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‘This exorbitant wealth wasn’t earned, it was cheated’: Florida trio sentenced to 18 years in prison for fraud in $200m baby food export

A federal judge has sentenced a trio of Florida infant formula brokers to 18 years in prison for a $200 million scam in which they received discounted infant formula to ship to developing countries but then paid full price in the US sold for huge profits.

As part of Thursday’s sentencing, Judge Roy Altman ordered the three defendants to forfeit over $200 million in illicit winnings. Among the items federal prosecutors in Miami wanted to seize are a $9 million mansion in Golden Beach, Fla., a 48-foot yacht and several properties abroad.

“This exorbitant wealth was not earned, but obtained by fraud,” argued the federal prosecutor in court documents.

Between 2013 and 2018, Johnny Grobman, 48, Raoul Doekhie, 53, and Sherida Nabi, 57, fraudulently obtained heavily discounted prices for formulas from US manufacturers by claiming they were buying them for the government of the South American country of Suriname , prosecutors said.

At trial, it was revealed that the three partners had no such contract with the Suriname government and simply took the discounted formula and sold it to dealers in the US at full price

In all, prosecutors say the group scammed formula makers out of $100 million by exploiting the so-called “grey market,” where goods are shipped from one market to another without the manufacturer’s permission to exploit price differentials.

To better cover their tracks, prosecutors said the group sometimes sent the formula to Suriname and then sent it back to create documentation that it had been exported. In other cases, they sent bogus shipments containing no goods in order to create the necessary paperwork, court filings say.

Under federal regulations, the formula requires special handling during transit to ensure it is not adulterated in transit, but prosecutors say the group sometimes packed them in containers lined with bulkheads and barbed wire to ship to Suriname.

The trio were convicted after a 13-day trial in 2020 on wire fraud, money laundering, smuggling and other charges. In April, Judge Altman ordered Grobman to forfeit $87 million in illicit earnings and that Doekhie and Nabi, who are married, turn over $115 million in fraudulently obtained proceeds.

Grobman and Nabi’s attorneys did not immediately respond to messages seeking comment, and Doekhie’s attorney declined to comment.

Prosecutors say the scam was uncovered starting in 2017 when an honest truck driver making a delivery alerted a manufacturer that its product was being held up. When the company refused to continue doing business with the group, prosecutors say Nabi Grobman asked why, to which he replied:

“We’ve worked for over 12 years with minimal problems, we should consider ourselves lucky. I understand that every time we lose a line it affects us all but that’s out of control a driver talking these are the kind of jerks that elected our current president,” Grobman wrote, according to court documents.

https://www.marketwatch.com/story/this-exorbitant-wealth-was-not-earned-it-was-swindled-florida-trio-sentenced-to-18-years-in-prison-for-200-million-baby-formula-export-scam-11653331970?rss=1&siteid=rss ‘This exorbitant wealth wasn’t earned, it was cheated’: Florida trio sentenced to 18 years in prison for fraud in $200m baby food export

Brian Lowry

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