Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 1 of 44

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO

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UNITED STATES OF AMERICA,

INDICTMENT

V.

CRIMINAL NO. 19-^, r'tf>/)C^

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CRIMINAL VIOLATIONS:

[1] JULIA BEATRICE KELEHER,
Counts: 1-3, 10,12, 15-16,

[2] ANGELA AVILA-MARRERO,
A/K/A "ANGIE"

(Wire Fraud Conspiracy) Count 1

Counts: 19-23,25

18U.S.C.§§371,641

[3] ALBERTO VELAZQUEZ-PINOL,

(Conspiracy, Theft) Counts 12, 19

Counts: 12-32

18US.C. § 1343

[4] FERNANDO SCHERRER-CAILLET,

(Wire Fraud) Counts 2-11, 13-18, 20-25

Counts: 16,19,23-26,

18U.S.C.§1956(h)

[5] GLENDA E. PONCE-MENDOZA,

(Money Laundering Conspiracy) Count 26

Counts: 1,4-11

18U.S.C. § 1957

[6] MAYRA PONCE-MENDOZA,

(Money Laundering) Counts 27-32

18U.S.C.§ 1349

Counts: 1,3-6,9, 11

32 COUNTS
Defendants.

& FORFEITURE ALLEGATIONS

INDICTMENT
THE GRAND JURY CHARGES:

COUNT ONE
18 U.S.C. § 1349
(Conspiracy to Commit Wire Fraud)
Unless otherwise specified, at all times material to this Indictment:
1. The Puerto Rico Department of Education (hereinafter "PR DOE") was organized under

Article V, section 6 of the Constitution of the Commonwealth of Puerto Rico. The PR DOE
was responsible for the planning and administration of all public elementary, secondary

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and some post-secondary education throughout Puerto Rico.

2. The PR DOE administered various federal financial assistance programs funded by the
United States Department of Education (hereinafter "US ED") intended for students in
public and private schools.
3. Keleher & Associates, LLC (hereinafter "Keleher & Associates ) was a foreign for-profit

limited liability company organized under the laws of the District of Columbia and duly
authorized to do business in Puerto Rico from on or about April 21,2015, until on or about
January 25, 2018.

4. Keleher & Associates was owned and managed by [1] JULIA BEATRICE KELEHER
from April 21, 2015, until at least in or about 2017.
5. Keleher & Associates maintained a corporate bank account at Wells Fargo Bank, NA

managed and controlled by [1] JULIA BEATRICE KELEHER until at least In or about
June 2018.
6. On or about January 25, 2018, Individual A, an official of Keleher & Associates, was
authorized to execute all legal and administrative documents to "renounce" authorization
to do business in Puerto Rico.

7. [1] JULIA BEATRICE KELEHER was the Secretary of PR DOE from in or about
January 2017 until on or about April 1, 2019. While serving as Secretary of PR DOE, [1]
JULIA BEATRICE KELEHER was paid via professional services contracts by The
Puerto Rico Fiscal Agency and Financial Advisory Authority (hereinafter "FAFAA" or
"AAFAF").

8. The PR DOE utilized divisions and units within the PR DOE to manage different functions
and to coordinate the activities of the PR DOE. One such division within the PR DOE was

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the "Secretaria Auxiliar de Asuntos Federales" (Federal Affairs) unit, managed and
overseen by the "Secretaria AuxiUar" (Director).

9. Individual B was the Director of Federal Affairs from in or about January 2017 until in or
about August 2017. As such, she had authority to seek services for the unit, including via
requests for proposals under the PR DOE regulations.

10. In or about January 2017, [5] GLENDA E. PONCE-MENDOZA began working in PR
DOE representing herself to be Special Assistant to the Secretary. At that time, she was
not an employee nor had a contract with the PR DOE.

11. On or about March 28, 2017, [5] GLENDA E. PONCE-MENDOZA executed a
professional services contract to serve as a consultant for PR DOE. The professional

services contract was signed by [1] JULIA BEATRICE KELEHER and was set to expire
on June 30,2017. Pursuant to the terms of the professional services contract, [5] GLENDA

E. PONCE-MENDOZA would be paid a total of $30,800.00 from March 28, 2017, to
June 30, 2017, at a rate of$70.00/hour.
12. Colon & Ponce, Inc. (hereinafter "Colon & Ponce") was a for-profit corporation organized

under the laws of Puerto Rico on or about April 25, 2006.

13. [6] MAYRA PONCE-MENDOZA was the sister of [5] GLENDA E. PONCEMENDOZA and acted as corporate official and owner of Colon & Pence.

THE CONSPIRACY
14. From in or about January 2017 through in or about April 2018, in the District of Puerto
Rico and within the jurisdiction of this Honorable Court,

[1] JULIA BEATRICE KELEHER,
[53 GLENDA E. PONCE-MENDOZA, and

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[6] MAYRA PONCE-MENDOZA,
the defendants herein, and others known and unknown to the Grand Jury, did knowingly

and willfully conspire and agree with each other to commit an offense against the United
States, that is, devising a scheme and artifice to defraud and obtain money and properties
by means of false and fraudulent pretenses, and promises, and in doing so, transmitting and
causing to be transmitted by means of wire communications in interstate or foreign
commerce, writings, signals, and email communications for the purpose of executing such

scheme and artifice to defraud, in violation of Title 18, United States Code, Section 1343.

PURPOSE OF THE CONSPIRACY
15. The purpose of the conspiracy was to steer contracts between the Puerto Rico Department

of Education and Colon & Ponce. This was accomplished through a corrupted bidding
process wherein Colon & Ponce was provided with a competitive advantage based in part,

on the close relationship between [1] JULIA BEATRICE KELEHER, [5] GLENDA
PONCE-MENDOZA, and [6] MAYRA PONCE-MENDOZA.

OVERT ACTS IN FURTHERANCE OF THE CONSPIRACY
16. In furtherance of the conspiracy, and to accomplish its purpose, the co-conspirators (both

indicted and unindicted herein), committed the following overt acts in the District of Puerto
Rico and elsewhere:

17. In or about 2017, while working at the PR DOE, and representing herself to be a Special
Assistant to the Secretary of PR DOE, [5] GLENDA E. PONCE-MENDOZA assisted
Colon & Ponce and her sister, [6] MAYRA PONCE-MENDOZA, in securing a contract

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with PR DOE.
18. On or about March 29, 2017, [6] MAYRA PONCE-MENDOZA submitted a proposal to
PR DOE for services to be rendered by Colon & Ponce, all via email to her sister, [5]
GLENDA E. PONCE-MENDOZA.
19. On or about April 11, 2017, [5] GLENDA E. PONCE-MENDOZA forwarded the Colon

& Ponce proposal from her sister [6] MAYRA PONCE-MENDOZA to [1] JULIA
BEATRICE KELEHER. After receiving the proposal from Colon & Pence, [1] JULIA
BEATRICE KELEHER instructed PR DOE employees to award a contract to Colon &
Ponce.

20. PR DOE regulations required a selection process, known as Request For Proposal "RFP",
to award a contract for the services involved in the Colon & Ponce proposal submitted to

the PR DOE.
21. Although the PR DOE Office of Federal Affairs had not requested services such as those
offered by Colon & Ponce, Individual B, then Director of Federal Affairs, was instructed
by [1] JULIA BEATRICE KELEHER to award such a contract to Colon & Ponce.
22. On or about May 16, 2017, a RFP was sent by PR DOE to [6] MAYRA PONCEMENDOZA and six other competitor company representatives requesting proposals for
services.

23. On or about May 17, 2017, [5] GLENDA E. PONCE-MENDOZA visited Individual C,
a PR DOE employee in charge of handling the RPF involving Colon & Ponce. [5]
GLENDA E. PONCE-MENDOZA asked Individual C about the status of the process,
despite the May 22, 2017 deadline established in the RFP. [5] GLENDA E. PONCE-

MENDOZA then informed Individual C that [1] JULIA BEATRICE KELEHER had

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 6 of 44

already received the proposal and wanted to know when the process would be finalized.
24. Seven vendors were invited under the RFP of which five companies, including Colon &
Ponce, timely submitted proposals.

