Navy vessel Arctic embezzlement trial starts
By TIM MCGLONE | The Virginian-Pilot | Published: March 12, 2014
NORFOLK — Ismael "Mike" Estrada was about to board a plane on his way to the Philippines in October when Navy investigators stopped him at the gate. They had some questions for him about $350,000 that was missing from the safe aboard the Navy supply ship Arctic.
Estrada denied taking the money, even though his fingerprints were all over the safe and some of the bundles of cash inside.
His lawyer, James Theuer, said others on the ship, including the captain, had access to the safe.
"I want to encourage you to have a little suspicion," Theuer told a jury Tuesday in U.S. District Court at the start of Estrada's trial.
Estrada, 65, faces one count of embezzlement. If convicted, he could face up to 10 years in prison.
The Arctic is authorized to carry $700,000 in cash to spend at foreign ports that don't take checks or credit cards and to offer payday advances to crew members. As the ship's purser, Estrada was the only person other than the captain authorized to access the safe and its contents.
Estrada had been on the Arctic since 2006 and had been a civilian employee of the Military Sealift Command for 14 years. Before that, he served 26 years in the Navy, retiring as a senior chief petty officer.
Last March, Estrada's command decided to transfer him to another supply ship, the Laramie, due to sequestration. The Arctic had been on a reduced operating status anyway and had not deployed for more than a year.
"The defendant had a problem," Assistant U.S. Attorney Christopher George told the jury. "He was going to be transferred. The defendant couldn't let that happen."
The ship's captain ordered a count of the money and told Estrada to empty the safe and deposit the cash in a Navy bank account.
Estrada stalled for weeks, George said, and tried to stop or put off his transfer.
Estrada, with two crew members, finally counted the money, but George said several stacks wrapped in plastic were untouched. Estrada told the crew members not to bother with those stacks, George said.
According to court filings, Estrada never took the cash to a bank and instead left the safe with the captain, saying that his boss, the head purser for the port, told him to leave the money there because he would eventually be returning.
Theuer said Estrada never deposited the money because there was so much confusion over the transfer due to lingering questions over sequestration.
When the Arctic's new purser took over and counted the money, he discovered that stacks that should have been 1,000 $100 bills were actually book-ended with hundreds but filled inside with 1's, 5's and 10's.
What was supposed to be $690,000 was actually $340,000. Estrada's fingerprints were discovered on bills in two of the stacks with the lower denominations, George said.
Federal prosecutors theorize that Estrada had been stealing from the ship's safe over a five-year period.
While he denied the allegations, Estrada said his financial condition in that period had become troubled and he had to take out loans to pay bills.
He was also nine years behind in filing his federal income taxes.
But Navy investigators say they found that puzzling. He earned around $120,000 a year as a purser, plus $50,000 or so in retirement and disability benefits, and lived aboard ship.
Estrada said he was supporting his wife and family, including a farm, back in the Philippines. That would explain, he told them, the $165,000 wire transfer to them in August last year.
When investigators stopped him at the Norfolk airport on Oct. 10, Estrada had a ticket to the Philippines. He said he would be back in 60 days. They refused to let him go and questioned him, for a third time, about the missing money before arresting him.
When an agent asked how his fingerprints got on the money, Estrada said, "I don't know sir," according to a transcript of the interview.
But Theuer said others, in addition to the Arctic's captain, had access to the safe after Estrada left for the Laramie.
Ask yourselves, he said, "who else opened that safe while he was gone? Who else has the motive to lie?"
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