conspirator, so long as Magana made sure that Raley’s reimbursed them. Magana reimbursed the unnecessary commissions to the companies by disguising them as additional charges within their regular invoices. Magana approved for payment all of the inflated invoices from both Vertis and Graphic. Magana’s co-conspirator paid Magana a kickback after he received money from Vertis or Graphic.

Magana is scheduled to be sentenced by United States District Judge John A. Mendez on June 4, 2013. He faces a maximum sentence for the mail fraud charge of 20 years in prison, a fine of $250,000, or twice the gross gain or loss, whichever is greater, and a three-year term of supervised release. The maximum sentence for the money laundering charge is 20 years in prison, a fine of $500,000, or twice the value of the laundered property, whichever is greater, and a three-year term of supervised release. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.

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roseanya - 2/15/2013 12:05 PM
0 Votes
Ever hear of internal controls? What was your outside auditor NOT doing? Sure, an audit doesn't guarantee locating fraud but they should at least look at fraud, waste and abuse. Unfortunately, this sort of thing happens when the checks and balances are not in place, when "management" is given a free hand, never questioned, and never reviewed.

sosumenow - 2/13/2013 10:28 PM
0 Votes
The article says it was the printing and graphic design service, nothing to do with a voice. I really like Relay's and all it's workers. I hate to see anyone make it harder for them to compete with stores that give less service and quality. I wonder if they are insured against internal fraud?

Kramer - 2/12/2013 6:50 PM
0 Votes
kinda sours that folksy voice-over image of raley's, no?

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