Johnny Grobman, Wire Fraud, Florida 2022

A federal district judge in Miami has handed down 18-year prison sentences to three South Florida residents accused of orchestrating an elaborate baby formula fraud scheme that cheated US manufacturers out of over $100 million.

Between 2013 and 2018, Johnny Grobman, 48, Raoul Doekhie, 53, and Sherida Nabi, 57, secured deep price discounts for infant formula and other FDA-regulated items by lying to the US manufacturers of the products.

The defendants, who are married, told the manufacturers that they were purchasing the products to ship overseas, to Suriname, often in connection with purported 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 in the United States for millions of dollars, which the three defendants later split among themselves.

On February 6, 2020, a federal jury found the 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 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 fraud perpetrated by these defendants is nothing short of egregious,” said U.S. Attorney Gonzalez. “The 18-year prison sentences reflect the seriousness of the defendants’ crimes. Our Office will continue to vigorously prosecute those who commit these types of offenses.”

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

The three defendants will serve their prison sentences concurrently, resulting in an effective 18-year prison sentence for each.

The case is the second large-scale prosecution by the South Florida U.S. Attorney’s Office and FDA-OCI targeting fraud schemes related to the so-called “gray market,” which involves the diversion and re-sale of certain goods that were not intended for distribution in the United States.

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