Defendants Enter Pleas In Child Care Fraud Case; Lake Elsinore Woman Scheduled For June 10 Sentencing

As a Lake Elsinore woman awaits sentencing in a fraud scheme that drained hundreds of thousands of dollars from a state-run child welfare program, one of the other six defendants in the case changed her plea to guilty on Monday.

Esmeralda Garcia Martinez, 37, of Riverside withdrew her not guilty plea to misappropriation of funds -- one of seven felony counts with which she was charged in December.

Martinez, who is free on her own recognizance, reached a plea agreement during a felony settlement conference before Riverside County Superior Court Judge Becky Dugan.

Dugan set a sentencing hearing for June 20, when she is expected to dismiss the remaining charges. Dugan stipulated that Martinez will be ordered to pay $19,419 in victim restitution. There was no recommendation on a sentence.

Meantime, another defendant, Lake Elsinore resident Brenda Acosta, 31, pleaded guilty earlier this month to forgery and is slated for sentencing on June 10.

The other co-defendants in the case -- Stephanie Luna Vega, 38, of
Riverside; her mother, 61-year-old Sylvia Avila; Vega's father, Albert Lobato Luna, 60; his wife, Camilla Wright Luna, 61; and Vega's sister-in-law, Toni Catherine Luna, 40, of Riverside -- pleaded not guilty yesterday to grand theft, embezzlement, perjury, filing false documents and misappropriation of funds.

Vega was the alleged mastermind of the eight-year scheme, uncovered in 2009, according to the District Attorney's Office.

While Vega and Martinez were employed at the Riverside County Office of Education, they allegedly conspired to falsify records and create fictitious children to obtain money from the CalWorks child care program, prosecutors said.

At least $528,000 was misappropriated, with a large amount of the
taxpayer funds being diverted to the other defendants, according to
prosecutors.

Then-District Attorney Rod Pacheco detailed the defendants' scam during a Dec. 3 news briefing, describing how Vega and Martinez allegedly used their positions to set up phantom childcare providers and nonexistent children in need of CalWorks' benefits.

In some cases, Vega's family members were designated as providers and receiving checks for nothing more than having their names on documents filed with the county, according to Pacheco.

Under the CalWorks program, which is supported through state and federal funds and administered by individual counties, welfare recipients can receive subsidized daycare for their children -- the idea being that while the children are supervised, the mother or father can attend school or look for work.

According to Pacheco, the money goes directly to providers. But with the state allocating a limited number of funds each year to the program, not everyone who applies for publicly funded childcare services is granted access, he said.

Because of the defendants' actions, there was less money available for
families who genuinely qualified to receive childcare assistance, cheating them out of the opportunity, Pacheco said, noting that the system has inherent exposure to fraud.

The scheme was brought to authorities' attention after Vega's ex-husband discovered cash and documents while rummaging through a closet at the couple's former home last year, according to prosecutors.

If convicted, the defendants face prison terms ranging from six to 14
years. --City News Service and Toni McAllister contributed to this report.