Federal prosecutors charge Keleher, Ávila and four others over contract fraud

On July 10, 2019, U.S. Attorney Rosa Emilia Rodríguez-Vélez for the District of Puerto Rico announced the charging and arrest of six people for a conspiracy to steal and convert federal funds through fraudulently obtained contracts from the Department of Education (PR DOE) and the Health Insurance Administration (ASES). The FBI investigated with the Offices of Inspector General of the U.S. Department of Education and of Health and Human Services.

A federal grand jury returned the indictment on July 9, 2019. There are 32 counts. Charged: Julia Beatrice Keleher, PR DOE secretary from January 2017 to April 2019; Ángela Ávila-Marrero, ASES executive director from February 2017 to June 25, 2019; Alberto Velázquez-Piñol, president of Azur, L.L.C.; Fernando Scherrer-Caillet, managing partner of BDO Puerto Rico, P.S.C.; Glenda E. Ponce-Mendoza, special assistant to Keleher; and Mayra Ponce-Mendoza, owner of Colón & Ponce, Inc. and Glenda’s sister.

According to the indictment, they used Keleher’s and Ávila-Marrero’s positions to benefit themselves and defraud the United States. Count 1 alleges wire-fraud conspiracy: steering PR DOE contracts to Colón & Ponce through a corrupt RFP. Though unqualified under the RFP, the firm received a $43,500 contract later raised to $95,000; the increase, the charging document says, partly paid the salary of a special assistant to Keleher. Counts 2–11 detail wire communications by Keleher and the Ponce-Mendoza sisters.

Count 12 charges Keleher, Velázquez-Piñol and Scherrer-Caillet with conspiring to violate 18 U.S.C. § 641 (theft and conversion of government money or property worth more than $1,000). The alleged scheme covers federal funds paid by PR DOE to BDO on several contracts for more than $13 million between January 2017 and April 2019. Despite express prohibitions, BDO subcontracted and paid Velázquez-Piñol, via Azur, a 10% commission; Azur allegedly received about $219,059 in commissions on those DOE contracts.

Count 19 charges Ávila-Marrero, Velázquez-Piñol and Scherrer-Caillet with the same type of § 641 conspiracy over ASES federal funds to BDO for $2.5 million (January 2017–June 2019). Ávila-Marrero allegedly passed internal ASES information to Velázquez-Piñol; at ASES boards she allegedly recommended canceling contracts and awarding them to BDO and another firm tied to him. Velázquez-Piñol allegedly received about $710,000 from BDO on the ASES contracts. There is also a money-laundering conspiracy against Velázquez-Piñol and Scherrer-Caillet, and six substantive money-laundering counts against Velázquez-Piñol.

If found guilty, they face up to 10 years for conspiracy and theft of government funds, and up to 20 years for wire fraud and money laundering. The release is clear: the charges are mere accusations; the accused are presumed innocent unless guilt is proven. Charge and arrest are not conviction. Assistant U.S. Attorneys José Capó-Iriarte and Marie Christine Amy are prosecuting the case.

Primary: U.S. Attorney’s Office, District of Puerto Rico release, justice.gov/usao-pr, July 10, 2019.