Marcus Asay, 68, and Antonio Gastelum, 53, — an unsuccessful Fresno City Council candidate in 2016 and former Parlier city manager — were found guilty of a multi-million dollar fraud scheme on Tuesday.

Along with their company Agricultural Contracting Services Association, operating as American Labor Alliance, they were found guilty after a 19-day trial in Fresno federal court for a fraud scheme involving pensions, workers’ compensation, and healthcare exemptions, U.S. Attorney Phillip A. Talbert announced in a news release Thursday.

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Funds Spent on Dining Out, Travel, and Business Expenses

Asay, ALA’s founder and chairman, and Gastelum, who served as the company’s CEO, CFO, and compliance officer, were convicted of deceiving more than 3,000 individuals from 2011 to 2019.

Their activities included falsely promising to manage retirement funds through a 401(k) plan while diverting the money for personal and inappropriate business expenses. These expenses included dining out, travel, purchasing rare coins, transfers to Asay’s retirement account, and rent on his lakeside house in Fresno.

“In reality, they used the money for improper business and personal expenses,” Talbert said.

The loss caused by the pension fraud scheme was more than $750,000.

The jury also determined that ALA engaged in fraudulent workers’ compensation practices by falsely asserting coverage backed by national insurers to customers across multiple states, including California.

This scheme, which involved misrepresentation on certificates of insurance and policy declarations, resulted in a loss exceeding $2.25 million.

And, in a hardship exemption fraud scheme, they represented that for a few hundred dollars they could provide people with an exemption that would shield them from The Affordable Care Act’s health insurance requirement.

In fact, only government agencies could issue such exemptions. Moreover, the exemptions were free to those who qualified.

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Asay and ALA Try to Obstruct Justice

While authorities investigated, Asay and ALA attempted to obstruct justice by advising customers not to cooperate, court records stated.

Sentencing for Asay and Gastelum is scheduled for Oct. 21, 2024. Each faces a potential sentence of up to 20 years in prison and a substantial fine.

U.S. Attorneys Michael Tierney, Joseph Barton, and Stephanie Stokman are prosecuting the case.

Gastelum’s Failed Political Run

Gastelum ran for Fresno’s District 5 seat representing southeast neighborhoods in November 2016. He finished third with 17% of the vote behind winner Luis Chavez and runner-up Jose Barraza.

The city of Parlier later hired Gastelum as city manager — a position he retained while under federal indictment. Eventually, the city council appointed Sonia Hall to the position in November 2020.