Five Individuals Arrested for Bank Fraud

U.S. Attorney's Office

San Juan

Press Release

SAN JUAN, P.R. – On October 5, 2016, a Federal grand jury returned a nine-
teen count indictment against five individuals for conspiracy to commit bank 
fraud, bank fraud, unlawful transfer, possession, and use of means of identifi-
cation during and in relation to an enumerated felony, and access device fraud,
announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the Dis-
trict of Puerto Rico. The investigation was led by the United States Secret Ser-
vice.

The indictment alleges that from on or about May, 2012, through on or about 
March, 2015, Frankie Ortiz-Jaime, Wilfredo Reyes-Hiche, Cesar Quiles-Perez,
 Linda Rivera-Ortiz and Javier Torres-Garay knowingly and willfully combin-
ed, conspired and agreed with each other, to execute a scheme and artifice to 
defraud and to obtain money from Banco Popular de Puerto Rico, First Bank,
and Oriental Bank which are federally insured financial institutions and to ob-
tain monies and funds owned by and under the custody and control of the fin-
ancial institutions.

As part of the conspiracy the defendants conspired to engage in deceptive con-
duct designed to fraudulently obtain monies and credit from federally insured 
financial institutions for the purchase of goods and the distribution of monies 
to the members of the conspiracy. The indictment alleges that the defendants 
would contact Telebanco Popular to request loans using the name and perso-
nal identification information of a recruit and proceed to provide false employ-
ment and income information. The recruits, aided and abetted by the other me-
mbers of the conspiracy, would submit false documentation regarding employ-
ment and income in order to obtain loans, lines of credit, and credit cards from
the financial institutions.

According to the indictment, the defendants would receive electronic transfers 
or official checks for the loan proceeds and divide the proceeds with other me-
mbers of the conspiracy. In some instances, loan proceeds and credit cards we-
re used to purchase vehicles, such as a BMW, a Raptor and Polaris. They wo-
uld also utilize the credit cards to obtain cash and make other retail purchases.

The indictment includes a forfeiture allegation of any property, constituting, 
or derived from, proceeds obtained, directly or indirectly, as a result of the 
violations such as U.S. Currency totaling $285, 270, and three vehicles.

“Sophisticated financial crimes such as this one cause painful long lasting 
loss to law abiding businesses thereby affecting our fragile economy. Prev-
ention and prosecution of crimes of this nature will remain a top priority for 
the U.S. Attorney’s Office.” said United States Attorney, Rosa Emilia Rodr-
íguez-Vélez.

The case is being prosecuted by Assistant U.S. Attorney Seth A. Erbe. The 
case was investigated by the United States Secret Service.


 If convicted on charges of bank fraud, the defendants face a sentence of up 
to thirty (30) years of imprisonment. Criminal indictments are only charges 
and are not evidence of guilt. A defendant is presumed innocent unless and
until proven guilty.

GDB Rejects Shutdown & Privatization Rumors

Press Release

Government Development Bank

April 1st, 2016


Today, Melba Acosta Febo, President of the Government Development Bank
for Puerto Rico ("GDB" or the “Bank”), issued the following statement in res-
ponse to several rumors recently reported in the media:

“The Government Development Bank became aware of rumors claiming that
a bill will be introduced today to shut down the Bank. This rumor is false – the
GDB will neither shut down nor be privatized.

This irresponsible rumor is damaging to the Bank as an institution, as well as
needlessly harmful to our employees and their families. Bank management has
met with employees and informed them that, due to the fragility of the Bank’s
liquidity, all available options are currently being reviewed. These options will
responsibly address the issues facing the Bank and will not involve the dismi-
ssal of public employees. As we have for weeks, GDB representatives continue
to engage with a considerable group of our creditors about the restructuring of
the GDB’s debt. As we have stated publicly, the Government is also considering
additional measures to address this situation, such as declaring a temporary mo-
ratorium on payments, and amending the GDB charter.

