State worker first to be sentenced in massive California Office of AIDS fraud scheme

The former state worker at the center of a $2.7 million fraud scheme inside California’s Office of AIDS was sentenced Thursday to five years, 10 months in fedeal prison.

Schenelle M. Flores, once a manager at the office inside California’s Department of Public Health, used money from the fraud scheme to spend $200,000 on expenses at Disneyland, as well as expenses for hotels, suites at San Francisco Giants games, cruises, Sacramento Kings tickets, other sporting events and a yacht rental for her daughter’s birthday party.

Flores, who cooperated with prosecutors after being charged and had asked U.S. District Judge Troy L. Nunley for no more than a four-year sentence, was ordered to surrender to prison on May 18.

In a sentencing memo filed in court in January, Flores’ attorney blamed her actions on a difficult childhood and “spiraling drug and gambling problems which significantly impacted her work and led to her poor decision making that spiraled into the criminal conduct in this case.”

Attorney Jonathan Lynch wrote that Flores “has fully accepted responsibility” for her actions, attended substance abuse counseling and cooperated with prosecutors who are going after other participants in the scheme.

“Ms. Flores fully understands and expresses to this court how her fraudulent conduct in this case was a complete violation of the trust given to her as an employee of the state of California,” Lynch wrote in asking for a four-year sentence.

Flores, 46, wrote a 10-page letter to the judge describing her “inexcusable” conduct, problems in her personal life, opioid and marijuana use and her “frustration and disillusionment” with CDPH that increased her use of drugs.

“I committed a grievous error in judgment and deserve to be punished for my crimes,” she wrote.

Flores was charged along with a second state worker, Christine Iwamoto, in a scheme that began in December 2017 and allegedly involved up to five individuals.

State investigators began looking into spending irregularities after a Flores Disneyland itinerary was found inside an Office of AIDS “shred bin” where sensitive documents are held until they can be destroyed.

Court papers and documents obtained by The Sacramento Bee through a public records request and lawsuit against the state say Flores used a debit card provided by MLB Distributor, an Office of AIDS contractor, to fund Flores’ extravagant lifestyle while she was working on an $87,000 state salary.

Documents say that as part of the scheme Iwamoto created a phony public relations company and a persona named “Patricia Roberts” to bill the state for public relations work that was never done.

Iwamoto pleaded guilty in October and is scheduled for sentencing in April.

This story was originally published March 3, 2022 at 11:23 AM.