Authorities have indicted two businessmen, a certified public accountant, and four Puerto Rico-based companies on charges of fraud, bribery, and money laundering. The U.S. Attorney for the District of Puerto Rico, W. Stephen Muldrow, announced that the defendants are accused of falsely obtaining federal recovery funds under the CARES Act, bribing a bank employee, and laundering the proceeds from these acts.
The case outlines a scheme from May 2020 to November 2021, where defendants submitted fraudulent applications for Economic Injury Disaster Loan (EIDL) and Paycheck Protection Program (PPP) funding. These applications reportedly aimed to collect over $2.2 million from the U.S. Small Business Administration and a local bank, identified as Bank 1. Defendants allegedly bribed a Bank 1 employee to facilitate the processing.
"PPP and EIDL loans were intended to help small businesses during the pandemic, not exploit Federal relief programs," Muldrow stated. He emphasized the commitment of the District of Puerto Rico to protect government programs from fraud.
The U.S. Secret Service executed an operation targeting the financial fraud network involved. Special Agent in Charge Rafael Barros from the Miami Field Office remarked, "The success of this operation is a testament to the dedication and collaboration of our agents and law enforcement partners."
Contributing to the investigation was the SBA Office of Inspector General. Special Agent Amaleka McCall-Brathwaite stated, "This investigation reflects the SBA Office of Inspector General’s determination to hold accountable those who attempt to defraud pandemic relief programs."
IRS Criminal Investigation joined the effort with Special Agent Emmanuel Gomez expressing, "Let this serve as a warning: those who believe they can exploit government programs for personal gain will face the full weight of the law."
The court documents name Edgardo Navarro Suárez, Ricardo Luis Navarro Suárez, Ramón J. Valentín Montalvo, JCA Development, Inc., JCA Packaging Group, Inc., RVIP Group Corp., and JCA Industrial Supply Corp. as the accused individuals and entities. Their alleged scheme involved fraudulent means to obtain loans and using these funds for personal benefits, including property purchases, contravening the loan programs' rules.
The indictment outlines bribes of at least $69,500 to a Bank 1 employee to aid the scheme. The defendants will appear in court before U.S. Magistrate Judge Giselle López-Soler in the District of Puerto Rico.
Conviction could result in severe penalties, including up to 30 years in prison for wire fraud and bribery, 20 years for money laundering, and additional forfeiture of properties connected with the fraud.
The investigation involved collaboration between several agencies, including the United States Secret Service, the Internal Revenue Service, and the Puerto Rico Police Bureau. Assistant U.S. Attorney Daniel J. Olinghouse leads the prosecution of the case.
An indictment is an allegation, and all defendants remain presumed innocent until proven guilty in a court of law.
