Federal prosecutors say a Cleveland pallet company owner and two former U.S. Cotton warehouse workers turned routine shipping paperwork into a long-running money machine, allegedly skimming close to $5 million from the company’s local operations.
An indictment filed Thursday charges Affordable Pallet owner Angel David Rosen and former U.S. Cotton employees Rebecca Bradshaw and Omar Negron in an alleged scheme that used bogus delivery tickets and fake invoices to bill U.S. Cotton for pallets that never showed up, then kicked cash back to insiders to keep the operation alive.
How prosecutors say the scheme worked
According to Cleveland.com, Rosen ran Affordable Pallet out of a South Collinwood Urbana Road location and allegedly funneled payments back to warehouse insiders. Prosecutors say about $1.2 million in cash kickbacks moved through the scheme, with roughly $687,000 going to warehouse lead Rebecca Bradshaw and about $537,000 to Omar Negron.
The indictment says Bradshaw regularly ordered pallets far beyond what U.S. Cotton actually needed, at times as many as 25,000 in a single month, then signed off on fraudulent delivery tickets that made it look like the goods had arrived. Those tickets allegedly let Rosen bill U.S. Cotton for phantom pallets, while the insiders pocketed their cut in cash.
Court filings and the civil judgment
The trouble first bubbled up inside the company in June 2021, court filings say, when U.S. Cotton spotted discrepancies between what was recorded as delivered and what was billed, and opened an internal investigation. GovInfo shows that a federal judge entered a default judgment in 2024, finding $4,956,267 in compensatory damages tied to the alleged scheme and describing a pattern of fraudulent delivery tickets and cash kickbacks. The filings say U.S. Cotton relied on a forensic accounting report to pin down the losses.
Affordable Pallet sold about 1.4 million pallets to U.S. Cotton between 2011 and 2021, and the civil complaint says the overbilling began as early as 2014, according to Cleveland.com. GovInfo shows Bradshaw was fired in April 2021 and Negron resigned in 2020. The records say U.S. Cotton sued the trio in 2024 and later secured a default judgment against Rosen in the civil case. Prosecutors say criminal charges were filed in U.S. District Court this month, and an arraignment date had not been set at the time of filing.
Legal outlook
Prosecutors have charged all three defendants with conspiracy to commit wire fraud, a federal offense that can trigger stiff penalties under the wire-fraud statute. The wire-fraud statute allows for sentences of up to 20 years in prison, while the general federal conspiracy statute carries its own maximum penalties, according to Cornell Law School’s Legal Information Institute.
For now, the case sits at the charging stage, and what happens next will hinge on what prosecutors can back up at arraignment, any grand jury proceedings, and the hearings that follow.
