Headlines From Our Twitter Feed

Thursday, October 22, 2015

Twenty-Five Individuals Indicted For Wire Fraud

Defendants Defrauded The U.S. Army National Guard Recruiting 
Assistance Program

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

Press Release

SAN JUAN, Puerto Rico – Twenty-five individuals have been charged in
fourteen separate indictments for their alleged participation in a  conspiracy
to defraud the United States and the National Guard Bureau  of money and
property, wire fraud, and aggravated identity theft, announced Rosa Emilia
Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. The
United States Secret Service is in charge of the investigation with the colla-
boration of the U.S. Army Criminal Investigation Command, the U.S. Postal
Service Office of Inspector General, the Department of Defense- Defense Cri-
minal Investigative Service, and the Puerto Rico Police Department. The in-
dictments were unsealed today upon the arrest of the defendants.

The indictments, returned yesterday, October 21, 2015, by a federal grand ju-
ry in the District of Puerto Rico, include the following individuals: Recruiters
Cristobal Colón-Colón; Ángel D. Rivera-Rodríguez; Enrique Costas-Torres;
Gregorio Quiñones-Pacheco; Guillermo Cruz-García; Edwin Izquierdo-Mon-
tañez; Luis De Jesús-Negrón; Gabriel González-Franco; Gilberto Rivera-Qui-
ñones; Juan Rivera-Rivera; and Héctor Rodríguez-Colón; and Recruiter Assis-
tants Axel Aponte-García; Gilberto Gierbolini-Emanuelli; Freddie García-Ru-
iz; Félix González-Rodríguez; Radamés Robles-Meléndez; Emilio Rivera-Mal-
donado; Carlos Meléndez-González; Natalio Soto-Rivera; José Rivera-Pereles;
Félix Lasen-Nieves; Ángel Perales-Muñoz; Alexis Betancourt-Jiménez; José
Velázquez-Lugo and Garby Ruiz-Rosado.

These charges stem from a scheme utilized by the defendants from 2007 thro-
ugh 2011. In or about September 2005, the National Guard Bureau, located in
Arlington, Virginia, entered into a contract with Document and Packaging Bro-
ker, Inc. (“Docupak”), located in Pelham, Alabama, to administer the G-RAP.
The G-RAP was a recruiting program designed to offer referral bonus payme-
nts to Army National Guard soldiers to recruit civilians to serve in the Army
National Guard. As part of the G-RAP, the National Guard Bureau reimbur-
sed Docupak for the recruiting referral bonus payments that Docupak paid to
participating soldiers. The National Guard Bureau also paid Docupak an ad-
ministrative fee for disbursing each of the referral bonus payments.

The Program had two primary participants: (1) Recruiters: whose job it was
to assist the Docupak subcontractors in enlisting new members into the Army
National Guard; and (2) Recruiter Assistants, who were Docupak subcontrac-
tors: whose job it was to identify and assist recruit new potential members in-
to the Army National Guard, and assist Recruiters with other related duties.
Under the contract specifications of the Program, only Recruiter Assistants
were eligible for recruiting referral bonuses.

The Program required Recruiter Assistants to establish an online account in
their name to record their referral and recruitment efforts. The Recruiter
Assistant would input the personal identifying information of each recruit
into the account. A Recruiter Assistant could receive a bonus between $500
and $1,000 for every referred soldier that enlisted in the Army National Gu-
ard, and an additional bonus between $500 and $1,000 once the referred sol-
dier was sent to Basic Training. If the referred soldier had previously served
in a different military branch, did not need to attend Basic Training, or joi-
ned the Army National Guard as an officer, the Recruiter Assistant could re-
ceive a bonus between $2,000 and $8,500. The Recruiter Assistant could re-
ceive the referral bonus payments either through direct deposit in a bank
account, or a VISA account.

It was the goal of the conspiracy for the Recruiters to enrich themselves un-
lawfully by defrauding the United States and performing acts in violation of
their official duties, in exchange for things of value. The Recruiter Assistants
provided things of value to the Recruiters, in exchange for their assistance in
defrauding the U.S. National Guard.

Defendants’ scheme knowingly caused the transfer, possession, and use with-
out lawful authority, of a means of identification of another person, which con-
tained the name, date of birth and social security number of potential soldiers;
and by submitting the Personal Identifying Information (PII) for unauthorized
purposes, they generated a fraudulent referral bonus of the G-RAP program,
that would then create an interstate wire transfer to the co-conspirator’s differ-
ent bank accounts.

An example of the scheme, as alleged in one of the indictments, is as follows:
The defendants allegedly cheated the program, known as the U.S. Army Na-
tional Guard Recruiting Assistance Program, or “G-RAP,” by having the Re-
cruiter Assistants create a G-RAP account and or allow the Recruiters to use
the RA’s G-RAP account to enter all information necessary to claim recruit-
ing bonuses that the RA’s had not earned. Defendants applied for the G-RAP
bonuses using personal identifying information (PII) given to the Recruiters
by enlistees who would go to the recruitment office seeking orientation to en-
list in the Puerto Rico Army National Guard (PRANG). The Recruiter’s would
obtain the PII in their official capacity as a Guard recruiter and would use the
RA’s G-RAP account to apply for fraudulent recruiting bonuses. The RA’s
were paid bonuses that would be deposited by Docupak in their personal bank
accounts or a VISA Card that was given to them by Docupak, based on the mis-
representations made by the defendants of the recruitment process. Some RA’s
withdrew a cash amount from each bonus and paid a kick-back of approximate-
lyhalf of the bonus to the Recruiters and in some cases the Recruiter’s kept the
bonuses for themselves.

“These charges clearly demonstrate that we will take firm action against those
who choose to exploit our military system for personal and criminal gain. We
remain committed to investigating and apprehending those who cheat the sys-
tem for personal gain, and will continue to work towards the eradication of this
type of fraud in Puerto Rico,” said U.S. Attorney Rosa Emilia Rodríguez-Vélez.

“The U.S. Secret Service will continue to aggressively pursue those that co-
mmit fraud and identity theft for their own enrichment. These crimes remain
a top investigative priority for our agency,” said Carlos Colón, Resident Agent
in Charge of the Secret Service Office in Puerto Rico.

“We should expect honesty and integrity from our military personnel,” said De-
fense Criminal Investigative Service Special Agent in Charge John F. Khin.
“This case demonstrates the commitment of DCIS, along with our investigati-
ve partners, to relentlessly pursue and bring to justice those who commit fraud
and violate positions of trust for personal enrichment.”

“The conduct alleged in the criminal Indictments is beyond disgraceful,” sta-
ted USPS-OIG Special Agent-in-Charge Eileen Neff. “The USPS-OIG, along
with our law enforcement partners, will continue to aggressively investigate
those who seek to defraud our government programs.”

If found guilty, defendants face a maximum penalty of ten years in prison for
the conspiracy, 20 years in prison for wire fraud, and a mandatory two year
consecutive term in prison for aggravated identity theft.

The case is being investigated by the U.S. Secret Service. The case is being
prosecuted by Assistant U.S. Attorney Olga B. Castellón-Miranda and Special
Assistant U.S. Attorney Amanda C. Soto-Ortega.

Indictments contain only charges and are not evidence of guilt. Defendants
are presumed to be innocent unless and until proven guilty. The investigation
is ongoing.

No comments:

Post a Comment