25. On or about May 23, 2017, via telephone and via email, the US Department of Education
Office of Risk Management reminded and advised [1] JULIA BEATRICE KELEHER
of her duty to comply with the applicable regulations for awarding procurement contracts,
with specific reference to the Colon & Ponce contract.

26. On or about May 23, 2017, after evaluating the five proposals, the original RFP was
amended by PR DOE. PR DOE requested that the length and hours of the contract be
shortened to no more than six months. The deadline to submit an amended proposal was

May 24, 2017 at 4:30 p.m.
27. After receiving the amended RPP from PR DOE, on May 23,2017, [6] MAYRA PONCEMENDOZA forwarded the amended RFP to her sister, [5] GLENDA E.PONCEMENDOZA, who was acting as a Special Assistant to [1] JULIA BEATRICE
KELEHER.
28. After receiving the amended RFP from [6] MAYRA PONCE-MENDOZA, on May 24,
2017, [5] GLENDA E. PONCE-MENDOZA fox-warded the amended RFP to Individual
A, an official ofKeleher & Associates.

29. On May 24, 2017, Individual A emailed and instructed [5] GLENDA E. PONCEMENDOZA on how to amend the Colon & Ponce proposal. Individual A instructed [5]
GLENDA E. PONCE-MENDOZA to add her own work and experience to the Colon &
Ponce proposal without disclosing [5] GLENDA E. PONCE-MENDOZA's identity.
30. On May 24, 2017, Colon & Ponce submitted an amended proposal to PR DOE. Following

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 7 of 44

the electronic submission of the amended proposal to PR DOE, [6] MAYRA PONCE-

MENDOZA emailed [5] GLENDA E. PONCE-MENDOZA on May 24, 2017,
confirming the submission to PR DOE.
31. On May 25,2017, a PR DOE internal memo was sent to Individual B indicating that Colon
& Ponce was recommended for the contract.

32. Individual C, the PR DOE Process Official for Fund Adjudication Unit, concluded that
Colon & Ponce was the only company not qualified for the contract, and was the worst

applicant. Individual C refused to sign the letter selecting Colon & Pence because the
selection letter claimed that Colon & Ponce was qualified, when in fact, it was not.
33. On or about June 8, 2017, Colon & Ponce executed contract 2017-AF0220 with PR DOE.
The total amount of the contract was $43,550.00, and it was set to expire on December 31,

2017.
34. Individual B executed contract 2017-AF0220 on behalf of PR DOE because she was

pressmed to do so by £1] JULIA BEATRICE KELEHER.
35. On or about June 17, 2017, Individual D sent an email to [1] JULIA BEATRICE
KELEHER forwarding the resume of Individual E, his former 2016 gubernatorial
campaign director.

36. On or about July 6, 2017, Individual D sent an email to [1] JULIA BEATRICE

KELEHER, copying Individual E, so that [1] JULIA BEATRICE KELEHER could
meet with her and share employment options at the PR DOE. In the email. Individual D
recommended that the meeting be held outside of the PR DOE.
37. On or about July 11, 2017, [6] MAYRA PONCE-MENDOZA sent an email to [5]
GLENDA E. PONCE-MENDOZA containing proposed amendments to the Colon &

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Ponce contract, based on work performed with Individual A, in order to discuss with [1]

JULIA BEATRICE KELEHER. The proposed amendment included an increase of
$54,800.00, for a total amended contract value of $98,350.00.

38. On or about July 18, 2017, [1] JULIA BEATRICE KELEHER forwarded Individual E's
resume to Individual F, who acted as one of her Special Assistants.

39. In or about August, 2017, [1] JULIA BEATRICE KELEHER became aware that the
appointment of Individual E as a government employee would not be feasible.

40. In or about August 2017, Individual E was informed by [1] JULIA BEATRICE
KELEHER that her payments as a Special Assistant would be made by Colon & Ponce, a
company Individual E was not familiar with.
41. On or about August 8,2017, [6] MAYRAPONCE-MENDOZA sent a draft proposal with
amendments to the Colon & Ponce contract number 2017-AF0220 for review by [5]
GLENDA E. PONCE-MENDOZA and Individual A. The proposal contained various
options, including a proposed increase in the value of the contract.

42. On August 21, 2017, [6] MAYRA PONCE-MENDOZA submitted a proposal for an
amended contract to [1] JULIA BEATRICE KELEHER. That same date, [1] JULIA

BEATRICE KELEHER responded via email to [6] MAYRA PONCE-MENDOZA
advising [6] MAYRA PONCE-MENDOZA that revisions were required.
43. On August 22, 2017, [6] MAYRA PONCE-MENDOZA sent a further email to [1]
JULIA BEATRICE KELEHER containing a revised proposal to amend the Colon &
Ponce contract. This particular proposal intended to increase the contract value to

$455,100.00.
44. On or about August 24, 2017, [1] JULIA BEATRICE KELEHER forwarded [6]

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 9 of 44

MAYRA PONCE-MENDOZA's August 22, 2017 email to Individual G, a PR DOE
employee, and Individual F, advising them: "Check this; should be ok to go".
45. In or about August 2017, at the direction of [1] JULIA BEATRICE KELEHER,
Individual E was provided with an official PR DOE email address even though at that time
Individual E was not an employee nor a contractor at the PR DOE. Individual E then used
her official email address to communicate with Puerto Rico government officials,

representing herself to be an "Ayudante Especial" (Special Assistant) in the Office of the
Secretary of the Department of Education.

46. On or about September 1, 2017, [1] JULIA BEATRICE KELEHER emailed Individual
B, Individual E, and [5] GLENDA E. PONCE-MENDOZA, regarding the Colon & Ponce
contract.

47. On or about September 11, 2017, Individual E sent an email to a federal agent of the United
States Department of Homeland Security utilizing a personal Gmail address wherein she
represented herself to be an "Ayudante Especial" (Special Assistant) to the "Secretaria de
Educacion" (Secretary of Education), even though at that time she was not an employee
nor a contractor at the PR DOE. In the email, Individual E requested information from the

federal agent in connection with her task of drafting PR DOE'S security plan.
48. On or about September 13, 2017, [1] JULIA BEATRICE KELEHER approved the
request for authorization to amend the Colon & Ponce contract for an initial increase of

$51,450.00.
49. On or about October 25, 2017, an amended contract, 2017-AF0220-A, was executed
between Colon & Ponce and the PR DOE. The total value of the amended contract became
$95,000.00.

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50. Individual E was paid by Colon & Ponce from the $51,450.00 added to the original
$43,550.00 contract as follows:

Check Number

Check Dated

Check 1281
Check 1284
Check 1285

January 13,2018

Amount

April 13, 2018
April 13, 2018
Total

$1,593.00
$6,472.80
$7,551.60
$15,617.40

51. During the year 2017, [5] GLENDA E. PONCE-MENDOZA received monetary
payments from Colon & Ponce for services rendered totaling approximately $16,425.00,
plus at least $834.60 in expenses.

All in violation of Title 18, United States Code, Section 1349.

COUNTS TWO TO ELEVEN
18 U.S.C. § 1343
(Wire Fraud)
52. The allegations contained in Count One, paragraphs 1-51, of this Indictment are re-alleged
and incorporated herein by reference.
53. On or about each of the dates set forth below, in the District of Puerto Rico,

[1] JULIA BEATRICE KELEHER,
[5] GLENDA E. PONCE-MENDOZA, and
[6] MAYRA PONCE-MENDOZA,
defendants in each count when named below, for the purpose of executing the scheme
described Count One, and attempting to do so, caused to be transmitted by means of wire
communication in interstate commerce the signals and sounds described below for each
count, each transmission constituting a separate count:

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Count
2.

