Wednesday, July 8, 2020

Grand jury: Former Puerto Rico Sports Secretary Led $10 Million Fraud

By on June 21, 2017

SAN JUAN — A public corruption scheme that reached $10 million in fraudulent contracts with federal funds culminated Wednesday in the arrest and accusation of former Sports and Recreation Department Secretary Ramón E. Orta Rodríguez and six others.

According to the 62-page indictment, Orta Rodríguez received $27,000 in cash, a construction at his home with the same public funds and the payment of two trips to Toronto and Mexico in exchange for benefiting the co-conspirators to obtain contracts with the Sports Department fraudulently.

“The defendants today took advantage of their privileged position and defrauded the U.S. government in a scheme of contracts amounting to $10 million. As we have seen on too many occasions, the practice of granting often unnecessary contracts left and right to people and companies that do not have the merits or ability to render the services contracted has to end,” U.S. Attorney Rosa Emilia Rodríguez said during Wednesday’s press conference.

The indictment of 50 criminal charges for conspiracy, wire fraud, postal fraud, aggravated identity theft and money laundering was issued by a federal grand jury on June 20 against Orta Rodríguez; his special assistant at the department, Edgardo Vázquez Morales; the founder and president of Rosso Group, Oscar Rodríguez Torres; contractor and member of former gubernatorial candidate David Bernier’s finance team, CPA Miguel Sosa Suárez; the president of Administrative, Environmental and Sport Consultant Corp., Irvin Riquel Torres Rodríguez, and his wife, Cecilia Amador López; and the creator and owner of Sport Consultant, Juan Carlos Ortiz Nieves.

According to the federal indictment, the defendants used Rosso Group Inc., created in February 2013, to finance projects awarded by the Sports secretary under the administration of Gov. Alejandro García Padilla. The company received $8.7 million in federal funds as part of the scheme.

Likewise, the accused used, according to the indictment, the nonprofit Global Sport Initiative that promoted boxing events and was managed by Sosa Suárez to receive money as part of the scheme.

“According to the indictment, the defendants used the position of Orta Rodríguez in the government to benefit, enrich themselves and defraud the United States and the state government. Orta Rodríguez requested federal funds in the [Sports Department] and that were from the Department of Education and the Public Housing Administration using false information about the ability of his agency to carry out the activities suggested in the proposals,” Rodríguez Vélez said.

The U.S. attorney maintained that the former secretary signed contracts between his department and Rosso Group without a proposal or evaluation process for services rendered under contracts with Education and Housing having been initiated.

“Rosso Group inflated the prices of services to be provided under the contracts and the difference was distributed among the defendants. The co-conspirators used the profits to pay for travel, business investments, to make purchases for a political campaign and a political party,” the federal prosecutor explained.

When asked if the purchases were made for former Popular Democratic Party candidate Bernier, Rodríguez Vélez said she would not mention names nor parties, but added, “I can say the party was used.”

The indictment states that the former Sports secretary subcontracted the Rosso Group to carry out federally funded projects in violation of the agreement he had with the Education Department.

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