Federal Jury Convicts East Bay Subcontractor Of Defrauding Matrix Service Company

OAKLAND – A federal jury found Brian Federico guilty of mail fraud conspiracy and mail fraud, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.  The guilty verdicts followed a two-week trial before the Honorable Yvonne Gonzalez Rogers, United States District Judge.

Federico, 54, of Tracy, Calif., was project manager for Imperial Shotcrete, a company hired to perform concrete construction services as a subcontractor for Matrix Service Company. Matrix constructs tanks and provides tank maintenance and repair services to petrochemical companies.  The evidence at trial showed that between 2006 and 2010, Matrix and the FBI uncovered a complex fraudulent invoicing scheme in its Suisun City, Calif., office.  Evidence uncovered during the investigation caused Matrix to reimburse over $1.3 million to its customers.  

For his part in the scheme, Federico caused Matrix to pay fraudulent invoices.  The evidence at trial showed that Federico created false and fraudulent invoices both by using the name and logo of a real company without its authorization and by using bogus invoices from CEMS, another company Federico controlled.  In addition, Federico submitted fraudulent invoices to two Matrix project managers who were receiving downstream payments from Imperial—these project managers often were the same persons responsible for authorizing Matrix to pay the Imperial invoices.  Most of the funds that Matrix paid on the fraudulent invoices eventually were deposited into bank accounts that Federico controlled.  Pursuant to his part of the scheme, Federico defrauded Matrix of a total of $1,289,403.  Federico directed that more than $875,000 of the payments be deposited into bank accounts of his choosing, many of which he controlled.

On December 6, 2012, a federal grand jury indicted Federico and his co-defendants, charging each with various financial crimes related to the scheme.  The two Matrix project managers Federico conspired with will be, or have been, sentenced for their respective roles in the scheme as follows:

Judge Gonzalez Rogers scheduled Federico’s sentencing hearing for December 18, 2019.   The maximum statutory penalties for a violation of 18 U.S.C. §§ 1341 and 1349 are a maximum prison term of 20 years, a fine of $250,000, 3 years of supervised release, and restitution.  However, any sentence will be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553. 

Assistant U.S. Attorneys Thomas R. Green and Jonathan U. Lee are prosecuting this case with the assistance of Jessica Rodriguez Gonzalez, Tina Rosenbaum, and Noble Hughes.  This prosecution is the result of an investigation by the Federal Bureau of Investigation.