Trial began this week in San Diego federal court for a California businesswoman accused of carrying out a fraud scheme with her brother that allegedly began just weeks after she was released early from prison when former President Donald Trump commuted her sentence from a previous fraud conviction.
During opening statements Tuesday, a defense attorney mentioned Adriana Isabel Camberos’ prior conviction but did not tell the jury that she was among the 76 people granted clemency by Trump on his last day in office in January 2021.
Prosecutors allege that Camberos, 53, and her brother Andres “Andy” Enrique Camberos, 45, operated a fraud scheme similar to the one that previously sent Adriana Camberos and her husband to prison.
The government alleges that the siblings conspired to “unduly enrich themselves” by purchasing wholesale groceries and other consumer goods at a steep discount on the promise that they would be marketed in Mexico, but instead turned around and sold the products in the more lucrative U.S. market, undercutting business rivals.
A defense attorney for Andy Camberos, the founder and former CEO of Grasshopper Dispensary, Chula Vista’s first legal cannabis retailer, told the jury during opening statements that prosecutors weren’t wrong, but that selling Mexico-bound products in the U.S. was a “sharp business practice” and not an illegal conspiracy.
“We agree they engaged in product diversion,” Dan Goldman said, telling jurors that the practice is an open secret in the world of manufacturing, distributing and selling consumer goods. He said the way the Camberos siblings went about running several distribution companies was not illegal.
“You may find it distasteful or unethical,” Goldman told the jury. “But this is not a court of morality. This is a court of law.”
The defense attorney said the siblings should also be shielded from conviction because the entire time they were running the allegedly unlawful scheme, they were acting on the legal advice of several lawyers who greenlit their business practices.
The siblings face charges of wire fraud, mail fraud, money laundering and conspiracy. Prosecutors allege they paid themselves more than $12 million each and laundered the unlawful proceeds through real estate investments, a cryptocurrency account and the purchases of luxury vehicles, including a Ferrari and three Range Rovers.
Both siblings were thrust into the public spotlight in early 2021 when Trump commuted Adriana’s sentence about halfway through her 26-month federal prison term in a previous case. At the time, she went by her now ex-husband’s last name of Shayota. The White House said her clemency petition was supported by Chula Vista Mayor John McCann, who at the time was a member of the City Council. McCann said it was Andy Camberos, a former high school classmate, who asked him to support the effort to free his sister.
The commutation was a remarkable benefit for a mostly unknown federal prisoner on the same day Trump pardoned the likes of Steven Bannon, his former strategist, the rapper Lil Wayne and former San Diego-area Congressman Randy “Duke” Cunningham.
Adriana Camberos went to prison in 2019 for her role in a scheme to sell counterfeit 5-Hour Energy drinks. According to documents in that case, which was prosecuted in Northern California, a company run by Camberos and her ex-husband, Joseph Shayota, was left with 350,000 bottles of Spanish-label 5-hour Energy drinks after sales of the drink in Mexico did not go as well as expected.
Prosecutors said Shayota led efforts to relabel the drinks with counterfeit English packaging and resell them back into the more lucrative U.S. market. When the drinks sold, Shayota and others came up with a new scheme to make use of the high-quality counterfeit labels by concocting their own beverage that they packaged and sold as 5-hour Energy. Prosecutors said they sold 3.7 million bottles of the fake drink in 2012, much of which made it into stores in Northern California.
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Nine people charged in connection with that case pleaded guilty, while Shayota and Camberos were convicted at trial. Shayota, 72, is set to be released from prison early next year. His ex-wife served 13 months before Trump set her free.
Prosecutors alleged that within six weeks of regaining her freedom, Adriana Camberos and her brother began their new illegal plot using three businesses they owned. Prosecutors said the new plot was partly run through Baja Exporting, the same Otay Mesa business involved in the 5-Hour Energy drink scheme. And like the energy drink scheme, prosecutors said part of the new plot involved swapping Spanish labels for English labels so goods could be sold at higher U.S. prices.
Assistant U.S. Attorney Jordan Arakawa told jurors Tuesday that the Camberos siblings “went to tremendous lengths to hide” their illegal business practices from the manufacturers they victimized. They maintained an office in Mexico City and a warehouse in Tijuana to create the ruse of a thriving operation in Mexico, Arakawa said. And she showed the jury a photo of a model standing behind a product display table in a Mexican store, which the prosecutor said was another ruse to trick a manufacturer into believing its goods were really being sold in Mexico.
An attorney for Adriana Camberos declined to address the jury on Tuesday, saying he would save his opening remarks until after the prosecution presents its case.
Goldman, the attorney for Andy Camberos, told jurors that the business practices described by the government were just a part of the “hustling” and bartering that manufacturers and distributors expect while negotiating deals.
After the siblings were indicted last year, Chula Vista demanded that Andy Camberos divest from Grasshopper Dispensary or it would lose its license. A city spokesperson confirmed Tuesday that the city approved a change of ownership request in April that removed him from the ownership group.