Detectives this morning said they arrested Jose Teixeira, Sr., 47, of Stevinson and Elmiro "Tony" Belo, 59, of Escalon. Investigators anticipate more arrests, Deputy Royjindar Singh said in a release.
Teixeira was a truck driver; Belo owned one of two Oakdale dairies deputies allege was involved in the fraud.
Teixeira delivered milk to the Foster Farms Dairy Creamery in Modesto from dairies throughout the valley. While unloading the milk, detectives said, Teixeira would leave a couple thousand gallons of milk in his tank, then would leave and refill his tank at one of the two dairies. The dairy would be paid for all of the milk in the tank, including the couple thousand gallons that were left from the earlier delivery.
Singh said this morning that Teixeira made multiple trips a day, but only shorted Foster Farms when he was working with two dairies involved.
"They'd have to show it in their books," Singh said.
Foster Farms, which contacted detectives in December 2007 about the suspected fraud, estimated a loss of $4 million, Singh said.
Detectives believe Teixeira was working with Silveira Dairy in the 9400 block of Alvarado Road and Belo Dairy in the 11100 block of Cleveland Avenue. It wasn't clear this morning if the other arrests detectives anticipate are at the other dairy.
Investigators ask anyone with information about the case to contact Detective Mike Myers at 869-7162. Callers can also leave an anonymous tip by calling Crime Stoppers at 521-4636 and be eligible for a cash reward.