Florida Residents Sentenced to 18 Years’ Prison Over Fraud Scheme Involving Baby Formula

A photo purports to show baby formula products at a Texas illegal immigrant processing facility in Hidalgo, Texas, on May 11, 2022. (Rep. Kat Cammack's office)

Three individuals from South Florida have each been sentenced to 220 months in prison by a federal district judge in Miami after a jury found them guilty of a fraud scheme involving infant formula, eye-care products, and other FDA-regulated items.

Between 2013 and 2018, Johnny Grobman, 48, Raoul Doekhie, 53, and Sherida Nabi, 57, deceived U.S. manufacturers to secure deep discounts on products. The group told manufacturers that they were buying products to ship to Suriname as part of some government procurement contracts they held in the country, a May 20 Department of Justice press release states.

In reality, the individuals never had any government contracts in Suriname and never intended to export the products.

Instead, they procured infant formula and other items at a discount from U.S. manufacturers and sold them within America. Through their fraudulent schemes, they cheated American manufacturers of more than $100 million.

“Today’s announcement should serve as a reminder that those who fraudulently divert consumer products for profit will be held accountable for their actions,” Special Agent in Charge Justin C. Fielder at the FDA Office of Criminal Investigations Miami Field Office said, according to the press release.

“We will continue to investigate and bring to justice those who engage in fraudulent schemes involving FDA-regulated products.”

On Feb. 6, a federal jury had found the three individuals guilty of conspiring to obtain pre-retail medical products worth $5,000 or more by fraud or deception, conspiring to commit wire fraud, wire fraud, smuggling goods from the United States, theft of pre-retail medical products, and money laundering.

The criminals kept their activities hidden from manufacturers in three ways. The first involved sending “dummy” shipments abroad that did not contain products purchased from manufacturers. These shipments provided fake documentation to give an impression that exports took place.

The second method involved sending the actual products overseas to generate documentation and then shipping them back to the United States. In the third method, the trio simply created fake export documentation while the products never left American shores.

“On April 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,” the press release states.

The judgment comes as the United States is experiencing a shortage of infant formula products. In the first week of May, 43 percent of baby formula supplies were out of stock across America. The United States produces 98 percent of the infant formula it consumes.

A shipment of 35 tons of baby formula arrived in Indianapolis from Germany as part of resolving the shortage. It will be distributed to regions where there is an acute need for the product.