Recently indicted on charges including theft of government money and fraud, a mayor in Puerto Rico has been accused of illegally using nearly $3 million in federal funds from contracts fraudulently obtained from the Puerto Rico Department of Education. In a separate unrelated indictment, the former directors of finance for the northern town of Toa Baja were accused of using nearly $5 million in federal funds.
According to the indictment, Miguel Ortiz-Vélez, mayor of the municipality of Sabana Grande, conspired with Irving Riquel Torres-Rodríguez, former owner of Environmental and Sports Consultants Corp. (AESC), to fraudulently obtain federal funds from the U.S. Department of Education and Puerto Rico Department of Education. Torres-Rodríguez has previously pled guilty in two different cases, including theft of government property and money laundering.
Between 2013 and 2016, Ortiz-Vélez allegedly defrauded the federal government of nearly $3 million by misrepresenting the costs of government contracts. During that period, he received tens of thousands of dollars in cash kickbacks from AESC and Torres-Rodríguez.
On Thursday, the Justice Department announced Ortiz-Vélez has been charged with two counts for theft of government money and property, one count for conspiracy to commit wire and mail fraud, two substantive counts of mail fraud, and one count for money laundering. He is also facing forfeiture allegations and a potential money judgment of $2,904,920.00, the value of the two contracts fraudulently obtained from the Puerto Rico Department of Education.
In the second indictment, Victor Cruz-Quintero, former Director of Finance, and Ángel Santos-García, former interim Director of Finance of the Municipality of Toa Baja, were charged with theft, conversion, and misappropriation of funds from the U.S. Departments of Housing and Urban Development (HUD) and Health and Human Services (HHS). In October 2014, Victor Cruz-Quintero allegedly took more than $2.5 million in federal funds from HUD and later made additional transfers for unauthorized purposes from HHS and HUD totaling over $1.7 million between September 2014 and February 2016.
While serving as Toa Baja’s former interim finance director, Ángel Santos-García made similar transfers of federal funds from HHS and HUD for unauthorized purposes totaling $650,000 from three separate transactions.
On Tuesday, the Justice Department announced the two former directors of finance had been charged with theft, conversion, and misappropriation of funds from HHS and HUD. If convicted, the defendants could face possible sentences of up to 10 years for theft of government funds, misappropriation of federal program funds, and money laundering, and up to 20 years for mail fraud, and the wire and mail fraud conspiracy.
“Mayor Miguel G. Ortiz-Vélez deceived the public’s trust and used his public office to fraudulently obtain federal funds in order to supplement the finances of the municipality of Sabana Grande,” said U.S. Attorney Rosa Emilia Rodríguez-Vélez. “Corruption and fraud at any level of government betrays the ideals upon which our democracy is built. In regards with the investigation in Toa Baja, we will continue to follow the evidence in order to determine if other municipal officials were involved in the fraudulent scheme announced today.”
“The public must be able to trust the officials who are put in charge of government funds. Anyone who violates that trust will be brought to justice, because the citizens of Puerto Rico deserve no less,” stated Douglas Leff, Special Agent in Charge of FBI, San Juan.