Date
August

24,2017

From

[1] JULIA
BEATRICE
KELEHER

To
Individual G and
Individual F

Description

Email forwarding the revised
Colon & Ponce proposal to
amend the existing contract with
an annotation that it "should be
ok to go"

3.

August

22,2017

[6] MAYRA

[1] JULIA
BEATRICE

Email submitting a revised

KELEHER

amend the existing contract

[6] MAYRA

[5] GLENDA E.

Submitting a draft proposal with

PONCE-

PONCE-

amendments to the Colon &

MENDOZA

MENDOZA and

Ponce existing contract

PONCE-

MENDOZA
4.

August 8,

2017

Colon & Ponce proposal to

Individual A
5.

July 11,

2017

[6] MAYRA

[5] GLENDA E.

Email containing proposed

PONCE-

PONCE-

amendments to the Colon &

MENDOZA

MENDOZA

Pence contract to be discussed

[5] GLENDA E.

KELEHER, including an
increase of $54,800
Email forwarding an email with
the submission of the updated
Colon & Ponce proposal to PR

with [1] Julia Beatrice

6.

7.

May 24,

2017

PONCE-

MENDOZA

MENDOZA

May 24,

Individual A

[5] GLENDA E.

Email instructing Glenda E.

PONCE-

PONCE-MENDOZA on how to

2017

8.

[6] MAYRA

May 24,

2017

PONCE-

MENDOZA
[5] GLENDA

Individual A

E. PONCE-

MENDOZA

DOE

amend the Colon & Ponce

proposal to the PR DOE
Email forwarding the email from
Mayra PONCE-MENDOZA in
which she forwarded the email
from the PR DOE from May 23,
2017 requesting Colon & Ponce
to update the billing rate section
in the proposal for services

already submitted to the PR

DOE
9.

May 23,

2017

[6] MAYRA

[5] GLENDA E.

Email forwarding an email from

PONCE-

PONCE-

MENDOZA

MENDOZA

the PR DOE from May 23,2017
requesting Colon & Ponce to

update the billing rate section in
the proposal for services already
10.

April 11,

2017

[5] GLENDA

[1] JULIA

E. PONCE-

BEATRICE
KELEHER,

MENDOZA

11

submitted to the PR DOE
Email forwarding a Colon &
Ponce proposal for services for

the PR DOE

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 12 of 44

11.

March 29,

2017

[6] MAYRA

[5] GLENDA E.

Email forwarding a Colon &

PONCE-

PONCE-

Pence presentation for services

MENDOZA

MENDOZA

to PR DOE

All in violation of Title 18, United States Code, Section 1343.

COUNT TWELVE
18 U.S.C. § 371
(Conspiracy to Commit an Offense Against the United States)

Unless otherwise specified, at all times material to this Indictment:
54. The allegations contained in paragraphs 1^2 and 7-11 are re-alleged and incorporated
herein by reference.
55. BDO Puerto Rico, P.S.C. was a for-profit professional services corporation originally
organized under the laws of Puerto Rico on or about January 26, 2000, under its former
name Scherrer, Hernandez & Co., CPA, P.S.C.

56. HLB Parissi P.S.C. ("Parissi") was a for-proflt professional services coi*poration originally
organized under the laws of Puerto Rico on or about May 2, 2002, under its former name
Rodriguez-Parissi, Vazquez & Co.

57. On or about July 1, 2016, Parissi executed contract 2017-AF0007 with PR DOE to provide
technical and finance assistance to the Financial Affairs unit of the PR DOE. The total
value of the contract was $430,200,00, and it was set to expire on June 30, 2017.
58. BDO Puerto Rico, P.S.C. and Parissi executed a Certificate of Merger dated December 31,
2016, wherein BDO Puerto Rico, P.S.C. and Parissi memorialized an agreement to merge
pursuant to the terms of an Agreement of Merger, all effective June 30, 2017. Following
the merger, the company was known as BDO Puerto Rico, P.S.C. (hereinafter "BDO"),

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59. On or about November 3, 2016, BDO executed contract 2017-AF0159 with the PR DOE
to provide auditing services to the PR DOE. The total value of the contract was
$199,500.00, and it was set to expire on or about June 30,2017.

60. [4] FERNANDO SCHERRER-CAILLET was the managing partner ofBDO.
61. AZUR, L.L.C. (hereinafter "Azur") was a for-profit limited liability company organized
under the laws of Puerto Rico on or about June 5, 2013.

62. [3] ALBERTO VELAZQUEZ-PINOL was the president, vice president, treasurer, subtreasurer, secretary, sub-secretary and owner ofAzur.

THE CONSPIRACY
63. From in or about January 2017, through In or about April 2019, in the District of Puerto
Rico and within the jurisdiction of this Honorable Court,

[1] JULIA BEATRICE KELEHER,
[3] ALBERTO A. VELAZQUEZ, and
[4] FERNANDO SCHERRER-CAILLET,
the defendants herein, did knowingly and willfully conspire, combine, confederate, and
agree with each other and with other individuals known and unknown to the Grand Jury,
to commit an offense against the United States, to wit: theft and conversion of government

money and property in excess of $1,000.00, in relation to federal funds paid by PR DOE
to BDO, in violation of Title 18, United States Code, Section 641.

PURPOSE OF THE CONSPIRACY
64. The pmpose of the conspiracy and scheme to defraud was for the defendants to utilize the

position of public officials within the government of the Commonwealth of Puerto Rico
to benefit and enrich themselves through fraud and the theft of government funds.

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MANNER AND MEANS OF THE CONSPIRACY
As part of the manner and means of the conspiracy:
65. Defendants and other co-conspirators exchanged email communications containing
internal government information regarding government contracts.
66. Government contract balances were disclosed to non-government employees for use in the
submission of new contract proposals.
67. Internal government information was disclosed to non-govemmental individuals in order
to aid companies and individuals in obtaining government contracts.
68. Entities seeking government contracts utilized individuals with government influence to
seek and obtain government contracts.

69. Entities seeking government contracts negotiated with and paid individuals with
government influence to obtain government contracts.
70. On occasion, existing government contracts were cancelled or terminated in order to award
replacement or substitute contracts to vendors endorsed and promoted by individuals with
government influence.
71. Government officials acted based on the political affiliation of proposed contractors.
72. Government officials granted non-governmental individuals access to facilities, offices,
information, and other government operations despite the fact that the individuals were
neither employees nor contractors of the government at the time access was granted. This
practice provided access to non-governmental individuals to obtain internal government
information and documentation. This practice allowed vendors to obtain internal
government department or agency information for the preparation of contract proposals.

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Further, this practice permitted non-governmental individuals to utilize government
property and facilities for their own personal benefit.
73. Government officials allowed and permitted non-governmental individuals to exercise
authority over department or agency officials.

74. Individuals misrepresented that they possessed a title or position within the government
when in fact the individual was neither an employee nor contractor of the government.
75. Government officials utilized non-govemment employees and non-government contractors
to perform services and direct actions to be performed by government officials.
76. Government officials instructed government contractors to hire and pay specific
individuals to perform work at the direction of the government official. Government
officials utilized those specific individuals, paid through government contracts, to perform
services and functions outside the scope of the contracts awarded.
77. Government officials utilized personal email accounts and instructed subordinates to open
and use private email accounts in order to conduct official government business.
78. Government officials and employees utilized electronic messaging applications, including
Telegram, an encrypted messaging application that can be programmed by its users to autodelete messages (self-destmct). This encrypted self-deleting messaging application was
often used to conduct official government business.
79. Government officials forwarded internal department and agency information from their
official government email accounts to their personal email accounts.
80. Government contracts were awarded without complying with applicable government
regulations and competitive proposal processes.

81. Despite express prohibitions on unauthorized subcontracting and the payment of lobbyists,

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government contracts were executed by government officials and contractors who intended
to subcontract the services and pay commissions for the contracts awarded through
influence with government officials.

