FBI Busts Fraud Ring In Puerto Rico, Arrest Former Education Secretary And 5 Others

The FBI just arrested six people in connection to massive fraud in Puerto Rico. The feds nabbed a few high-profile targets including the former Education Secretary and the former Health Insurance Administrator.

It seems to be just typical graft – rigging contracts for personal gain. Look, we know Puerto Rico is a mess – you can expect this to be the first of many indictments to come.

Imagine all the graft that happened after the hurricane and you have a good idea of where this is heading.

From NBC: Puerto Rico’s former secretary of education and five other people have been arrested on charges of steering federal money to unqualified, politically connected contractors.

Federal officials said Wednesday that the FBI has arrested former Education Secretary Julia Keleher, former Puerto Rico Health Insurance Administration head Ángela Ávila-Marrero, businessman Fernando Scherrer-Caillet and education contractors Glenda E. Ponce-Mendoza and Mayra Ponce-Mendoza, who are sisters. They face 32 counts of money laundering, fraud and other related charges.

FBI director Douglas Leff also confirmed the arrest of businessman Alberto Velázquez-Piñol, who was also indicted, during a press conference Wednesday morning.

According to Leff, Velázquez Piñol went to the sheriff’s office in Connecticut, where he lives, and turned himself in.

The alleged fraud involves $15.5 million in federal funding between 2017 and 2019. Thirteen million was spent by the Department of Education during Keleher’s time as secretary, while $2.5 million was spent by the insurance administration when Ávila was the director.

Keleher, a native of Philadelphia, drew controversy during her two-year tenure as the island’s education secretary. She closed hundreds of schools, citing the realities of a shrinking student population. She also implemented the island’s first charter school, hoping to expand these schools’ presence.

From The Miami Herald:

U.S. Attorney for Puerto Rico Rosa Emilia Rodríguez said Velázquez Piñol had improperly taken advantage of contacts in the education and health insurance agencies to win federal contracts and illegally used federal money to pay for lobbying.

Glenda E. Ponce-Mendoza worked as Keleher’s assistant and both she and her sister were friends of the former education secretary. Officials said Keleher bypassed regular bidding procedures to steer contracts toward her friends.

“It was alleged that the defendants engaged in a public corruption campaign and profited at the expense of the Puerto Rican citizens and students. This type of corruption is particularly egregious because it not only victimizes tax payers, it victimizes those citizens and students that are in need of educational assistance,” said Neil Sanchez, special agent in charge of the U.S. Department of Education’s Office of Inspector General’s Southern Region.

Rodríguez said Gov. Ricardo Rosselló was not involved in the investigation.

Rosselló said he was returning early from vacation in Europe to meet with legislators and members of his administration about the investigation.

“To maintain the trust of the people in the institutions of the government is a constant challenge that all of us who work in public service have,” he said in a statement. “That trust is torn when public officials or those related, are accused of crimes of corruption.”

Multiple Puerto Rican officials over a series of administrations have been hit by charges of corruption and misuse of funds.

“It’s a shame that we see this type of scheme, one after another,” Rodríguez said. “There’s much work to be done in Puerto Rico … this is the type of case that’s been seen so much, involving federal funds, and it’s shameful.”