Ringleaders Get Prison Terms, Fines for Roles in Port District Scam : Theft: Prosecutors say the sentencing of Rudi Michael Enriques and Paul Robert Manes has ‘cut off the head of the dragon.’

The two ringleaders of a purchasing and bid-rigging scam that cost the Port District at least $700,000 were sentenced Wednesday to four years in state prison and ordered to pay $10,000 each.

Rudi Michael Enriques, 38, a former parking meter collector and repairman characterized by the District Attorney’s office as the mastermind behind the fraud, and Paul Robert Manes, 49, a former manager of the Genuine Parts/Napa auto parts store on 12th Avenue, were taken into custody immediately after sentencing by Superior Court Judge Jesus Rodriguez.

The pair pleaded guilty in November to five counts of grand theft, one count of attempted grand theft, one count of appropriating public funds, and one count of conspiracy to defraud. They could have been sentenced to a maximum of eight years in state prison.

The third ringleader, Richard Miles Cersosimo, 49, former purchasing agent for the San Diego Unified Port District, was convicted for his part in the scam and is due to be sentenced Friday.

Three other defendants in the case have entered guilty pleas and have been sentenced. They are Ronald Barry Lewis, 45, a Spring Valley computer consultant; William J. Garrett, the Port District’s former manager of marine operations; and William Clair, a retired Harbor Police lieutenant. Another man charged in the case, Arnoldo Olivarria Castillo, 55, who was a salesman for the auto parts store, has fled and is believed to be in Mexico.

“No question we’ve cut off the head of the dragon,” said Deputy Dist. Atty. David Cox in characterizing the sentencing of Enriques to reporters.

As outlined by the district attorney’s office, which first began investigating the scam in June, 1987, and eventually accumulated 60,000 documents in the case, Enriques and Manes, and the others, cheated the Port District out of at least $700,000 from January, 1986, to July, 1987.

But prosecutors, who have been unable to trace at least hundreds of other transactions, say the true amount of the fraud, spread over at least five years, may add up to $1.5 million.

As described in court documents and statements by the District Attorney’s office, the scheme originated with Enriques working with accomplices at the Genuine Parts/Napa store. Relying on a blizzard of phony and altered invoices, requisition forms and other business documents, the men billed the Port District for purchases, ranging from car repairs and computers to furniture and VCR’s, that were obtained for personal use.

The Port District not only paid for items it never received, but the bogus charges made by the auto parts contained a 67% profit mark-up. Additionally, Enriques, Manes, Cersosimo and Castillo were accused of creating a bid-rigging system in which Napa was provided with secret information regarding other bidders’ low quotes so that the auto store could submit its own quote at a lower price.

The store often bought the goods from the legitimate low bidder. Genuine Parts/Napa then secretly added both any difference in cost Napa paid for the items plus its 67% profit and passed it on to the Port District on separate invoices. The markup helped Manes and Castillo individually because both were paid a commission.

The key to the scam was the invoices. Although purchases may have cost several thousand dollars, they were “laundered” through the Port District’s purchasing system by a series of split-invoices, each of which were kept below $250, thus allowing them to be routinely paid without question or review by high-level port officials.

At Wednesday’s sentencing, Jacqueline C. Crowle, Enriques’ attorney, said the financial management system at the Port District was such a “disaster” that Enriques merely “took advantage of a situation not of his making.”

She said higher-ups at the port “knew (about his activities) and encouraged him.” Crowle described Enriques as a person who excessively tried to help others, a trait that led to his involvement. “People at the Port District encouraged Mr. Enriques to do things for him,” she said, adding that his job performance evaluations were “exemplary.”

Cox, the prosecutor, acknowledged that Enriques and Crowle have alleged that high-level Port District officials were involved, but he said neither of them has submitted any evidence to back up their claim. Enriques has refused to be interviewed by the District Attorney’s office, and Crowle told reporters after the sentencing that Enriques now just “wants to put it (the incident) behind him and get on with life.”

Manes’ attorney, Michael Berg, said others who benefited from the scheme--including about 20 Port District employees who received assorted goods and services--were not charged or required to pay restitution.

“They got something for nothing,” said Berg, noting that Manes was “one of the fall people.”

He said Manes, a decorated Vietnam veteran, has lost his job of 22 years with the auto parts store and now works two delivery jobs.

Cox, responding to Berg’s claim that others at the port who received items through the scam aren’t being prosecuted, said that simply because someone received merchandise or services was not evidence in itself of a crime. He said his office has to be able to prove people knew they were breaking the law and willingly participating in the fraud in order to make the charges stand up in court.

Cox said his office will review some of the material gathered in its investigation and determine whether anyone else should be charged.