82. Members of the conspiracy and scheme failed to disclose that portions of the funds
assigned under the contracts would be paid as commissions by the contractors to
individuals with government influence in exchange for obtaining the government contract.
83. By paying unauthorized commissions, the cost of government contracts was unnecessarily
inflated and increased.
84. Electronic communications were transmitted and caused to be transmitted by means of wire
comnumication in interstate commerce, all in furtherance of the conspiracy, scheme to
defraud, and the theft of federal funds.
85. Government officials authorized contract amendments that were utilized to increase the
value of contracts and to provide employment to specific individuals through contractors.
86. Defendants made false representations and took action in violation of federal and Puerto
Rico law in order to solicit, procure, and award government contracts paid with federal
funds.

OVERT ACTS IN FURTHERANCE OF THE CONSPIRACY
87. In furtherance of the conspiracy, and to accomplish its purpose, the co-conspirators (both

indicted and unindicted herein), committed the following overt acts in the District of Puerto
Rico and elsewhere:

88. On or about January 27, 2017, [1] JULIA BEATRICE KELEHER sent an email to [3]

ALBERTO VELAZQUEZ-PINOL, [5] GLENDA E. PONCE-MENDOZA, and
Individual F stating in part, "Alberto, Adjunto las tablas que te mencione... no recopUamos

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datos de forma organizada. Glenda, busca las tablas de [PR DOE Employee] sobre vacante,
etc y dale FW a Alberto." (Alberto, Attached are the charts that I had mentioned to you...

we don t gather data in an organized fashion. Glenda, find the charts from [PR DOE
Employee] about vacancies, etc. and forward to Alberto.)

89. On or about February 1, 2017, [3] ALBERTO VELAZQUEZ-PINOL met Individual B
for dinner at Suchville Plaza located in Guaynabo, Puerto Rico.
90. On or about February 2, 2017, BDO circulated a proposed engagement letter addressed to

Individual B to amend contract 2017-AF0159 to increase the November 2016 contract
value of $199,500.00 by an additional amount of $291,080.00 for a total of $490,580.00.
91. On or about February 5, 2017, BDO sent the engagement letter, which was addressed to

Individual B, via email to [3] ALBERTO VELAZQUEZ-PINOL. BDO stated that the
requested increase was based on $196,080.00 in value being transferred from a contract

involving Parissi and $95,000.00 in additional value being added.
92. On or about February 6, 2017, [3] ALBERTO VELAZQUEZ-PINOL forwarded BDO's
engagement letter to Individual B at XXXX@gmail.com and requested that she verify if it
appeared acceptable so that it could be submitted.

93. On or about February 7, 2017, [3] ALBERTO VELAZQUEZ-PINOL forwarded BDO's
engagement letter to [1] JULIA BEATRICE KELEHER at XXXX@gmail.com. [1]
JULIA BEATRICE KELEHER responded from her personal email account to [3]
ALBERTO VELAZQUEZ-PINOL, discussing language to be utilized in BDO's contract
amendment.

94. On or about February 22, 2017, [1] JULIA BEATRICE KELEHER took a photograph,
using her personal telephone, of a computer screen containing an internal PR DOE

17

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 18 of 44

communication from [1] JULIA BEATRICE KELEHER to Individual B. The
communication to Individual B involved personnel and hours pertaining to BDO. The
photograph was sent via text message (multimedia messaging service or "mms") to [3]

ALBERTO VELAZQUEZ-PINOL's email address.
95. On or about February 24, 2017, BDO sent a Proposal and Engagement Letter for the PR

DOE to [3] ALBERTO VELAZQUEZ-PINOL for the amendment of contract 2017AF0159.
96. Via letter dated March 1, 2017, Parissi requested the early termination of its contract with
the PR DOE (2017-AF0007) set to expire on June 30,2017. Parissi requested a cancellation
date of March 14,2017, and further informed PR DOE that the request was due to Parissi's
merger with BDO. On June 30, 2017, Parissi filed a Certificate of Merger with BDO at the
Puerto Rico Department of State notifying that the merger would become effective for all
purposes at ll:59p.m. on June 30, 2017.

97. In or about March 2017, [3] ALBERTO VELAZQUEZ-PINOL and [4] FERNANDO
SCHERRER-CAILLET agreed that [3] ALBERTO VELAZQUEZ-PINOL would
receive a 10% commission on any contracts he obtained for BDO.

98. On or about March 14, 2017, BDO executed an amendment to contract 2017-AF0159 with
PR DOE to increase the value of the contract by $291,080.00. The amended value of the
contract was $490,580.00.

99. As apart of Contract 2017-AFO 159, [4] FERNANDO SCHERRER-CAILLET certified
that services under the contract did not include lobbying services and that the funds
assigned under the contract would not be used to pay for lobbying services, regardless of
their pmpose.

18

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 19 of 44

100. Contract 2017-AF0159 prohibited BDO from subcontracting other companies to
perform the services to be provided under the contract.

101. On or about April 11,2017, [3] ALBERTO VELAZQUEZ-PINOL submitted invoice
20170411 from Azur to BDO requesting a partial payment corresponding to a 10%
commission for [3] ALBERTO VELAZQUEZ-PINOl/s efforts in securing a $95,000.00
partial increase to contract 2017-AF0159.

102. On or about May 4, 2017, BDO paid [3] ALBERTO VELAZQUEZ-PINOL, via
check number 14979 payable to the order of Azur, a total of $5,226.75 pertaining to
commissions billed in April 2017.
103. On or about April 19, 2017, BDO executed a second amendment to contract 2017-

AF0159 with the PR DOE to increase the value of the contract by an additional
$589,000.00. Pursuant to the second amendment, the contract value was $1,079,580.00.

104. On or about July 10, 2017, BDO executed contract 2018-AF0019 with the PR DOE to
provide consulting services to the PR DOE. The total value of the contract was
$4,770,330.00, and it was set to expire on or about June 30, 2018.

105. As part of Contract 2018-AF0019, [4] FERNANDO SCHERRER-CAILLET
certified that services under the contract did not include lobbying services and that the
funds assigned under the contract would not be used to pay for lobbying services,
regardless of their purpose.

106. Contract 2018-AF0019 prohibited BDO from subcontracting other companies to
perform the services to be provided under the contract.

107. On or about October 19, 2017, BDO paid f3] ALBERTO VELAZQUEZ-PINOL a
total of $47,570.16, via check number 15642 payable to the order ofAzur with memo:

19

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 20 of 44

"PS/Comisiones- BDO-PRED Contract." (PS/Comissions-BDO-PRED Contract). Check

number 15642 was signed by [4] FERNANDO SCHERRER-CAILLET.
108. On or about December 22, 2017, Individual E emailed [6] MAYRA PONCEMENDOZA and Individual F advising them that Individual E's contract with Colon &
Ponce was set to expire at the end of the year. In or about December 2017, [1] JULIA

BEATRICE KELEHER met with Individual H, a partner at BDO, and instructed him to
hire Individual E under BDO. Individual E was then informed by [1] JULIA BEATRICE
KELEHER that her payments as a Special Assistant would now be made through BDO, a
company Individual E was not associated with at the time.

