Hialeah businessman found guilty of food fraud at 200 child care centers

Sandra Ruballo and Carlos Montoya had a good thing going with the federal government for years.

Her North Miami-Dade company represented about 200 daycare centers that received federal subsidies for food programs benefiting low-income kids. His Hialeah catering business provided the daily meals for them.

The pair raked in millions through government contracts ­— until the feds figured out their business model was crooked: Exchanging bribes and kickbacks to secure catering contracts and inflating the number of meals provided to the daycare centers, according to an indictment.

On Friday, a Miami federal jury found Montoya, 47, guilty of conspiring to commit wire fraud and bribery. His sentencing is set for June 5 before U.S. District Judge Marcia Cooke.

Ruballo, 47, pleaded guilty to the wire-fraud conspiracy and related charges before Montoya’s trial started in March. She is scheduled for sentencing May 8.

Montoya’s defense attorney, Joseph Rosenbaum, argued Friday that his client ran a legitimate business, paid no kickbacks or bribes to Ruballo for the food contracts, and delivered all the meals to the child care centers.

But federal prosecutor Daniel Marcet asserted that Montoya paid $680,000 in kickbacks and an additional $160,000 in bribes to maintain his business relationship with Ruballo over six years. The prosecutor said she rigged catering bids and food contracts subsidized by the U.S. government’s Child Care Food Program.

“He was paying her and she protected him,” said Marcet, noting Ruballo even came to Montoya’s defense when parents complained to state Department of Health regulators about their children getting sick from his food.

“Sandra Ruballo wasn’t doing her job,” Marcet said. “She was just lining her pockets.”

Between 2012 and 2017, Montoya’s Healthy Children Catering did about $14 million in contracts with Ruballo’s company, Highland Food Resources. According to an indictment and other court records, Ruballo’s business represented the 200 South Florida daycare centers and arranged to provide their meals on a sliding-scale through the federal program.

“They lied on every catering contract,” Marcet told jurors. “It was a lie for money.”

At trial, Montoya took the witness stand, only to be caught in a lie on allegedly forged invoices reflecting he bought bread from a Hialeah bakery that had burned down in 2013 — before the purchases were made.

Prosecutors accused Ruballo of boosting government reimbursements for children’s meals “by adding food stamp numbers, falsifying signatures and modifying reported family income levels, in order to qualify for more free and reduced meals as part of the [program],” according to a criminal complaint.

As a result, the government paid higher reimbursements to her company and she kept a greater fee in representing the daycare centers.

Federal agents were able to build the bigger case against Ruballo and Montoya when a former Highland Food Resources program coordinator, Yudy Miranda, was arrested in late 2017 and began cooperating with prosecutors. Miranda, 38, eventually pleaded guilty and was sentenced to seven years in prison.