I, and representatives of the Puerto Rico Electric Power Authority (“PREPA”),
were recently in London attending meetings regarding the GDB’s and PREPA’s
soon-to-expire insurance policies. This was a long scheduled trip – though these
policies are active, we are in the process of negotiating their renewal. During the-
se meetings, I provided an overview on the Commonwealth’s finances, covering
the Krueger report, the Fiscal Adjustment Plan, the public offer made to bondhol-
ders and the status of the Commonwealth’s and PREPA’s debtrestructuring nego-
tiation processes.

As I have stated publicly on multiple occasions, including this week, it is impor-
tant that everyone in Puerto Rico understand that the GDB’s fiscal standing, as
well as the Commonwealth’s fiscal standing, is delicate due to the fiscal crisis we
are confronting. For this reason, the GDB’s Board of Directors and management
continue to urgently evaluate all available options to safeguard public finances.
We will continue to move forward on several initiatives simultaneously as no
final decisions have been made at this time.”

Puerto Rico News Digest For October 26, 2015

WATER RATIONING OVER FOR LA PLATA

Puerto Rico's water utility, AAA, has announced the end of  water
rationing for users served by the La Plata reservoir, due to heavy and
consistent rains over the area over the last few weeks. Rationing offi-
cially ended yesterday (Sunday), as rains over the weekend brought
the reservoir close to the point of overflowing. The Carraízo reser-
voir, which serves parts of the San Juan metro area along with La
Plata, had to have some of its floodgates opened to let out excess
water.

OBAMA RESCUE PLAN COULD EXCEED $5B/YEAR

From The San Juan Daily Star:

"The prospects for the Obama Administration plan moving forward
appear to be slim. The U.S. Treasury on Wednesday released a list
of proposals it wants Congress to enact to help the U.S. territory,
such as healthcare funding measures, tax and bankruptcy legislati-
on, and the earned income tax credit for residents. But without bi-
partisan support in Congress, Treasury is limited in what it can ach-
ieve, and anything that smells like a bailout for the island, struggling
with a $70 billion debt, is unlikely to get support, according to
Reuters..."

SECRETARY OF STATE BERNIER RESIGNS

From Caribbean Business:

"Puerto Rico State Secretary David Bernier announced Sunday that
his resignation will be effective Oct. 30. Bernier said, "I intend to as-
pire to elective office and I want my judgment and not a date to de-
termine my decision...As far as I'm concerned, I now have the nece-
ssary space, uninvolved with government to determine how I can ser-
ve the country," he said, emphasizing that he will not face the gover-
nor in the primaries, while also ruling out challenging Héctor O'Neill,
the mayor of Guaynabo, where Bernier resides..."

POPULAR & ORIENTAL REDUCE GOV'T EXPOSURE

From News Is My Business:

"Puerto Rico’s two largest banks — Banco Popular and Oriental —
confirmed separately on Friday that they’re working to reduce their
exposure to risk associated with the island’s government, which they
have financed in different capacities over the years. During discussi-
ons with analysts about their quarterly results, the top executives at
each bank said they are watching over the government’s declining li-
quidity and threat of a shutdown or default on its upcoming bond pay-
ments..."

Nine Individuals Indicted For Bank Fraud

Tuesday, October 6, 2015

Press Release

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








Defendants Are Facing A Forfeiture Allegation Of $92,600

SAN JUAN, Puerto Rico– Nine individuals have been indicted for their
alleged participation in a conspiracy to commit bank fraud, bank fraud,
access devices fraud, and/or aggravated identity theft, announced Rosa
Emilia Rodríguez-Vélez, United States Attorney for the District of Pu-
erto Rico. The United States Secret Service is in charge of the investi-
gation. The indictment was unsealed today upon the arrest of the defen-
dants.

