Stephen Gibbons, Assistant District Attorney   CONTACT PERSON:
Joseph P. Reader, Deputy District Attorney
Real Estate Fraud Unit
(408) 792-2689   For release on March 16, 2006     WALNUT CREEK POLICE APREHEND SUSPECT IN FRAUDULENT INVOICING SCAM - SECOND SUSPECT ARRAIGNED   Martin Duane Smith, age 36, of Dublin was arrested Wednesday by Walnut Creek Police. Smith was wanted by the Santa Clara County District Attorney’s Office on a $1,000,000 arrest warrant. He is currently charged with one count of grand theft for stealing over $1,400,000 from Cisco Systems by invoicing the company for services which were not actually performed. He is also charged with twenty counts of money laundering for converting the stolen funds to cash to prevent law enforcement and tax officials from tracing the disposition of the money.    Smith was convicted last year of defrauding individuals investing in Mexican real estate. Smith, acting as their agent, misrepresented the value of the real estate to the unsuspecting victims. Smith told the sellers in one instance that he was selling property for $230,000 when he was actually selling it for $310,000. The buyers of the Cabo San Lucas properties learned after the fact that the suspect inflated the value and pocketed the difference. Smith defrauded sellers and buyers of at least three different properties in this manner.    Smith’s accomplice in the invoicing scam against Cisco, Gail Lavonne Morales, age 49, was arraigned today on charges of grand theft with excessive taking allegations. Morales is alleged in the reports filed with the court to have been the inside person at Cisco Systems who produced purchase orders and arranged for Smith’s fraudulent invoices to be processed. The reports further allege that Morales received half of the stolen money, delivered principally in cash by Smith and other conspirators.   The District Attorney’s Office suspects there may be other victims of Smith’s and Morales’ invoicing scams who are not currently aware they have been victimized. Anyone who has information about these crimes or has information as to Martin Smith’s or Gail Morales’ finances is asked to contact District Attorney Investigator Robert Traskowski at (408) 792-2938 or Deputy District Attorney Joseph Reader at (408) 792-2689.   ###

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