109. On or about December 27, 2017, BDO's internal accountant provided [3]ALBERTO
VELAZQUEZ-PINOL with a summary of the commissions invoiced by [3] ALBERTO

VELAZQUEZ-PINOL through Azur and payments by BDO to [3] ALBERTO
VELAZQUEZ-PINOL through Azur for the months of July 2017 through September
2017. The chart prepared by BDO, and provided via email to [3] ALBERTO
VELAZQUEZ-PINOL, detailed the amounts collected by BDO from PR DOE and the
10% commission payments by BDO to [3] ALBERTO VELAZQUEZ-PINOL. The chart
provided as follows:
PRDE
AZUR
(Hourly

(-1.5%)Gov
Invoices Period

Amount

Net Amount

10% Bonus

88,311,41

8,831.1-4

PAID

220,509.<16

220,509.46

22,050.95

PAID

Oft,923.61

136,923.61

13,692.36

PAID

849.30

55,770.70

55,770.70

5,577.07

PAID

1,320.97

86,744.03

86,744.03

8,67-4,40

PAID

tax

Collected

Ju(-17

69,656.25

1,344.84

88,311.41

Jul-!7

9'?,583.75

1,493.76

98,089.99

Aug-17

223,867.50

3,358.02

Aug.17

[39,008.75

2,085,14

Sep-17

56,620.00

Sep-17

88,065.00

Invoices)

110. On or about January 19, 2018, BDO executed an amendment to contract 2018-AF0019

with the PR DOE to increase the value of the contract by $1,938,000.00, for a total of

20

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 21 of 44

$6,708,330.00.

111. Individual E received the following payments from BDO for her work as a Special

Assistant to [1] JULIA BEATRICE KELEHER:
Check Dated
March 2, 2018
March 13, 2018

Check Number

Check 16170
Check 16229
Check 16359
Check 16523
Check 16675
Check 16782

Amount

$8,335.50
$9,030.30
$8,202.60
$7,728.30
$7,449.30
$5,403.30
$46,149.30

April 10,2018
May 14, 2018
June 15, 2018

July 12,2018
Total

112. On or about July 31, 2018, BDO executed contract 2019-AF0022 with the PR DOE to
provide consulting services to the PR DOE. The total value of the contract was
$6,363,000.00, and it was set to expire on or about June 30, 2019.

113. On or about August 16, 2018, BDO's internal accountant provided [3] ALBERTO
VELAZQUEZ-PINOL a summary of the commissions invoiced through Azur and
payments by BDO to [3] ALBERTO VELAZQUEZ-PINOL through Azur, for the
months of April 2018 through June 2018. The chart prepared by BDO and provided via
email to [3] ALBERTO VELAZQUEZ-PINOL detailed the amounts collected by BDO
from PR DOE and the 10% commission payments by BDO to [3] ALBERTO
VELAZQUEZ-PINOL. The chart provided as follows:
4

PRDE-Federal
Invoices

5

Adj.

Federal

Amount to

Total

State

Amount

Period

Amount

6'

Apr-18

327,678.75

7
8
9
10

May-18

349,148.75

Jun-18

422,987.50

(63,080.00)

AZUR
(Hourly

Total

4%

Commission

Collected

(87,875.00) 239,803.75

(3,597.06)

236,206.69

236,206.69

23,620.67

344.83

(86,877.50) 262,271.25

(3,934.07)

258,337.18

258,337,18

25,833.72

1,033,35

35,768.80

359,907.50

(5,398.61)

354,508,69

354,508.89

35,450.89

1,418.04

43,330.84

Invoices)

Net Amount

10% Bonus

Sales Tax

1.50%

$108,331.78

All in violation of Title 18, United States Code, Section 371,

21

33,567.41

$112,665.05

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 22 of 44

COUNTS THIRTEEN TO EIGHTEEN
18 U.S.C. S 1343

(Wire Fraud)
114. The allegations contained in Count Twelve, paragraphs 54-113 of this Indictment are
re-alleged and incorporated herein by reference.
115. On or about each of the dates set forth below, in the District of Puerto Rico,

[1] JULIA BEATRICE KELEHER,
[3] ALBERTO VELAZQUEZ-PINOL, and
[4] FERNANDO SCHERRER-CAILLET,
defendants in each count as named below, for the purpose of executing the scheme
described in Count Twelve, and attempting to do so, caused to be transmitted by means of
wire communication in interstate commerce the signals and sounds described below for
each count, each transmission constituting a separate count:
Count

Date

From

13.

February

Individual H

5,2017

To

[3] ALBERTO

Description
Email attaching BDO's

VELAZQUEZ-

Engagement Letter and a

PINOL

statement to specify that the
requested increase in amount for

BDO's contract 2017-AF0159
was based on a $196,080 transfer
from Parissi's contract plus a new
14.

February

[3]ALBERTO

6,2017

VELAZQUEZ-

Individual B

PINOL

amount of $95,000
Email forwarding Individual H's
email from February 5, 2017 with
BDO s Engagement Letter for the
amendment of BDO contract

2017-AF0159 and the statement
to specify that the requested
increase in amount for BDO's

contract 2017-AF0159 was based
on a $196,080 transfer from
Parissi's contract plus a new
15.

February

[3]ALBERTO

7,2017

VELAZQUEZ-

PINOL

[1] JULIA

BEATRICE
KELEHER
22

amount of $95,000
Email forwarding his email to
Individual B on February 6, 2017
in which he forwarded Individual

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 23 of 44

H s email from February 5, 2017
with BDO's Engagement Letter
for the amendment of contract

BD02017-AF0159andthe
statement to specify that the
requested increase in amount for

BDO's contract 2017-AF0159
was based on a $196,080 transfer
from Parissi s contract plus a new

amount of $95,000
16.

February

14,2017

[1] JULIA
BEATRICE

[3] ALBERTO

Email agreeing to use general

VELAZQUEZ-

KELEHER,

PINOL

language in BDO contract that
will not limit the various tasks

BDO

[3] ALBERTO

Email attaching BDO's Proposal
and Engagement Letter for the

and list of work to be requested.
17.

February

24,2017

VELAZQUEZ-

PINOL

amendment of contract BDO

2017-AF0159
18.

April 11,

2017

[3]ALBERTO

BDO

Email submitting Azur's invoice

VELAZQUEZ-

20170411 requesting partial

PINOL

payment of 10% commission
related to the $95,000 partial
increase to contract 2017-AF0159

All in violation of Title 18, United States Code, Section 1343.

COUNT NINETEEN
18 US.C. § 371
(Conspiracy to Commit an Offense Against the United States)

Unless otherwise specified, at all times material to this Indictment:
116. The allegations contained in paragraphs 55-56, 58, and 60-62 are re-alleged and
incorporated herein by reference.

117. The Puerto Rico Department of Health (hereinafter "PR DOH") was organized under
Article V, section 6 of the Constitution of the Commonwealth of Puerto Rico.

118. The Medicaid Program ("Medicaid") was a federal health benefit program intended to

23

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 24 of 44

provide benefits to low-income individuals and families. Medicaid was monitored and

funded by the United States Department of Health and Human Services (hereinafter
"HHS") through its agency, the Centers for Medicare and Medicaid Services (hereinafter
"CMS ). In the Commonwealth of Puerto Rico, Medicaid was commonly referred to in
Spanish as " Re forma , "MiSalud", "Plan de Salud del Gobierno " or "Vital".

119. Although Medicaid was federally funded, it was administered by the states and/or
United States territories, including the Commonwealth of Puerto Rico. PR DOH was the
designated single state agency responsible for Medicaid.

120. The Puerto Rico Health Insurance Administration (PRHIA) also known as
^Administracion de Seguros Salud de Puerto Rico" (hereinafter "ASES") was a public
corporation and Puerto Rico government instrumentality, created by Act 72 of 1993,
known as the Puerto Rico Health Insurance Administration Act.

121. PR DOH had a cooperative agreement with ASES, which implemented and
administered the island-wide health insurance system.

122. HHS provided PR DOH more than $1 billion annually to fund and/or reimburse the
costs ofMedicaid. These costs included the reimbursement of any administrative expenses

incurred by the PR DOH, ASES and its authorized contractors for work performed in
furtherance of the successful operation ofMedicaid.

123. [2] ANGELA AVILA-MARRERO was the acting Executive Director ofASES from
in or about January 2017, through in or about February 2017. [2] ANGELA AVILAMARRERO was the Executive Director ofASES from in or about February 2017, through
on or about June 25, 2019.

