In the Raley’s fraud case, Jason Allen Smith of Foresthill was to be sentenced Dec. 3, 2013. I was curious what the sentence was and when it will be served.
– Jason, Rancho Cordova
Jason Allen Smith, 48, of Foresthill, was one of three people charged in a scheme to defraud the Raley’s supermarket chain of more than $2.5 million.
Smith pleaded guilty in August 2013 to conspiracy to commit mail and wire fraud. He was sentenced in December 2013 to three years and one month in prison and ordered to pay $1.6 million in restitution. Although the federal Bureau of Prison’s website lists a registration number for Smith, it indicates that he is not in Bureau of Prison’s custody. Federal court online records show filings in his case have continued following sentencing.
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According to stories in The Sacramento Bee, Smith, a former contract employee, conspired with David John Magana, 48, Raley’s former director of advertising, and Martin Stewart Cullenward, 61, of Cool to defraud the supermarket chain. Smith took part in two of Magana’s fraud schemes.
According to the plea agreement, Smith used a company he created legally before the scheme, Advantage Paper Inc., to receive the proceeds from the scheme. He and Magana supplied newsprint for advertising inserts to the supermarket chain at an inflated price. The proceeds from the inflated paper purchases were deposited into Advantage Paper’s bank accounts and later split with Magana.
Some of the paper that Raley’s purchased was never used by Raley’s. Instead, Magana allowed Smith and Cullenward to sell that paper to third parties for a fraction of the amount paid by Raley’s, authorities said. Proceeds from the fraudulent paper sales went to Smith and Cullenward, both of whom paid kickbacks to Magana.
Magana was sentenced to three years and 11 months in prison and ordered to pay more than $2.9 million in restitution. He is in the U.S. penitentiary in Lompoc.
Cullenward was sentenced to three years and five months in prison and ordered to pay $1.4 million in restitution. He is in the federal correctional institution in Herlong.
Call The Bee’s Cathy Locke, (916) 321-5287.