A second state worker has been charged in connection with a scandal inside California’s Office of AIDS that prosecutors say has cost the state $2 million in fraudulent billings.
Christine M. Iwamoto, who was a manager inside the office at the California Department of Public Health until March 2018, was charged in federal court in Sacramento last week with wire fraud and conspiracy to commit money laundering, court records say.
Iwamoto pleaded not guilty last week and was allowed to remain out of custody on a $25,000 unsecured bond. A change of plea hearing was scheduled for Oct. 28.
Iwamoto is accused in a fraud case that already has led to a guilty plea by another Office of AIDS worker, Schenelle Flores, who pleaded guilty in February to wire fraud and has since been cooperating with prosecutors, according to court records.
According to court documents filed Oct. 13, Iwamoto, Flores and others began a scheme in December 2017 to defraud the state by having a Southern California company bill the Office of AIDS for personal expenses incurred by defendants, including tickets to sporting events and concerts travel and restaurant bills for Flores.
As part of the scheme, Iwamoto operated a company she passed off as a consulting firm and opened a bank account to coordinate with Flores to request payment from the Southern California company through the Office of AIDS, court records say. Iwamoto also opened an email account under the name of “Patricia Roberts” to request payments for the alleged consulting work, court records say.
Prosecutors say at last five individuals, their families and friends obtained at least $2 million in the scheme.
The health department said after Flores was originally charged that it discovered fiscal irregularities in the Office of AIDS in late 2018 and began an investigation.
“CDPH has fully cooperated with law enforcement authorities and has also overhauled the fiscal management of the Office of AIDS to ensure the proper and appropriate use of state funds,” the department said in a statement then.