Tuesday, September 17, 2019

U.S. District Attorney on FEMA, Cobra fraud: We cannot reveal identity of Individual A

By on September 10, 2019

Grand jury indicts former contractor president, top federal official in probe into Puerto Rico disaster recovery contract

SAN JUAN — A month and two days after Hurricane Maria left Puerto Rico devastated and entirely without electrical service, Cobra Acquisitions and its then-president, Donald Keith Ellison, started winning contracts with the Puerto Rico Electric Power Authority (Prepa) that ended up totaling $1.8 billion through an alleged fraud, extortion and bribery scheme orchestrated with the deputy director of the Federal Emergency Management Agency (FEMA) Recovery Office, Ahsha Tribble.

Ahsha Nateef Tribble, former FEMA Region II, Deputy Regional Administrator (Fema.gov)

The aforementioned was established in an indictment returned Sept. 3 by a federal grand jury in the District of Puerto Rico, which includes 15 counts against Ellison, Tribble and Jovanda R. Patterson, who were arrested on charges of conspiracy to commit bribery of public officials; acts affecting a personal financial interest; false statements; disaster fraud; honest services wire fraud, Travel Act violations, and wire fraud.

“The accusation we announce today demonstrates how a senior FEMA executive and the president of the Cobra company agreed to enrich themselves illegally at the expense of the repair work on our electrical system after the passing of hurricanes Irma and María in September of 2017,” U.S. Attorney Rosa Emilia Rodríguez-Vélez, of the District of Puerto Rico, said at a press conference following the arrests in Florida, Oklahoma and San Francisco.

According to the indictment, on Oct. 19, 2017, Cobra obtained a first contract for $200 million with Prepa to repair the island’s electrical system, but after six amendments to that same contract, the figure rose to $945.4 million in a work period of only four months.

To achieve each of these amendments to the first contract, Cobra was represented by a person who the federal prosecution identifies as Individual A.

Who was Individual A, who on seven different occasions went to Prepa on behalf of Cobra to negotiate the first contract and the six subsequent amendments to that agreement, Caribbean Business asked the district attorney.

“We are not protecting that individual…it’s that, at this time, we cannot reveal their identity,” Rodríguez replied, adding that the investigation remains underway.

Several Caribbean Business sources close to Prepa indicated that during negotiations with the public utility, Cobra was represented by Arthur “Arty” Straehla, president of Mammoth Energy Services, Cobra’s parent company. However, it is unknown whether Straehla is the person referred to as Individual A in the federal indictment against Ellison and Tribble.

Despite being asked multiple times, Rodríguez avoided revealing the person’s identity.

According to the Registry of Corporations administered by the Department of State, on Oct. 13, 2017, Cobra was incorporated in Puerto Rico as a foreign company, and two days later obtained its first contract with Prepa. The resident agent of Cobra Acquisitions is the Prentice Hall Corporation System, which in turn obtains services from The Fast Solution.

On March 26, 2018 Cobra and Prepa signed a second contract for an additional $900 million with funds reimbursed by FEMA.

“In late 2017 or early 2018, Tribble and Ellison started a close personal relationship. Ellison gave Tribble things of value, while she provided him with information about Prepa that she obtained given her official position. As part of Ellison’s pattern of providing things of value to Tribble, he obtained a job in Cobra for her friend, the defendant Jovanda R. Patterson,” explained Rodríguez.

The gifts of value given by the president of Cobra to the FEMA regional administrator were a helicopter tour over Puerto Rico in February 2018; assistance procuring a place to live in New York in or about February 2018; the negotiation and hiring of Patterson by Cobra Energy; airfare from Miami to Orlando and first class tickets from San Juan to New York, provided personal security services and gave her access to his credit card, among others.

“Tribble influenced, provided advice and put pressure on Prepa executives, including, but not limited to, the executive director and directors of the different divisions of Prepa, so Prepa accelerated payments to Cobra, assigned tasks to Cobra instead of using Prepa employees and used Cobra in restoration work while rejecting offers from other contractors,” Rodríguez said.

The district attorney recalled that in February 2018, after an explosion at Prepa’s Monacillos Transmission Center that despite the utility having indicated it could attend the emergency with its employees, Tribble “insisted and put pressure on [Prepa] executives to use Cobra. She told them that if they did not use Cobra, FEMA would not reimburse them.”

U.S. Attorney Rosa Emilia Rodríguez Vélez (Juan José Rodríguez/CB)

“The actions of these people are embarrassing. They took advantage of one of the most vulnerable moments in the modern history of Puerto Rico to enrich themselves at the expense of the government. Now they will have to face the consequences before the federal authorities,” Rodríguez stressed.

If found guilty, the defendants face possible sentences of up to five years for conspiracy, travel act violations, conflict of interest and false statements, and up to 30 years for honest services wire fraud and disaster fraud.

Assistant U.S. Attorneys Myriam Y. Fernández and Seth Erbe are prosecuting the case presided by federal judge Francisco A. Besosa.

Prepa Executive Director José Ortiz said Tuesday that Cobra has collected $1.1 billion of the $1.9 billion it had in contracts. That balance corresponds to March, when the contract was canceled, Ortiz said, adding that “PREPA will soon request a meeting with FEMA officials to determine the next steps to follow.”

In a statement, FEMA said it “cannot comment on personnel matters; however, the Agency is fully cooperating with federal investigators.”

—Follow Limarys Suárez Torres on Twitter: @Limarys_Suarez