The United States Attorney's Office for the Northern District of California announced today that a former San Francisco School District Official, Desmond McQuoid, was sentenced on March 31, 2004 to 21 months in prison for mail fraud.  The sentence was handed down by U.S. District Court Judge Charles Breyer following a guilty plea on one count in violation of 18 U.S.C. § 1341.

Mr. McQuoid, 48 of Petaluma, and co-defendant US Machinery with offices in Fremont and South San Francisco were indicted by a federal grand jury on October 16, 2002, on seven counts of mail fraud  in violation of 18 U.S.C. § 1341.  Under the plea agreement, Mr. McQuoid pled guilty to count three of the indictment, and US Machinery pled guilty to counts one and six of the indictment.

In the plea agreement, Mr. McQuoid and US Machinery admitted to defrauding the San Francisco Unified School District out of $200,000.  Mr. McQuoid admitted that beginning 1996, he purchased computers and peripherals from US Machinery in contravention of the School District's purchasing procedures.  Mr. McQuoid then asked US Machinery to provide him with goods and services for his personal benefit, and for one of several side businesses he was developing with others, including a distance learning project.  These items included: food, DVDs, t-shirts, furniture, computer and camera equipment, plane tickets to Hawaii, New Zealand, Puerto Rico and other locales, hotel accommodations, beach house rentals, and training courses.

In his plea agreement, Mr. McQuoid also admitted that he directed US Machinery to include the costs of these items in the invoices submitted to the School District.  These items would be hidden in the invoices, either by using false names to describe the goods provided or by inflating the price of the goods actually supplied, or both.  US Machinery admitted that it kept separate records detailing these expenses which it would periodically send to Mr. McQuoid.  Both defendants admitted that they used the mails in furtherance of this fraudulent scheme.

Judge Breyer sentenced the Mr. McQuoid to 21 months in federal prison, the high end of the applicable range under the U.S. Sentencing Guidelines, as well as a three year period of supervised release.  The court also ordered restitution in the amount of $200,000, but the co-defendant U.S. Machinery paid the entire restitution as part of its sentence handed down last year.  The court ordered defendant McQuoid to begin serving his sentence on June 28, 2004.

The prosecution is the result of an 18 month investigation by agents of the Federal Bureau of Investigation.  Jeffrey L. Bornstein is the Assistant U.S. Attorney who prosecuted the case, with the assistance of Lori Lucchetti. 

All press inquiries to the U.S. Attorney's Office should be directed to Assistant U.S. Attorney Matthew J. Jacobs at (415) 436-7181.