Ex Secretary Of Puerto Rico Department Of Sports And Recreation Indicted-Kickbacks etc

https://www.justice.gov/usao-pr/pr/ex-secretary-puerto-rico-department-sports-and-recreation-indicted-receiving-kickbacks

Department of Justice
U.S. Attorney’s Office
District of Puerto Rico

FOR IMMEDIATE RELEASE
Wednesday, June 21, 2017

Ex Secretary Of Puerto Rico Department Of Sports And Recreation Indicted For Receiving Kickbacks, Fraud, And Money Laundering

Six other individuals also charged in the $9.8 million conspiracy

SAN JUAN, Puerto Rico– Ramón Orta, former Secretary of the Department of Sports and Recreation (PR DRD), his Special Assistant Edgardo Vazquez-Morales, and four other individuals have been indicted and arrested for their participation in a conspiracy to steal federal funds involving fraudulently obtained contracts from the PR Department of Education (PR DOE) and the PR Public Housing Authority (PR PHA), announced U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico. Orta and Vázquez-Morales were also charged for soliciting and receiving multiple kickback payments from a seventh defendant pertaining to DRD’s lease of a facility in Guayama, Puerto Rico. The United States Department of Education, Office of Inspector General, is handling the investigation with the Federal Bureau of Investigation and the United States Department of Housing and Urban Development, Office of Inspector General.
(snip)

According to the indictment, the defendants used Orta-Rodríguez’ position as Secretary of PR DRD to benefit and enrich themselves and defraud the United States as follows:

•Orta-Rodríguez utilized his position as Secretary of PR DRD to solicit federal funds from the PR DOE and PR PHA based on material misrepresentations regarding PR DRD’s ability to perform the activities and the scope of the activities subject to the proposals. Orta-Rodríguez, as Secretary of PR DRD, entered into contracts with Rosso, for the administration of various projects funded with federal monies. Rosso did not participate in any competitive bidding or evaluation process for the award of these contracts, which totaled $10,510,460. The services were supposed to be rendered by PR DRD, pursuant to its contracts with the PR DOE and PR PHA.

•The PR DRD-Rosso contracts were inflated to provide net proceeds to Rosso, which were later distributed amongst co-conspirators. The co-conspirators split approximately $3.9 million in net profits from the PR DOE contracts. Orta-Rodríguez obtained net proceeds of approximately $799,740 for PR DRD on one education project. Orta-Rodríguez also disbursed $200,000 in discretionary funds to other co-conspirators to operate and promote boxing events through Global.

•DRD contracted the services of ROSSO to provide television programming services for one television show about public housing projects in Puerto Rico. SOSA agreed with the individual who provided the services, to inflate the invoices for those services and to produce a second television show, DRD.TV, for the DRD. In 2015, SOSA was paid the difference between the actual cost of the production of both shows and the inflated invoice cost, which was paid from HUD funds. In 2016, ROSSO was paid this difference. DRD was also able to use federal funding for the DRD.TV show, which was outside the scope of the federal funding. SOSA was paid $311,345.30 on the HUD contracts by the television producer. ROSSO was paid $237,609.12 by the producer on the HUD contracts. The total amount misapplied by ORTA and excessively paid on the HUD contract (including the DRD.TV show) was approximately $1,216,650. Federal funds fraudulently obtained by members of the conspiracy were utilized for business ventures, travel, and to make purchases for political campaigns and political parties.

•Orta-Rodríguez executed a five-year lease agreement with Estate A for $14,500 which was in excess of the $8,500 price proposed by Ortiz-Nieves. Ortiz-Nieves created Sports Consulting and caused the transfer of funds from Estate A to Sports Consulting so that cash withdrawals could be made to pay Orta-Rodríguez and Vázquez-Morales the kickback payments generated from the $6,000 difference of the lease agreement. Approximately $26,000 was paid, in cash, as kickbacks to Orta-Rodríguez and Vázquez-Morales.

The indictment also includes the following substantive charges: nine counts of wire fraud; two counts of mail fraud; five counts of aggravated identity theft; and twenty-seven counts of money laundering.
(snip)