Nipomo man pleads guilty to embezzling nearly $50 million

April 30, 2013

A Nipomo man pleaded guilty this afternoon to a fraud scheme that caused more than $47 million in losses to several victims, including his in-laws, a friend and five banks.

John Mark Moore, 51, operated the fraud scheme for well over a decade before he came clean to his family in the fall of 2011 and then to federal authorities last year.

Moore admitted that he forged loan documents while socializing with bank employees who failed to validate signatures, documents say. He blames bank employees for letting their guard down. Moore contends that because he was the son-in-law of bank board member Michael Cavaletto, employees allowed him to perpetuate the theft.

Appearing before United States District Judge David O. Carter, Moore pleaded guilty to four federal offenses: two counts of making false statements to Farm Credit West (FCW), a production credit association in Templeton, one count of mail fraud; and one count of wire fraud.

Over the course of 11 years, Moore embezzled approximately $24 million from his in-laws, plus another $23 million from five banks and another individual who was a friend and business associate of his in-laws.

In early 2000, Moore began managing the Cavaletto family trust. Cavaletto is an avocado grower and the co-owner of C&M Nursery in Nipomo. It was at this time Moore started applying for loans in Cavaletto’s name, without informing Cavaletto, according to documents obtained by CalCoastNews.

Moore used the money to support businesses that he and his father controlled. Over the course of approximately 11 years, Moore diverted approximately $13.8 million from his in-law’s business and personal accounts at Farm Credit West and transferred the money to his father’s company, Moore Agricultural Products (which after March 2004 was owned by his mother) or to companies Moore himself owned, such as American Microtech, LLC.

In another scheme, Moore fraudulently obtained funds by increasing his lines of credits he obtained in the name of himself, his wife, his companies, and his mother through various means, including forging his wife’ signature, submitting false personal financial statements, and pledging phony collateral to secure the loans. As a result of this fraudulent borrowing, the victim lending institutions – including FCW, Heritage Oaks Bank, Union Bank, Rabobank and Happy State Bank in Dumas, Texas – sustained aggregate losses of approximately $11.4 million.

Moore also bilked a friend and business associate of his in-laws beginning in 2002 when Moore entered into a series of ranching and farming ventures with the victim. As part of Moore’s scheme to defraud his in-laws’ friend, who is identified in court documents as GLM, Moore entered into a bogus contract in which he agreed to undertake various agricultural ventures and share the proceeds of these ventures with GLM in exchange for GLM providing the start-up capital. However, Moore had no intention of starting agricultural ventures, and instead he used GLM’s money for other purposes. As a result of Moore’s defendant’s fraudulent scheme, GLM lost more than $12 million, which was never repaid.

Moore blames a total system failure, along with bank employees who were easily manipulated by compliments, for his decade long history of embezzlement, according to records obtained by CalCoastNews.

The false statement charges each carry a statutory maximum penalty of 30 years in federal prison, and the fraud charges each carry a potential penalty of 20 years in prison. Therefore, as a result of his guilty pleas today, Moore faces a potential sentence of 100 years in federal prison. The actual sentence will be determined by Judge Carter when he sentences Moore on July 29.