The indictment, returned on October 1st, 2015 by a federal grand jury
in the District of Puerto Rico, includes sixteen charges against the follo-
wing individuals: Carlos Bauzó-Vázquez, aka “Carlitos;” Lesville Ma-
tos-Bauzó, aka “Billy;” Gloria Bauzó-Vázquez, aka “Milagritos;” Hen-
ry Pérez-Díaz; Laydy Mar Feliciano-Miranda; Héctor Vega-Rivera, aka
“El Gringo;” José Díaz-Caraballo, aka “Timana;” David González-Ferrer;
and Rafael González-Ferrer.

These charges stem from a scheme utilized by the defendants from app-
roximately July 2014 to April 2015 to provide false employment, income,
and residency information to Banco Popular de Puerto Rico in order to
receive multiple personal loans and lines of credit. A member of the gro-
up would call Banco Popular’s Telebanco Popular service and request a
loan using the name, birth date, and social security number of another de-
fendant. During the course of the call, false information would be provi-
ded to the bank regarding where the person lived and worked. Further,
false information would be provided regarding the person’s income.

Once the requested loan was approved pending the submission of suppor-
ting documentation, defendants would take false documents to the bank as
evidence of the information provided via telephone. In particular, the de-
fendants utilized fictitious companies and falsified payroll documents in
support of the loan requests. Defendants would then cash the loan checks
and distribute the cash to members of the conspiracy. This scheme was re-
peated multiple times. On at least one occasion, credit cards were reques-
ted using the same information and documentation fraudulently submitted
to the bank for the loan. Members of the conspiracy then made cash advan-
ce withdrawals from bank branches and Automated Teller Machines
(ATM’s).

The indictment alleges one count of conspiracy to commit bank fraud, a
violation of Title 18, United States Code, Sections 1349 and 1344; nine
counts of bank fraud, a violation of Title 18, United States Code, Section
1344, related to loan checks or cash advances fraudulently obtained from
the bank; five counts of aggravated identity theft, of a violation of Title 18,
United States Code, Section 1028A(a)(1), related to the possession and use
without lawful authority of a means of identification in relation to bank fra-
ud charged in the indictment; and one count of access devices fraud, a vio-
lation of Title 18, United States Code, Section 1029(a)(2), related to the
use of unauthorized access devices, credit cards, obtained with intent to
defraud. The total value of the fraud was approximately $92,600.

If found guilty, defendants face a maximum penalty of thirty years in pri-
son for conspiracy to commit bank fraud and bank fraud, ten years in pri-
son for access devises 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 be-
ing prosecuted by Assistant U.S. Attorney Seth Erbe.

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

Solimar Federal Credit Union Employee Pleads Guilty To Embezzlement Of Funds

Press Release

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









September 28, 2015

Today, defendant Tania Maldonado-Suárez pled guilty before United States
Magistrate Judge Marcos E. López to a one-count Information that charged,
from on or about October 26, 2005, continuing through on or about May 31,
2007, in the District of Puerto Rico, the defendant being an employee of So-
limar Federal Credit Union, an institution whose deposits were insured by
the National Credit Union Administration Board, with intent to defraud So-
limar Federal Credit Union, willfully misapplied, embezzled, abstracted, and
purloined the sum of approximately $474,894.69, announced Rosa Emilia
Rodríguez-Vélez, United States Attorney for the District of Puerto Rico.

Tania Maldonado-Suárez worked at Solimar Federal Credit Union and was
responsible for posting transactions in the financial institutions’ records. Du-
ring her employment with Solimar Federal Credit Union, Tania Maldonado-
Suárez, with the intent to defraud, did willfully misapply, embezzle, and pur-
loin funds that belonged to Solimar Federal Credit Union.  Specifically, Mal-
donado-Suárez withdrew funds from Solimar Federal Credit Union accounts
without authorization, failed to deposit checks into accounts, failed to post
payments on accounts, and granted unauthorized loans on accounts in order
to divert funds from these accounts to herself for her own pecuniary gain.

The case was investigated by the United States Secret Service with the colla-
boration of the Puerto Rico Police Department, and prosecuted by Assistant
United States Attorney Luke Cass.  The defendant faces a potential maximum
sentence of up to 30 years of imprisonment.