Two businessmen, a certified public accountant, and four Puerto Rico-based companies have been indicted on charges of fraud, bribery, and money laundering. According to U.S. Attorney W. Stephen Muldrow, the individuals and companies allegedly carried out a scheme to fraudulently obtain federal recovery funds under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The indictment involves allegations of bribing a bank employee and laundering the illegal proceeds.
Beginning in May 2020 and continuing through November 2021, the defendants are accused of submitting at least 26 deceptive Economic Injury Disaster Loan (EIDL) and Paycheck Protection Program (PPP) applications, aiming to secure a total of over $2.2 million from the U.S. Small Business Administration (SBA) and a local bank. They allegedly bribed an employee of the bank to assist in the fraudulent submission and processing of these applications.
“PPP and EIDL loans were intended to help small businesses during the pandemic, not exploit Federal relief programs," stated Muldrow. He affirmed the commitment of the District of Puerto Rico to safeguard government programs from fraud.
The U.S. Secret Service executed a coordinated operation against what has been described as a sophisticated financial fraud network. Special Agent in Charge Rafael Barros from the Miami Field Office highlighted the operation's success, attributing it to the dedication of agents and law enforcement partners.
Special Agent in Charge Amaleka McCall-Brathwaite from the SBA Office of Inspector General expressed determination to hold perpetrators accountable, asserting their commitment to uncovering fraud. The IRS Criminal Investigation Division, represented by Special Agent in Charge Emmanuel Gomez from the Miami Field Office, emphasized that the misuse of federal funds would be met with the full weight of the law.
The court documents identify Edgardo Navarro Suárez, Ricardo Luis Navarro Suárez, and Ramón J. Valentín Montalvo, as well as the companies JCA Development, Inc., JCA Packaging Group, Inc., RVIP Group Corp., and JCA Industrial Supply Corp. as being involved in the fraudulent activities. The indictment describes how the defendants directed recipients of the fraudulent loans to remit portions of the proceeds and used these funds for prohibited personal and business expenses.
Further allegations suggest payments totaling at least $69,500 were made to influence and reward a bank employee, and recruitment efforts were made to obtain further fraudulent EIDL and PPP relief.
The defendants are set to appear in court before U.S. Magistrate Judge Giselle López-Soler. They face serious potential penalties, with possible sentences of up to 30 years for wire fraud and bank bribery, 20 years for specific money laundering offenses, and 10 years for additional money laundering offenses. The indictment also outlines the potential forfeiture of specific properties.
The investigation was a joint effort by several agencies including the United States Secret Service, SBA Office of the Inspector General, Treasury Inspector General for Tax Administration, IRS Criminal Investigations, and local Puerto Rican agencies. Assistant U.S. Attorney Daniel J. Olinghouse will prosecute the case.
An indictment is a formal allegation, and the accused are considered innocent until proven guilty in a court of law.