24

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 25 of 44

THE CONSPIRACY
124. Frominor about January 2017, through in or about June 2019, in the District of Puerto
Rico and within the jurisdiction of this Honorable Court,

[2] ANGELA AVILA-MARRERO,
[3] ALBERTO A. VELAZQUEZ, and
[4] FERNANDO SCHERRER-CAILLET,
the defendants herein, did knowingly and willfully conspire, combine, confederate, and
agree with each other and with other individuals known and unknown to the Grand Jury,
to commit an offense against the United States, to wit: theft and conversion of government

money and property in excess of $1,000.00, in relation to federal funds paid by ASES to
BDO, in violation of Title 18, United States Code, Section 641.

PURPOSE OF THE CONSPIRACY
125. The purpose of the conspiracy and scheme to defraud was for the defendants to utilize

the position of public officials within the government of the Commonwealth of Puerto Rico
to benefit and enrich themselves through fraud and the theft of government funds.

MANNER AND MEANS OF THE CONSPIRACY
As part of the manner and means of the conspiracy:

126. Beginning in or about January 2017, [3] ALBERTO VELAZQUEZ-PINOL attended
meetings and activities conducted by ASES and PR DOH.
127. [2] ANGELA AVILA-MARRERO requested Information from ASES employees
which she then disclosed to [3] ALBERTO VELAZQUEZ-PINOL through the use of
her personal email account.
128. Defendants and other co-conspirators exchanged email communications containing
internal government information regarding government contracts.

25

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 26 of 44

129. Government contract balances were disclosed to non-government employees for use in
the submission of new contract proposals.
130. Internal government information was disclosed to non-governmental individuals in
order to aid companies and individuals in obtaining government contracts.
131. Entities seeking government contracts utilized individuals with government influence
to seek and obtain government contracts.

132. Entities seeking government contracts negotiated with and paid individuals with
government influence to obtain government contracts.
133. On occasion, existing government contracts were cancelled or terminated in order to
award replacement or substitute contracts to vendors endorsed and promoted by individuals
with government influence.
134. Government officials acted based on the political affiliation of proposed contractors.
135. Government officials granted non-governmental individuals access to facilities,
offices, information, and other government operations despite the fact that the individuals
were neither employees nor contractors of the government at the time access was granted.
This practice provided access to non-govemmental individuals to obtain internal
government information and documentation. This practice allowed vendors to obtain
internal government department or agency information for the preparation of contract
proposals. This practice also permitted non-governmental individuals to utilize government
property and facilities for their own personal benefit.
136. Government officials allowed and permitted non-governmental individuals to exercise
authority over department or agency officials.

26

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 27 of 44

137. Individuals misrepresented that they possessed a title or position within the government
when in fact the individual was not an employee or contractor of the government.
138. Government officials utilized non-government employees and non-government
contractors to perform services and direct actions to be performed by government officials.
139. Government officials utilized personal email accounts to conduct official government
business.

140. Government officials and employees utilized electronic messaging applications,

including Telegram, an encrypted messaging application that can be programmed by its
users to auto-delete messages (self-destmct). This encrypted self-deleting messaging
application was often used to conduct official government business.
141. Government officials forwarded internal department and agency information from their
official government email accounts to their personal email accounts.

142. Despite prohibitions on unauthorized subcontracting and the payment of lobbyists,
government contracts were executed by government officials and contractors who intended
to subcontract the services and pay commissions for the contracts awarded through
influence with government officials.

143. Members of the conspiracy and scheme failed to disclose that portions of the funds
assigned under the contracts would be paid as commissions by the contractors to
individuals with government influence in exchange for obtaining the government contract.
144. By paying unauthorized commissions, the cost of government contracts was
unnecessarily inflated and increased.
145. Electronic communications were transmitted and caused to be transmitted by means of
wire communication in interstate commerce, all in furtherance of the conspiracy, scheme

27

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 28 of 44

to defraud, and the theft of federal funds.
146. Defendants made false representations and took action in violation of federal and
Puerto Rico law in order to solicit, procure, and award government contracts paid with
federal funds.

OVERT ACTS IN FURTHERANCE OF THE CONSPIRACY
147. In furtherance of the conspiracy, and to accomplish its purpose, the co-conspirators

(both indicted and unindicted herein), committed the following overt acts in the District of
Puerto Rico and elsewhere:

148. On or about January 15,2017, [2] ANGELA AVILA-MARRERO sent a text message
to Individual I, her Executive Assistant, requesting: "Si puedes forward la tabla con el
detalle de los contratos a mi email personal." ("If you can, forward the chart with the
contract details to my personal email.")

149. On or about January 16, 2017, Individual I and Individual J, an employee at ASES,
forwarded multiple emails pursuant to [2] ANGELA AVILA-MARRERO's requests.
The emails sent to [2] ANGELA AVILA-MARRERO's official email address at
aavila@asespr.org contained charts, contracts, proposals, and contract balances. The

contract balance listed for contract 2017-00039 with Company A was $1.1 million. The
contract balance listed for contract 2017-00033 with Company B was $125,000.00. The
contract balance listed for contract 2017-00040 with Company B was $100,000.00.
150. Uponreceipt of the emails, [2] ANGELA AVILA-MARRERO forwarded the internal
government information to her personal email account at Yahoo.

151. On or about January 16, 2017, [2] ANGELA AVILA-MARRERO forwarded the
internal government information pertaining to the balance of multiple ASES contracts to

28

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 29 of 44

[3] ALBERTO VELAZQUEZ-PINOL from her personal email account.
152. On or about January 16, 2017 and from her personal account, [2] ANGELA AVILA-

MARRERO emailed [3] ALBERTO VELAZQUEZ-PINOL an excel spreadsheet
entitled Contratos Servicios Profesionales y Comprados 2017 LR.xlsx with the message:
"Saludos ! Adjunto lista de contratos. Le voy a enviar copias de lo contratos mas
importantes en con'eos individuales." ("Greetings. Attached is a list of contracts. I am
going to send copies of the most important contract in individual messages.")

153. On or about January 16, 2017 and from her personal account, [2] ANGELA AVILA-

MARRERO emailed [3] ALBERTO VELAZQUEZ-PINOL an electronic .pdf file
containing a copy of contract 2017-00040 between ASES and Company B, and the contract
proposal. Contract 2017-00040 had a total value of $200,000.00, and was set to expire on
June 30, 2017.

154. On or about January 18, 2017, Individual I emailed [3] ALBERTO VELAZQUEZPINOL an electronic .pdf file containing a copy of contract 2017-00039 between ASES
and Company A, the contract proposal, and internal government documentation. Contract

2017-00039 had a total value $2.2 million, and was set to expire on June 30, 2017.
155. On or about January 18, 2017, [3] ALBERTO VELAZQUEZ-PINOL forwarded the
email and .pdf attachment regarding Company A to Individual K, President and owner of

Company C. In the body of the email, [3] ALBERTO VELAZQUEZ-PINOL informed
Individual K that: "Este es el contrato que vamos a reemplazar. Cuando lo revises
hablamos." ("This is the contract that we are going to replace. Let's talk when you review
it."). On or about January 23, 2017, Company C sent an electronic fund transfer in the

amount of $5,000.00 to [3] ALBERTO VELAZQUEZ-PINOL via Azur's bank account.

29

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 30 of 44

156. On or about January 20, 2017, [2] ANGELA AVILA-MARRERO sent letters to
Company B cancelling contract 2017-000033 and contract 2017-000040. The letter
cancelling contract 2017-00040, signed by [2] ANGELA AVILA-MARRERO,
specifically stated, "En virtud de la clausula Cuadragesima Septima del mencionado
contmto de servicios y luego de reallzar un analisis de necesidad, la ASES ha determinado
cancelar el acuerdo, efectivo inmediatamente." ("Pursuant to Clause Forty-Seven of the
aforementioned services contract and upon an analysis of needs, ASES has determined to
cancel the contract, effective immediately.").

