2003-07-30 -- Rodriguez, Jesus -- Indictment -- News Release

Florida Businessman Indicted for Conspiring to Defraud a New Jersey Cosmetic Chemical Manufacturing Company

NEWARK -- A Pembroke Pines, Florida man was indicted today on charges that he participated in a fraud against a Sayreville cosmetics company, which resulted in a loss to the company of more than $500,000, U.S. Attorney Christopher J. Christie announced.

Count One of the 33-count Indictment charges that Jesus Rodriguez, 44, conspired with Robert Spruce, 37, of Holmdel, to defraud Alzo International, a Sayreville manufacturer of cosmetics chemicals. The Indictment also charges Rodriguez with 21 counts of mail fraud and 11 counts of the interstate transportation of property obtained by fraud, according to Assistant U.S. Attorney Alain Leibman.

Spruce pleaded guilty on March 18, 2003 to a one-count Information charging conspiracy to commit mail fraud. At his plea hearing before U.S. District Judge William H. Walls, Spruce admitted that he participated in a fraud against his father-in-law's cosmetics company, resulting in a loss to the company of more than $500,000. Spruce faces a maximum sentence of five years in prison, a $250,000 fine and an order for restitution when he is sentenced later this year.

The Indictment alleges that Rodriguez, a principal in Cosmetics Corporation of America, a Miami cosmetics chemicals distributor and manufacturer, agreed with Spruce, a salesperson for Alzo International, to cause Alzo to ship chemicals to Cosmetics Corp. or its customers without paying Alzo International for those items. The Indictment charges that Rodriguez agreed in 1998 to pay Spruce one-half of what it would otherwise have cost Cosmetics Corp. to buy those items. In exchange for payments in cash and by check from Rodriguez, Spruce destroyed internal records at Alzo International to prevent invoices to Cosmetics Corp. from being generated.

The Indictment alleges that between 1998 and August 2000, when the scheme was discovered and ended, Rodriguez and his company obtained more than $500,000 worth of products from Alzo International without paying for them. Many of those items were sold to a Little Falls, N.J. cosmetics concern, which is not named as a co-conspirator.

The mail fraud counts in the Indictment stem from payments sent by Rodriguez via commercial overnight delivery to Spruce in New Jersey, and the counts relating to the interstate transportation of property obtained by fraud concern the payments sent by the Little Falls company to Cosmetics Corp. to pay for items fraudulently obtained by Cosmetics Corp.

Each of the conspiracy and mail fraud counts carries a maximum penalty of five years in prison, and each of the interstate transportation of property obtained by fraud counts carries a maximum penalty of ten years in prison; each count also carries a maximum penalty of a $250,000 fine.

Under U.S. Sentencing Guidelines, the U.S. District Judge to whom the case is assigned would, upon a conviction, determine the actual sentence based upon a formula that takes into account the severity and characteristics of the offense, as well as each defendant's criminal history. Parole has been abolished in the federal system. Under Sentencing Guidelines, defendants who are given custodial terms must serve nearly all that time.

An Indictment is a formal charge made by a grand jury, a body of 16 to 23 citizens. Grand jury proceedings are secret, and neither persons under investigation nor their attorneys have the right to be present. A grand jury may vote an Indictment if 12 or more jurors find probable cause to believe that the defendant has committed the crime or crimes charged.

Despite Indictment, every defendant is presumed innocent, unless and until found guilty beyond a reasonable doubt following a trial at which the defendant has all of the trial rights guaranteed by the U.S. Constitution and federal law.

Christie credited Special Agents of the Federal Bureau of Investigation from the Garrett Mountain Resident Agency, under the direction of Special Agent in Charge Louis F. Allen, with bringing the case.

The Government is represented by Assistant U.S. Attorney Leibman of the U.S. Attorney's Government Fraud Unit.

Defense Counsel:

Samuel Rabin, Esq., Miami, Florida