A federal district judge in Miami has sentenced three South Florida residents to 220 months in prison for orchestrating an elaborate fraud scheme involving baby formula.
A jury found Johnny Grobman, 48, Raoul Doekhie, 53, and Sherida Nabi, 57, guilty of cheating U.S. manufacturers of infant formula, eye-care products, and other FDA-regulated items out of more than $100 million.
Between 2013 and 2018, Grobman, Doekhie and Sherida secured deep price discounts for infant formula and other items by lying to the U.S. manufacturers of the products.
Doekhie and Nabi — a married couple — told the manufacturers that they were purchasing the products to ship overseas to Suriname, often in connection with alleged government procurement contracts they held in Suriname.
However, the defendants did not have government procurement contracts and never intended to export the products to Suriname.
Instead, Grobman and others sold the products within the United States for millions of dollars, which the three defendants later split among themselves.
Grobman, Doekhie and Sherida hid their activity from the U.S. manufacturers of the FDA-regulated products in one of three ways.
3 Methods of Moving the “dummy” baby formula shipments
The first method was to send “dummy” shipments abroad, which did not contain the products purchased from the manufacturers, but did generate documentation to prove that an export occurred.
The second method was to “U-turn” the products. These products were shipped abroad, generating export documentation. However, as soon as they arrived overseas, they were shipped back to the United States.
The third method was to create fraudulent export shipping documentation showing that the products were exported when they actually never left the country.
On Feb. 6, 2020, following a 13-day trial, a federal jury found all three defendants guilty of conspiring to commit wire fraud; wire fraud; money laundering; conspiring to obtain pre-retail medical products worth $5,000 or more by fraud or deception, theft of pre-retail medical products; and smuggling goods from the United States.
On Apr. 25, 2022, the Court entered forfeiture money judgments for the amounts of the criminal proceeds traceable to the offenses of conviction as follows: $87,187,374.83 against Grobman and $115,699,273.61 jointly against the Defendants Doekhie and Nabi.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, and Justin C. Fielder, Special Agent in Charge, Miami Field Office, United States Food and Drug Administration, Office of Criminal Investigations (FDA-OCI), announced the sentences that U.S. District Judge Roy K. Altman imposed on Thursday.
This case was investigated by the United States Food and Drug Administration, Office of Criminal Investigations with assistance from the Broward County Sherriff’s Office, and prosecuted by Assistant U.S. Attorneys Shannon Shaw, Christopher Browne, and John Shipley. Assistant U.S. Attorney Joshua Paster is handling asset forfeiture.
This is the second large-scale prosecution by the South Florida U.S. Attorney’s Office and FDA-OCI targeting fraud schemes related to the “gray market,” which involves the diversion and resale of certain goods that were not intended for distribution in the United States.
The first case was announced by the Office in September 2019, involving the convictions of five defendants, including Byramji Javat, a citizen of Pakistan and Chairman of the Dubai-based Uniworld Group.
Those defendants were convicted for various offenses relating to a global fraud scheme that relied upon false claims about the United States military and the Government of Afghanistan.