Multimillion-dollar scandal at California’s Office of AIDS leads to third guilty plea

A third California Office of AIDS worker pleaded guilty Thursday in a $2.7 million fraud case that prosecutors say involved a scheme to siphon off cash from HIV programs for personal expenses, trips to Disneyland and lavish meals at pricey restaurants.

Yvonne Gaide, 60, of Orangevale, pleaded guilty Thursday to a single count of wire fraud before U.S. District Judge Troy L. Nunley in Sacramento and agreed to cooperate with prosecutors in their ongoing investigation.

Gaide was charged last month with obtaining at least $472,717 in state funds in a scheme orchestrated with two former co-workers at the Office of AIDS who already have been sentenced to prison.

Court papers say Gaide worked as an analyst at the office, where between December 2017 and December 2018 the workers purloined the money using billings to the state from a phony consulting company, debit cards from another firm that had a legitimate Office of AIDS contract and Visa gift cards that were to be used as incentives for patients and healthy living practices but instead pocketed by the workers.

Some of the money Gaide received came in the form of cash payments delivered by co-defendant Christine Iwamoto, who received $450,000 by billing the state from a phony company for consulting fees, court papers say.

A plea agreement Gaide signed says Iwamoto met with her to hand over the cash to conceal the fact that she was receiving money, and that at one meeting Gaide received $20,000 to $25,000 in cash.

The scheme, which prosecutors say began with Office of AIDS manager Schenelle Flores, included using a debit card from an executive at MLB Distributors, which had a $7.4 million Office of AIDS contract.

MLB is identified as “Corporation 1” in court papers, but state Department of Public Health documents released after The Bee sued under the California Public Records Act identify the company, which is no longer in business.

Flores and Gaide used the debit card for personal expenses, court papers say.

“Gaide obtained at least approximately $19,217 of items for her personal use with the debit cards, including purchases from Disneyland, Universal Studios, Ruth’s Chris Steakhouse, and assorted apparel and home decorating items,” the plea agreement documents say, adding that those expenses were charged to the state contract.

Gaide also allegedly joked in text messages about her purchases and others Flores was making at Target.

“What the hell does Schenelle buy at (Target)?” Gaide wrote to a person identified in court papers only as “Individual 5.” “LMAO, I’m gonna get a part-time job there. Bahaha.”

“We both may need to,” Individual 5 replied. “It’s like you and I are sitting in a car in front of a bank that just got robbed. They jump in our car and we drive off. Maybe a little dramatic, but seriously ... Target!”

Flores, 47, who was accused of being the leader of the group, was sentenced in March to five years, 10 months in federal prison and agreed to cooperate with prosecutors. She is currently in custody at the Federal Correctional Institution in Dublin.

Court papers say she used AIDS funds to pay for suites at San Francisco Giants games, cruises, Sacramento Kings tickets and a yacht rental for her daughter’s birthday party.