San Diego, CA – Cornerstone Management Professionals, Inc. and its representative, Robert Walsh, have been sentenced for a scheme to defraud a California Homeowners Association (HOA) through falsified asbestos abatement work and inflated billing. The case, investigated by the Federal Bureau of Investigation (FBI) and the U.S. Environmental Protection Agency (EPA) Criminal Investigation Division, reveals a pattern of negligence and deliberate deception regarding hazardous material removal.
The fraudulent activity centered around asbestos abatement work performed at a condominium clubhouse in 2015. Cornerstone solicited a bid from Superior Abatement Services for the removal of asbestos-containing ceiling material. Crucially, Cornerstone was aware of the asbestos presence but failed to ensure Superior adhered to mandatory regulatory procedures. Specifically, Superior did not provide the legally required ten-day advance notice to the San Diego Air Pollution Control District before commencing work – a critical step to protect public health and ensure safe handling of the dangerous substance.
The scheme extended beyond a simple oversight. Investigators discovered that Superior improperly disposed of the asbestos waste at a non-permitted landfill, further violating environmental regulations. More damningly, altered laboratory reports were submitted. These reports, originally generated in 2013 for a different location, were deliberately provided to Superior to falsely indicate minimal or nonexistent asbestos levels in the clubhouse ceiling samples. This manipulation was intended to conceal the improper disposal and lack of proper notification.
Federal prosecutors brought charges under Title 18 U.S. Criminal Code, specifically 18 U.S.C. §1343 – Wire Fraud. On April 5, 2018, both Walsh and Cornerstone pleaded guilty to the charges. Walsh received a 15-month prison sentence, followed by three years of supervised release. Cornerstone Management Professionals, Inc. was levied a substantial fine of $125,000. The penalties reflect the seriousness of the offenses, which not only endangered residents but also undermined the integrity of regulated environmental work.
The financial impact of the fraud extends beyond the fines and imprisonment. Walsh and Cornerstone have been jointly and severally held responsible for $247,413 in restitution payments to the defrauded HOA. This restitution is intended to cover the costs associated with correctly and safely abating the asbestos and rectifying the damage caused by the negligent and fraudulent practices. The case highlights the importance of stringent oversight in asbestos abatement, given the severe health risks associated with exposure to the material.
Key Facts
- Defendant: Cornerstone Management Professionals, Inc. & Robert Walsh
- Crime: Wire Fraud related to asbestos abatement
- Location: San Diego, California
- Year: 2018
- Statute Violated: 18 U.S.C. §1343 (Wire Fraud)
- Penalties: Walsh – 15 months imprisonment, 3 years supervised release. Cornerstone – $125,000 fine & $247,413 restitution
- Key Details: Failure to provide required asbestos abatement notifications, improper waste disposal, and submission of falsified lab reports.
The EPA’s criminal enforcement division continues to prioritize cases involving environmental fraud and the endangerment of public health. This conviction serves as a warning to contractors and management companies that knowingly violate environmental regulations and engage in deceptive practices will be held accountable.
Source: EPA ECHO Enforcement Case Database
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