A trio of Florida baby formula brokers have been sentenced by a federal judge to 18 years in prison for running a $200 million scam in which they got discounted infant formula to send to developing countries but then sold at full price in the U.S. for gigantic profits.
“This exorbitant wealth was not earned, it was swindled,” federal prosecutors argued in court papers. In all, prosecutors say the group defrauded formula manufacturers out of $100 million by exploiting what is known as the “gray market,” where goods are shipped from one market to another without the manufacturer’s permission, to take advantage of price discrepancies.
The trio were convicted of wire fraud, money laundering, smuggling and other charges following a 13-day trial in 2020. In April, Judge Altman ordered that Grobman forfeit $87 million in illicit proceeds and that Doekhie and Nabi, who are married, hand over $115 million in fraudulently obtained profits.
They must provide the export receipt to their supplier, so how they did it without this proof, for so long?
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