The Federal Prosecutor’s Office today filed an indictment against a former adviser to the mayor of Mayagüez, José Guillermo Rodríguez and six other people for allegedly committing the crimes of electronic fraud and money laundering.
Among the defendants are former judge Arnaldo Irizarry who also served as legal counsel to the city council until 2019. Federal authorities filed charges against Steve Minger, Stephen Kirkland, Alejandro Riera-Fernández, Joseph Kirkland, Roberto Mejill Tellado and Eduardo García-Jiménez. According to the indictment, Garcia-Jimenez also served as an advisor to the municipality of Mayaguez and the corporation Mayagüez Economic Development (MEDI). While Mejill Teulada, according to the indictment, was a contractor who provided financial advice to the city council.
According to the indictment, between March 2016 and June 2018, the defendants coordinated a scheme to defraud the municipality of Mayagüez and MEDI of funds that belonged to the city council. The fraud also allegedly originated after the defendants misrepresented an investment of $ 9 million with municipal and MEDI funds. Irizarry is facing 4 criminal charges: one for conspiracy to commit electronic fraud, two for electronic fraud and money laundering.
By the scheme, the defendants allegedly used about 13 existing corporations and other ghosts to receive and transfer hundreds of thousands of dollars belonging to the municipality of Mayagüez. These funds, according to the federal prosecutor’s office, were intended for investment.
According to the indictment the $ 9 million investment arose after between 2014 and 2016, the municipality of Mayagüez received a million-dollar allocation for improvements to the City Council’s Trauma Center. Of allocated money, Mayaguez received about $ 8,700,000 of which was transferred to the city council. Thus, the municipality then transferred the total of $ 9 million to the MEDI -an entity created to promote the economic development of the municipality and promote infrastructure projects- to make an investment, as advised by Garcia -Jiménez.
García-Jiménez promised the municipality that this investment would generate large economic returns with a rate of return of over 8%. After receiving the $ 9 million, Garcia-Jimenez bought several bonds in the U.S. Treasury at a 2% interest rate. Instead, García-Jiménez -along with the other defendants- made transfers to personal accounts. The former adviser made a payment to the municipality of $ 1.8 million and assured him that it was a return on investment. However, according to the indictment, Garcia-Jimenez allegedly withdrew the funds from the initial $ 9 million investment.
On several occasions, García-Jiménez has allegedly made transfers of these funds to other bank accounts in coordination with Stephen Kirkland, who is a financial advisor at Union Banco Investment Services (Ubis). After transferring the balance to an account in LPL Financial, García-Jiménez would have tried in several occasions to hide to Individual C – a financial officer of this institution – around which these bottoms belonged to him to the municipality of Mayaguez.
After several transactions at four banks, the defendants began making withdrawals from these accounts for personal use. Of that $ 9 million, Joseph Kirkland, Stephen’s brother and president of a financial institution, transferred about $ 10,000 to a personal account at Heritage Oak Bank; about $ 500,000 was transferred to García-Jiménez’s personal account; a $ 100,000 transfer to Stephen Kirkland and $ 1,140,000 to a Garcia-Jimenez account at Wells Fargo Bank.
In 2016, García-Jiménez allegedly transferred $ 1.8 million to a MEDI account to make the corporation and the municipality believe that they had generated a return on investment when in fact it was funds obtained from the $ 9 million original principal.
According to the indictment, the defendants allegedly used the money to buy a marine boat, jewelry, clothing, tuition payments at a school, restaurants, utilities, credit card payments, home decor, property improvements such as building ‘a pool and mortgage payments.
Between April and December 2016, Irizarry would also have received some $ 126,100 from this investment.
On September 28, 2016, García-Jiménez asked one of his employees – individual D – to send a letter to the Director of Finance of the municipality of Mayagüez to indicate that the $ 9 million MEDI was still being invested . However, these funds were no longer being invested according to the indictment. In November 2017, García-Jiménez again asked the municipality to keep the investment for about three to five years as it could get 18% in interest rates and generate about $ 87,300 a month.
In April 2018, García-Jiménez again insisted to the municipality that the $ 9 million remained intact and ready to be reinvested.
Look at the accusation here:
21-082 indictment drafted by Metro Puerto Rico in Scribd