Man Sentenced to 2 Years in Fraud Scheme

A federal court judge on Monday sentenced the finance director of a defunct Oxnard defense contractor to two years in prison for cheating the government out of $3.3 million by submitting claims for work that was never done.

District Court Judge J. Spencer Letts in Los Angeles also fined Del Manufacturing executive Richard Ceniseroz $50,000 and ordered him to pay $2.8 million in restitution.

The 42-year-old Oxnard man had pleaded guilty to theft of government property and filing false claims. Two other company officials from the same family were sentenced to non-prison confinement and fined.

Paul Delgado, 40, of Ojai was placed in a halfway house for six months, given three years probation and fined $10,000 for obstruction of a federal audit. Teresa Delgado, 65, was sentenced to six months home confinement, three years probation and fined $10,000 for perjury.

Defense attorney Janet Levine said the family was prepared for Monday’s sentencing, but was still shocked by the penalties.

“They’re all very close, and this has been a tragedy for the family,” Levine said.

U.S. Atty. Charles Kreindler said Del officials defrauded the government by filing claims for $3.3 million but failed to deliver most of the lug nuts they promised to manufacture at their small Richmond Avenue plant in Oxnard.

“Although Del had claimed to incur almost the entire amount awarded under the contract, it had only shipped 28.1% of the lug nut forgings to the government,” Kreindler said in a statement.

The prosecutor said that the Delgados then attempted to falsify records to hide the scheme.

Ceniseroz was also convicted of not returning $800,000 that was mistakenly paid to Del for the manufacture of Army practice bombs. Del received two identical $800,000 checks in settling a dispute over that contract, but deserved just one.

Instead of returning the second check, the company spent the money to cover debts of another Del division that made aluminum wheels, according to prosecutors.

“Even in the case of the second check,” defense lawyer Levine said, “they used it to try and bail out another part of their business. They didn’t buy luxury items for themselves.”

The Del investigation began in summer 1992, when Army and Navy investigators and FBI agents raided the Oxnard plant, seizing company files and documents. A federal grand jury indicted the company, Ceniseroz and the Delgados later that year.

Prosecutors eventually dropped fraud charges against the company because it was insolvent.