Date: June 20, 2024 Contact: newsroom@ci.irs.gov Fresno, CA — Following a 19-day trial, on Tuesday, a jury convicted Fresno residents Marcus Asay, Antonio Gastelum and their company, Agricultural Contracting Services Association dba American Labor Alliance (ALA), of committing a multi-year pension fraud scheme, U.S. Attorney Phillip A. Talbert announced. The jury also convicted Asay and ALA of committing separate workers’ compensation and hardship exemption fraud schemes. The hardship exemption fraud scheme involved a supposed exemption from the Affordable Care Act’s requirement that people obtain health insurance or pay a significant shared responsibility payment when they file their taxes. Finally, the jury convicted Asay of laundering money that he received from the pension fraud scheme. According to court documents and evidence presented at trial, Asay was the founder and chairman of ALA, and Gastelum was the company’s chief operating officer, chief financial officer, and compliance officer. Gastelum is also the former city manager for the City of Parlier. From 2011 through 2019, the defendants offered three sham products: retirement plan, workers’ compensation coverage, and hardship exemption. Pension fraud scheme For the pension fraud scheme, Asay, Gastelum, and ALA falsely represented to over 3,000 people that they would protect and invest their retirement money through a 401(k) plan when, in fact, they used the money for improper business and personal expenses. The improper expenses included restaurants, travel, credit cards, rare coins, transfers to Asay’s personal retirement account, online companion websites, and rent for Asay’s lakefront house in Fresno. The defendants then covered up the fact that the retirement money was gone by taking money the company received from the workers’ compensation fraud scheme and holding those funds out as pension funds. The loss caused by the pension fraud scheme was over $750,000. Workers’ compensation fraud scheme For the workers’ compensation fraud scheme, Asay and ALA falsely represented that national insurers backed the workers’ compensation coverage that the company offered in several states, including California. The defendants did so by listing the national insurers on the certificates of insurance and policy declarations that the company issued to customers. The accuracy of the certificates of insurance and policy declarations was important to the customers because they needed to present these items to their own customers and regulators as proof of having workers’ compensation coverage in order to continue doing business. When government authorities began investigating the workers’ compensation fraud scheme, the defendants sent letters to customers telling them not to cooperate. The loss caused by the workers’ compensation fraud scheme was over $2,250,000. Hardship exemption fraud scheme For the hardship exemption fraud scheme, Asay and ALA falsely represented that for a few hundred dollars they could provide people with an exemption that would protect them from The Affordable Care Act’s shared responsibility payment for not having health insurance when, in fact, only government agencies could issue such exemptions. Moreover, the exemptions were free to those who qualified. This case is the product of an investigation by the U.S. Department of Labor’s Employee Benefits Security Administration and Office of Labor-Management Standards, the Federal Bureau of Investigation, the IRS Criminal Investigation, and the Social Security Administration Office of Inspector General. Assistant U.S. Attorneys Michael Tierney, Joseph Barton, and Stephanie Stokman are prosecuting the case. The defendants are scheduled to be sentenced on Oct. 21, 2024, by U.S. District Judge Dale A. Drozd. Asay and Gastelum face up to 20 years in prison for each count of conviction as well as maximum fines ranging from $250,000 to $500,000 per count. ALA faces up to an $8.5 million fine. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the federal sentencing guidelines, which take into account a number of variables. CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.