157. On or about January 23, 2017, [4] FERNANDO SCHERRER-CAILLET sent the
following "Modelo de Negocios" (business model) to [3] ALBERTO VELAZQUEZPINOL which outlined two options for payment of a commission to [3] ALBERTO
VELAZQUEZ-PINOL.
Modelo de Negocios
J2[i

Billing rate - Gross

.l2[>

Billing rate - BDO

>-'l^

L)S

Excess

30

30

Project hours

10,000

Alberto direct hours
Alberto share of excess

^C<%

BDO share of excess

50%

Ui,000

t'.l'/.

-'%

uf

100%

0

Commission

i'Cr'6

Model 1
Gross revenues

Model 2
1,250,000

1,250,000
Commission
Net revenues

Alberto-direct

118,750
1,131,250

BDO - direct

62,500
950,000

62,500
950/000

Excess

237,500

118,750

Alberto share

118,750

BOO share

118,750

Alberto total revenue

118,750

15%
86%

181,250

BDO total revenue

1,068,750

BDO rate per hour

106.88

181,250 14.50%
1,068,750 85.50%
106.83

30

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 31 of 44

158. On or about January 24, 2017, [4] FERNANDO SCHERRER-CAILLET sent a
proposal on behalf of BDO for advisory services to [3] ALBERTO VELAZQUEZPINOL and [2] ANGELA AVILA-MARRERO, via her personal email account. The
contract amount proposed by BDO was $1,035,000.00 from inception until June 30,2017.

159. On or about January 24, 2017, [3] ALBERTO VELAZQUEZ-PINOL sent a proposal
from Company C for Grant Management Staffing for Accounting Services and Other
Professional Services to [2] ANGELA AVILA-MARRERO^s, personal email account.
The contract amount proposed by Company C was $1,158,000.00.

160. At approximately 12:54 a.m., on or about January.25, 2017, [2] ANGELA AVILAMARRERO sent an email to Board Member A, President of Board of Directors ofASES,
containing an agenda for the ASES Board of Directors meeting to be held on January 25,
2017, along with a draft of the "Informe Del Directora Ejecutivo Interina" {sic) (Acting
Executive Director Report). The Acting Executive Director Report draft contained a
section submitting proposals to award contracts to BDO, Company C, and Individual L, at
the time a student intern at ASES, for the Board of Director's approval. The proposals were

purportedly based on the fiscal situation facing the Puerto Rico health system and the need
to avoid the interruption of services.

161. At approximately 1:05 a.m., on or about January 25, 2017, [2] ANGELA AVILAMARRERO forwarded her 12:54 a.m. email to [3j ALBERTO VELAZQUEZ-PINOL.
162. On or about January 25, 2017, [2] ANGELA AVILA-MARRERO sent a letter to
Company A cancelling contract 2017-000039. The letter signed by [2] ANGELA AVILAMARRERO stated, "En virtud de la clausula Cuadragesima Sexta del mencionado
contrato de servicios y luego de realizar un analisis de necesidad, la ASES ha determinado

31

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 32 of 44

cancelar el acuerdo, efectivo inmediatamente." ("Pursuant to Clause Forty-Six of the
aforementioned services contract and upon an analysis of needs, ASES has determined to
cancel the contract, effective immediately.").

163. On or about January 25, 2017, the ASES Board of Directors held a meeting. [2]
ANGELA AVILA-MARRERO was present at the meeting and discussed the cancellation
of various contracts, including the cancellation of contracts with Company A.

164. On or about January 25, 2017, at the meeting of the ASES Board of Directors, [2]
ANGELA AVILA-MARRERO recommended that some of the cancelled contracts be
substituted and awarded to Company C and BDO, among others. With respect to Company

C, [2] ANGELA AVILA-MARRERO recommended to the Board of Directors that a
financial firm which had "la confianza de esta administracion" (the trust of this

administration) should be contracted. With respect to BDO, [2] ANGELA AVILAMARRERO confirmed to the Board of Directors that BDO had the trust of the
administration.

165. At the January 25, 2017 meeting of the ASES Board of Directors, [2] ANGELA
AVILA-MARRERO stated as follows:
Board Member B: Direc/ora, ^ estos son nuevos, son
proveedores nuevos?
(Director, these are new, new providers?)

[2JANGELA
AVILA-MARRERO: Nuevos.
(New.)
Board Member B: Nuevos.

[2JANGELA

(New.)

AVILA-MARRERO: Totalmente nuevos.

(Totally new.)
Board Member B : Bien,

(Good.)

[2JANGELA

32

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 33 of 44

A VILA-MARRERO: Yque gozan de la confianza de...
(And they have the trust of...}
Board Member B: De su administracion.
(of your administration.)

[2JANGELA
AVILA-MARRERO: ... de nuestra adminislracion.
(of our administration.)

166. On or about January 25, 2017, the ASES Board of Directors discussed the approval of
contracts to BDO and Company C based on the recommendations made by [23 ANGELA
AVILA-MARRERO.
167. In or about February 2017, [2] ANGELA AVILA-MARRERO was appointed
Executive Director ofASES.

168. On or about March 1, 2017, [2] ANGELA AVILA-MARRERO and [3] ALBERTO
VELAZQUEZ-PINOL attended the meeting of the ASES Board of Directors. [3]
ALBERTO VELAZQVEZ-PINOL was identified as the "Asesor Asuntos Federales,
ASES" (ASES Advisor for Federal Affairs) even though he was not an employee or
contractor ofASES at the time. [2] ANGELA AVILA-MARRERO informed the ASES
Board of Directors that the Puerto Rico Oficina de Gerencia y Presupuesto (hereinafter
"OGP" or "Office of Management and Budget" or "0MB") had not yet certified the
contracts for BDO or Company C.

169. On or about March 1,2017, the ASES Board of Directors ratified the award of contracts
to BDO and Company C.
170. On or about March 22, 2017, the "Gobiemo de Puerto Rico Oficina de Secretario de la

Gobernacion" (Government of Puerto Rico Office of Chief of Staff hereinafter "Chief of
Staff) approved a contract between ASES and BDO for a total amount of $828,000.00.
The approval letter was signed by the Chief of Staff and Board Member B, who was also

33

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 34 of 44

an official at OGP. On or about that same date, [2] ANGELA AVILA-MARRERO sent
the approval letter to [3] ALBERTO VELAZQUEZ-PINOL, as well as others, and
requested that certain information be provided to [3] ALBERTO VELAZQUEZ-PINOL
to perform services under the contract. [3] ALBERTO VELAZQUEZ-PINOL forwarded
the approval letter to [4] FERNANDO SCHERRER-CAILLET.
171. On or about March 31,2017, Individual M, an employee of ASES, sent an email to [3]

ALBERTO VELAZQUEZ-PINOL and [2] ANGELA AVILA-MARRERO containing
a proposed draft letter to be sent to the Associate Regional Administrator for HHS,

Medicaid Division. The proposed draft .letter informed CMS that ASES had cancelled the
contract with Company B and was seeking permission to replace Company B with BDO.

172. On or about March 31, 2017, [3] ALBERTO VELAZQUEZ-PINOL responded via
email to Individual M and [2] ANGELA AVILA-MARRERO that he had suggestions to
edit the proposed letter to the Associate Regional Administrator for HHS, as detailed below
in redacted format:
Ao"i;ji AVP <^^^——®girail.com>^F
'.iil'n'f; Re: Bosquejo M. ^^^^B" BDO-^^^B
<^^^B@ iT.ospi.org> f{
)<isespr.org> ^.Angela Avila <aavila@osespr.org> i^

AUn no. Tengo par de sngerencias para editar e) doc. Estoy a punto de despegar. Te comento luego.
Saludos. Not yet) have 3 COUPIe of suggestions to edit tlie doc. I'm about to take off, I'll tell you later.

j Greetings,
On Mar 31, 2017, at 12:59 PMj

HotaAlberto,
Este es el bosquejo. dYa hablaste con Michael?
Saludos,

1 attachment: BosquejoM,^^^B re BDO-^Bdac '':.; i(i!
Hello Alberto,

This is the draft. Did you talk to Michael?
Greetings,

34

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 35 of 44

173. On or about April 5,2017J2] ANGELA AVILA-MARRERO emailed a revised letter
to the Associate Regional Administrator for HHS, [3] ALBERTO VELAZQUEZPINOL and Individual M, requesting permission to contract with BDO.
174. The April 5, 2017 letter to the Associate Regional Administrator for HHS represented
that the contract with Company B was terminated due to a potential conflict of interest.

