Joseph Rodriguez, 71, of Irvine, California, pleaded guilty on Monday in federal court in Newark to one count of wire fraud, admitting that he obtained more than $4.6 million — yaani about 46 lakh dollars — from a New Jersey company using invoices for money that his customers never owed, the U.S. Department of Justice said.

Source: U.S. Department of Justice

U.S. Attorney Robert Frazer announced the plea, which Rodriguez entered before U.S. Magistrate Judge José R. Almonte. Rodriguez admitted the scheme in court; he has not yet been sentenced.

Invoices for debts that did not exist

According to court documents and statements made in court, Rodriguez's company, Old American Incorporated, signed a factoring agreement with the New Jersey company in January 2015. In factoring, a business sells its outstanding invoices to another firm for immediate cash and repays the money within a set period — in this agreement, 90 days.

Prosecutors say that between February 2023 and July 2023, Rodriguez submitted fraudulent invoices claiming millions of dollars in future accounts receivable. In fact, the customers named on those invoices owed Old American nothing, and there were no receivables to hand over. Relying on the fake paperwork, the New Jersey company sent Rodriguez more than $4.6 million in advance payments, which he did not return.

What happens next

The wire fraud count carries a maximum penalty of 20 years in prison and a fine of up to $250,000, or twice the gross gain or loss, whichever is greater. Sentencing is scheduled for February 23, 2027.

The Justice Department credited FBI special agents in Newark, under Special Agent in Charge Stefanie Roddy, with the investigation. The case is being prosecuted by Assistant U.S. Attorney Farhana C. Melo of the Economic Crimes Unit in Newark. Industry publication FunderIntel, which analyzed the plea, noted the fraud began eight years into an established factoring relationship — a pattern it said should worry commercial lenders, because controls are usually tightest at the start of a client relationship.