3 Plead Guilty in Defense Fraud Case : Oxnard: A bargain in the $3-million case is reached between government and contractor on eve of the trial.

Two officers and an employee of a small Oxnard defense contractor have pleaded guilty in connection with a scheme to defraud the government of more than $3 million, a prosecutor said Tuesday.

Richard Ceniseroz, 42, of Oxnard agreed to the stiffest penalty under the plea agreement reached earlier this week, said Assistant U.S. Atty. Charles Kreindler.

Ceniseroz, the company’s finance director, pleaded guilty to two counts of government theft and two counts of false claims, and will probably serve two years in federal prison, Kreindler said.

Ceniseroz is also expected to pay a fine of $50,000 when he is sentenced Sept. 12 in a Los Angeles federal court, Kreindler said. Nine other counts related to the fraud scheme were dropped in return for the plea, he said.

Ceniseroz also agreed to make restitution to the government of $2.8 million, but Kreindler said there is little likelihood prosecutors can collect that amount. “These are not rich people,” he said.

Ceniseroz’s cousin, Paul Delgado, 40, of Ojai, pleaded guilty to one count of obstruction of a federal audit and will serve six months in a halfway house. The cousins’ aunt, Teresa Delgado, 65, admitted falsifying records and lying to the grand jury, Kreindler said. She has agreed to be confined to her Oxnard home for six months, where she will be monitored with an electronic ankle bracelet.

Both Delgados have also agreed to pay fines of $10,000 each.

The plea agreement was reached Monday, one day before trial was set to begin, Kreindler said. The company, which went bankrupt in 1992, was producing aircraft parts for the Department of Defense. It was run by the same family for several decades in an industrial section of Oxnard.

The defendants agreed to plead guilty to restore some order to their shattered family, said a Los Angeles attorney representing Paul Delgado.

Attorney Janet Levine said the family had opened an aluminum wheels company that was losing money and was also starting to see their profits from defense contracts dwindle.

“This was a case where economic circumstances got the better of the individuals and they go in over their heads,” Levine said. “They didn’t go out and buy yachts. They were just trying to keep their business running.”

She said the three defendants have taken full responsibility for their actions by entering their guilty pleas and are repentant.

“It’s been very traumatic for the whole family,” Levine said.

The investigation into Del Manufacturing, on Richmond Avenue in Oxnard, began in the summer of 1992, when investigators from the Army and Navy, working with the FBI, removed several boxes of administrative files from the company after it failed to deliver the promised parts.

Federal grand jury indictments against the company, Ceniseroz and the Delgados were handed down in the fall of 1993, Kreindler said.

But the U.S. attorney’s office in March announced it was dropping fraud charges against Del Manufacturing, saying the likelihood of collecting fines against the bankrupt company were slim.

Prosecutions against Ceniseroz and the Delgados continued, however, focusing on contracts the company made with the government in 1989 to manufacture lug nuts. The government paid Del Manufacturing $3.3 million to produce the parts, but a investigation showed it had shipped only 28% of the completed lug nuts to the government.

Paul Delgado, the company’s general manager, and Teresa Delgado, its corporate secretary, falsified business records to hide the scheme, Kreindler said. They also both lied to a federal grand jury when asked about it, Kreindler said, although Paul Delgado’s perjury charge was later dropped.

Ceniseroz was also charged with collecting twice on a $800,000 claim he made under a contract to produce practice bombs for the Army, Kreindler said.

The government paid both $800,000 checks in 1988, but the double billing was not discovered until two years ago during a routine contract audit.

“They should have returned the second check,” Kreindler said. “Instead, they spent it.”

The money apparently did not go for luxury items, but to help the company bail out its aluminum wheels division, Kreindler said.

Ceniseroz’s attorney, Mark Heaney, said his client candidly acknowledged in court that “some things were done wrong with its billing practices.” Ceniseroz decided to accept the plea agreement out of a desire to get the case resolved, the attorney said.

“He’s very concerned about the impact of this on his family,” said Heaney. Ceniseroz is married and has three children.

All three defendants remain free on bond until sentencing.