Three members of Romanian organized crime groups, including a husband and wife, were sentenced this week in San Diego federal court for crimes related to thefts of public benefits from the U.S. government.
Their cases are part of a growing list of prosecutions by the U.S. Attorney’s Office in San Diego targeting Romanian organized crime groups and their affiliates on charges typically related to unemployment fraud and thefts from other public-assistance programs, such as food stamps. Some of the thefts have also targeted benefit recipients themselves through the use of card-skimmers and cloned EBT cards.
Last week, just days before Monday’s sentencings, prosecutors unsealed the latest indictment against a Romanian group. It charged 14 defendants with counts of fraud and money laundering for a COVID-era scheme that allegedly bilked the California Employment Development Department out of more than $5 million in unemployment benefits.
On Monday, U.S. District Judge Larry Burns sentenced Constantin Bobi Sandu, a 34-year-old Romanian national, to three years and four months in federal prison for masterminding a similar scheme involving the theft of pandemic-era unemployment benefits.
According to his plea agreement, Sandu and a co-conspirator used Facebook to recruit more than 200 other people to submit fraudulent unemployment claims. Those helping Sandu would pay him an up-front fee to take part in the scheme. Once they received the fraudulent unemployment payment, they would pay him another fee and keep the rest of the money.
“In total, between July 2020 and August 2022, Sandu conspired with 214 uncharged co-conspirators … to fraudulently obtain no less than $5,207,687 in California Unemployment Insurance benefits,” the plea agreement states. Sandu admitted that he used $16,000 of the pilfered funds to renovate his home in Romania.
In sentencing documents, his attorney pointed out that the theft did not include force, violence or intimidation, and Sandu himself only received about $60,000 of the fraudulently obtained insurance benefits.
Burns on Monday also sentenced Eduard Ghiocel, 48, to three years in prison, and his wife, Floarea Ghiocel, 49, to two years and six months in prison for a money-laundering conspiracy.
According to their plea agreements, the couple also took part in an unemployment fraud scheme and, along with their three adult children, carried out several San Diego-area street robberies — typically using sleight of hand to slip jewelry off unsuspecting victims. In total, the couple sent at least $1.36 million netted from the fraud and robberies back to Romania.
Attorneys for the couple explained to the judge in sentencing documents that the Ghiocels, like Sandu, are part of the Roma ethnic group, a people who used to be known as “gypsies,” though that term is now considered derogatory. The Roma people were displaced centuries ago and have been a largely unwelcome ethnic minority in many European countries for some 1,000 years.
That historical context and what it entails, such as extreme poverty and large illiteracy rates, is important in understanding the crimes the defendants committed, their attorneys argued.
“The story of the Roma is replete with intense persecution at the hands of the various governments where the Roma settled,” Eduard Ghiocel’s defense attorney, Roseline Feral, wrote in her sentencing memorandum. “Never did any government give these people legitimacy by either accepting their presence or by granting them any public status or government services such as education and so forth. The Roma, like many other displaced people, were enslaved throughout the ages, and sent to the concentration camps during World War II.”
The centuries of oppression and persecution have created an insular society with values and customs much different than those of Western societies, according to scholars. “Centuries of prejudice and discrimination from governments, institutions and individuals … have pushed the great majority of Roma to the margins of society — and kept them there,” Amnesty International concluded in a report about the Roma people.
The attorneys for the trio argued that poverty, not greed, was what drove their clients. The attorneys for the Ghiocels also argued that they were not part of a traditional organized crime group, but instead committed crimes alongside their tight-knit family unit.
But prosecutors and investigators in San Diego have documented for more than a year now a growing problem involving organized Romanian groups, who have established a niche skimming ATMs and in-store card readers to steal food stamps from unsuspecting public benefit recipients.
In the six months between August 2022 and January, thieves using compromised EBT accounts stole close to $39 million from benefit recipients across California, according to federal search warrants citing figures provided by the California Department of Social Services. About $2.3 million of that total was stolen from ATMs in San Diego County, and about $2.9 million was stolen from San Diego County residents.
The Los Angeles Times reported that the statewide loss from such thefts spiked to $51.9 million for all of 2022, up from just a few million the year before. Through the first three months of 2023, such thefts were on pace to tally more than $126.4 million.
Romanian card-skimming operations date back to at least 2009, when Romanian police busted a group that had reportedly been stealing debit and credit card information in Italy, France, Switzerland and the U.S.
In 2020, the Organized Crime and Corruption Reporting Project published a wide-ranging investigation into a longtime Mexican-based Romanian group it dubbed the Riviera Maya gang, which apparently stole hundreds of millions of dollars through a card-skimming operation based in Cancún that is believed to still be active.
According to court documents in San Diego federal court, similar groups operating locally have installed card skimmers, usually known as overlay skimmers, by installing a counterfeit faceplate over the top of a legitimate card reader. When victims swipe their cards, the information is read by both the legitimate card reader and the skimmer, which stores the information.
The skimmed data is then re-encoded onto “cloned” cards the thieves can use to manually withdraw money from an ATM. Or they can spend the funds at a store.
Prosecutions in San Diego have uncovered both types of schemes. In several instances, federal agents have staked out ATMs in the early morning hours on the first day of the month, when food stamps are distributed to EBT cards. At those locations, they’ve caught men using cloned cards to drain the accounts of public assistance recipients.
In another case, investigators discovered a Romanian woman and several co-conspirators were making massive purchases of Red Bull and other energy drinks at San Diego and Riverside county stores. They were using money pilfered from EBT recipients to purchase the drinks and resell them at a profit.
