French national pleads guilty in California to scheme to obtain millions in unclaimed property

A French national accused in an audacious scheme to pilfer millions of dollars from California’s unclaimed property fund by stealing identities and forging counterfeit documents pleaded guilty Monday in Sacramento federal court.

Gabriel Diop, 35, who said he had degrees in computer science and electrical engineering, entered the guilty pleas before U.S. District Judge William B. Shubb and could face a sentence of up to 182 years, as well as deportation.

Diop, who court documents say had homes in Malibu and Agoura Hills, was accused of filing claims to obtain millions from the state Controller’s Office’s unclaimed property fund, which holds about $8 billion in assets that can be returned to the rightful owners or their heirs through claims.

Court papers say that beginning in January 2019 and running through March 2021, Diop filed claims in the names of eight individuals for more than $9 million, sometimes using faked rubber notary stamps to confirm the identity of the claimant to the state.

Sometimes the claims were filed using unwitting companies that specialize in finding people with unclaimed property in the state system, so-called heir finders that receive a cut of whatever proceeds they are able to recover.

But an investigator at one of those firms, Pettinato & Associates, raised the first suspicions because the claimant had contacted the firm themselves seeking to recover funds, court records say.

Typically, such firms find people with unclaimed property and notify them that they may have money coming to them, court records say.

The first suspicious claim surfaced in March 2019, when Pettinato & Associates filed a notarized claim form for an individual in Fremont identified as “Victim 1” using a Massachusetts driver’s license, Social Security card and Pacific Gas and Electric bill as proof of identity, court records say.

“The State Controller’s Office approved the submitted claim,” court records say, issuing payments of $707,749.62 and $537,311.32 to the individual named in the claim.

“On or around October 11, 2019, an investigator with Pettinato & Associates contacted the State Controller’s Office with suspicions that numerous claims submitted by Pettinato & Associates — including the claim submitted in Victim 1’s name — may have been fraudulent,” court records say. “One fact that made the claims suspicious is that in each case, the claimants contacted Pettinato & Associates to request that firm’s services without Pettinato & Associates having first notified the claimants that they may be eligible for return of funds.

“After the State Controller’s Office was alerted to the potentially fraudulent nature of Victim 1’s claim, it re-examined the documents submitted in support of the claim. The State Controller’s Office then determined that all the supporting documentation it contained for the purposes of address verification — including the Massachusetts driver’s license and the Social Security card — appeared altered or entirely counterfeit.

“The State Controller’s Office also contacted the notaries whose purported stamps were used to notarize the documents and determined that the notary stamps used on the claim submitted by ‘Victim 1’ did not belong to the notaries, were not recorded by the notaries, and were counterfeit.”

Even the PG&E bill was phony, with a bar code on the envelope that went back to an entirely different address, court papers say.

Investigators began looking change-of-address filings made for the Fremont address with the U.S. Postal Service and found several asking that mail be forwarded to them from that home, including Diop and a person later identified as “Victim 2,” court records say.

The Controller’s Office found it had issued three payments of more than $592,000 in the name of “Victim 2,” but suspected the claims were fraudulent and had gone to someone else, court papers say.

“The State Controller’s Office’s suspicion was based on the fact that the handwriting on the claim form submitted in Victim 2’s name appeared similar to the handwriting on the claim form submitted in Victim 1’s name,” court records say. “Furthermore, similar to the claim submitted in Victim 1’s name, the claim submitted in Victim 2’s name contained a Florida notary stamp applied several times to each document, apparently by a person with little skill inking a rubber stamp.

“Further review of claims submitted to the State Controller’s Office as part of this investigation uncovered a claim using similar methods — submitted through Pettinato & Associates and containing a Florida notary stamp and similar handwriting to the claim forms in the names of Victims 1 and 2 — that was mailed to the State Controller’s Office using postage purchased at a post office self-service kiosk on April 6, 2017.”

Investigators then began studying change-of-address forms filed for various addresses linked to claims and eventually focused on an address in Malibu, where Postal Inspector Matthew Norfleet set up surveillance until he saw a Mercedes-Benz pull up and ran the plate, discovering it was registered to Diop, court records say.

Investigators then concocted a sting in which they had a torn envelope delivered to the address in a plastic bag marked with the words “We Care” in large letters, court records say.

“Such plastic mailers are typically used by the Postal Service to deliver mail that is damaged prior to delivery,” court records say, and investigators watched as Diop arrived at the mailbox and collected the plastic bag.

Within hours, someone saying they were looking for a check from the Controller’s Office called the postal service’s customer service line to say his check “for a ‘big amount’ of life insurance funds sent from the State Controller’s Office was missing because the caller received an empty envelope in a ‘USPS We Care plastic bag,’” court records say.

Someone also emailed the Controller’s Office asking for a replacement check and suggesting the forms for it be mailed to an Agoura Hills post office box, court records say.

Investigators later tied that P.O. box to Diop, court records say, leading to him being charged in a criminal complaint in February 2021 with mail fraud.

That led to an indictment in June 2021, and, ultimately, the filing of an information last week charging him with nine counts of mail fraud and a count of aggravated identity theft.

Diop, who faces sentencing Jan. 29, pleaded guilty without the benefit of a plea agreement and could face fines of up to $2.5 million, as well as an order to pay restitution.

Assistant U.S. Attorney Sam Stefanki said in court that Diop was able to obtain checks from the state for roughly $1.8 million before state officials became suspicious and began to investigate those claims and others Diop had submitted in other victim’s names.

A search of his home turned up phone notary stamps, multiple driver’s licenses from various states in various names, bank cards in various names, postal change of address forms and a checkbook in the name of one victim, Stefanki said.

Shubb pressed Stefanki and Diop’s federal defender, Doug Beevers, on what happened to the money Diop obtained and where any property he purchased might be, but got few specific answers.

“He spent a lot of it,” Beevers said. “He bought a lot of things. At this point, he doesn’t have any more money.”

Beevers acknowledged that Diop’s guilty plea could result in him being forced to leave the United States.

“It is highly likely to result in a deportation and cause other collateral difficulties in immigration court,” Beevers said, including a mandatory six-month detention by federal immigration authorities.

Diop faces up to 20 years on each of the nine mail fraud counts, and two years on the aggravated identity theft charge.