San Jose, California - Ferdinand Pasion Arafiles, AKA Dennis Arafiles, appeared in court Thursday and was arraigned on charges he defrauded a Bay Area manufacturer and seller of networking equipment and services, announced United States Attorney Brian J. Stretch and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The appearance follows an indictment handed down by a federal grand jury on June 23, 2016, and unsealed earlier.
Arafiles, 49, of Alameda County, was an employee of a Bay Area public school district. According to the indictment, beginning in October of 2009, more than four years after Arafiles ceased to be an employee of the school district, he began taking advantage of the relationship between the district and a leading networking equipment and services corporation. Specifically, Arafiles is accused of manipulating the company’s warranty contract and service program for the district in order to receive, and then sell, replacement computer parts to which he was not entitled.
According to the indictment, Arafiles’s used fictitious names or stolen identities to create multiple bogus user accounts purporting to be a legitimate user of the school district account. Arafiles allegedly used these accounts to submit fraudulent warranty and service contract claims to the networking equipment and services corporation. The fraudulent claims allegedly resulted in delivery of replacement parts from the networking equipment and services corporation to addresses designated by Arafiles. Further, after Arafiles received the replacement computer parts to which he was not entitled, he allegedly sold at least some of those replacement parts to customers and, in the process, obtained money for his personal use and gain. The indictment charges Arafiles with five counts each of wire fraud, in violation of 18 U.S.C. § 1343; interstate transportation of stolen property, in violation of 18 U.S.C. § 2314; and mail fraud, in violation of 18 U.S.C. § 1341.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted of violating 18 U.S.C. §§ 1341 or 1343, the defendant faces a maximum sentence, per count, of 20 years’ imprisonment and a fine of $250,000 plus restitution, if appropriate. If convicted of violating 18 U.S.C. § 2314, the defendant faces a maximum sentence, per count, of 10 years’ imprisonment, a fine of $250,000, plus restitution, if appropriate. Additional fines and a term of supervised release also may be imposed, however, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Arafiles currently is in custody and he is scheduled to appear in court for a detention hearing on Tuesday, July 5, 2016, before Nathaniel Cousins, U.S. Magistrate Judge.
Assistant U.S. Attorney Timothy Lucey is prosecuting the case with the assistance of Laurie Worthen. The prosecution is the result of an investigation by the FBI.