175. The April 5, 2017 letter to the Associate Regional Administrator for HHS did not
disclose that [3] ALBERTO VELAZQUEZ-PINOL had an interest in BDO's operations

or [3] ALBERTO VELAZQUEZ-PINOL's role in drafting the April 5, 2017 letter
requesting authorization to contract with BDO to perform the services previously
performed by Company B.

176. On or about April 3, 2017, BDO executed contract 2017-000080 with ASES with a
total value of $828,000.00, and an expiration of June 30, 2017.
177. In response to the April 5, 2017 letter, on or about June 8,2017, the Associate Regional
Administrator for HHS approved ASES' request to contract with BDO.
178. On or about June 19, 2017, BDO executed contract 2017-000085 with ASES for a total
amount of $125,000.00, and set to expire on November 30, 2018.

179. On or about July 10, 2017, BDO executed contract 2018-000033 with ASES for atotal
amount of $1,375,000.00 and set to expire on June 30, 2018.

180. BDO made payments to [3] ALBERTO VELAZQUEZ-PINOL, via Azur, including
those identified below on or about the dates listed therein, based on contracts awarded by

ASES to BDO. These payments were in addition to payments made to [3] ALBERTO
VELAZQUEZ-PINOL by BDO in relation to other contracts with PR DOE.

35

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 36 of 44

Check
From

To

BDO
BDO
BDO
BDO
BDO
BDO
BDO
BDO
BDO
BDO
BDO
BDO

AZUR
AZUR
AZUR
AZUR
AZUR
AZUR
AZUR
AZUR
AZUR
AZUR
AZUR
AZUR

Number

14743
14956
15010
15174
15309
15461
15438
15549
15639
15701
15754
15814

Check
Date

3/6/2017
4/28/2017
5/15/2017
6/15/2017
7/14/2017
8/15/2017
8/15/2017
9/13/2017
10/19/2017
11/13/2017
11/27/2017
12/12/2017

Amount
$8,781.50
$7,120.50
$8,105.25
$12,309.37
$5,302.50
$19,619.25
$2,646.45
$28,254.75
$6,741.75
$55,449.00
$12,495.92
$27,118.50

Memo
PS March 15-31, 2017

PS April-2017
PS May 2017
PS June 2017
PS/July 2017
PS/ Comisiones

PS/August 2017
PS/September 2017
PS/October 2017
PS/Novembei-2017
PS/Comisiones - BDO -

BDO
BDO
BDO
BDO
BDO
BDO
BDO
BDO
BDO
BDO
BDO
BDO
BDO
BDO
BDO
BDO
BDO
BDO

AZUR
AZUR
AZUR
AZUR
AZUR
AZUR
AZUR
AZUR
AZUR
AZUR
AZUR
AZUR
AZUR
AZUR
AZUR
AZUR
AZUR
AZUR

15874
15954
16070
16120
16097
16214
16262
16263
16339
16345
16499
16508
16539
16617
16757
16823
16898
16963

12/20/2017
1/10/2018
2/5/2018
2/13/2018
2/13/2018
3/13/2018
3/14/2018
3/14/2018
4/9/2018
4/10/2018
5/8/2018
5/14/2018
5/15/2018
6/13/2018
7/12/2018
7/18/2018
8/14/2018
8/20/2018

$14,393.99
$15,486.00
$10,566.25
$31,909.40
$22,770.75
$19,278.75
$5,641.90
$34,264.83
$29,249.92

ASES Contract (Sept)

$13,095.00

PS/March2018

$63,049.54
$15,714.00
$5,264.32

PS/April2018

$20,661.00
$18,042.00
$20,488.82
$7,056.75
$82,358.12

PS/December2017

PS/January2018

PS/February2018

PS/May2018
PS/June2018

PS/july2018
PS/Comisiones -BDO
ASES" Contract

BDO
BDO

AZUR
AZUR

16969
17049

8/22/2018
9/12/2018

$2,092.09
$17,751.00

February 201

PS/August2018
PS/Comisiones -BDO -

BDO
BDO

AZUR
AZUR

ASES - Contract June

17105
17173

9/14/2018
10/11/2018

$9,761.66
$16,950.75

2018
PS/September2018
PS/Comisiones -BDO -

BDO

AZUR

17250

10/24/2018

36

ASES - Contract July
$6,922.08

2018

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 37 of 44

PS/Comisiones -BDO ASES - Contract July

BDO
BDO

AZUR
AZUR

17283
17323

10/31/2018
11/14/2018
TOTAL

$6,922.08
$26,990.25

2018
PS/October2018

$710,625.99

All in violation of Title 18, United States Code, Section 371.

COUNTS TWENTY TO TWENTY-FIVE
18 U.S.C. S 1343
(Wire Fraud)
181. The allegations contained in Count Nineteen, paragraphs 116-180 of this Indictment
are re-alleged and incorporated herein by reference.
182. On or about each of the dates set forth below, in the District of Puerto Rico,

[2] ANGELA AVILA-MARRERO,
[3] ALBERTO VELAZQUEZ-PINOL, and
[4] FERNANDO SCHERRER-CAILLET,
defendants in each count when named below, for the purpose of executing the scheme
described in Count Nineteen, and attempting to do so, caused to be transmitted by means
of wire communication in interstate commerce the signals and sounds described below for
each count, each transmission constituting a separate count:

Count

Date

20.

January

[2] ANGELA

16,2017

AVILA-

21.

From

MARRERO

January

[2] ANGELA

16,2017

AVILA-

MARRERO

To

Description

[3]ALBERTO

Email forwarding internal

VELAZQUEZ-

government information

PINOL

pertaining to the balance of
multiple ASES contracts

[3]ALBERTO

Email forwarding an excel

VELAZQUEZ-

PINOL

spreadsheet containing a list of

contracts and advising [3]
Alberto Velazquez- Pinol that
she would be sending copies of

37

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 38 of 44

the most important contracts in

individual messages
22.

January

16,2017

23.

January

23,2017

[2] ANGELA
AVILA-

MARRERO

[3]ALBERTO

Email forwarding an electronic

VELAZQUEZ-

•pdf file containing a copy of

[3]ALBERTO

contract 2017-000040 between
ASES and Company B
Email with the business model
outlining two options for
payment of a commission for [3]

PINOL

[4] FERNANDO
SCHERRER-

CAILLET

VELAZQUEZ-

PINOL

Alberto Velazquez-Pmol
24.

January

24,2017

[4] FERNANDO
SCHERRER-

[3] ALBERTO

Email containing a proposal

VELAZQUEZ-

from BDO for advisory services

PINOL
and [2]
ANGELA

CAILLET

for the amount of $1,035,000.00

AVILA-

MARMRO
25.

March

31,2017

[3] ALBERTO

Individual M and

Email from Alberto Velazquez-

[2] ANGELA

Pifiol responding to Individual M

PINOL

AVILA-

and Angle Avila-Marrero that he

MARRERO

had suggestions to edit the

VELAZQUEZ-

proposed letter to the Associate
Regional Administrator for HHS

All in violation of Title 18, United States Code, Section 1343.

COUNT TWENTY-SIX
18 U.S.C. S 1956^)
(Conspiracy to Launder Monetary Instruments)
183. The allegations contained in paragraphs 1^2, 7-11, and 54-182 of this Indictment are
re-alleged and incorporated herein by reference.

184. From in or about January 2017 through in or about May 2019, in the District of Puerto
Rico and within the jurisdiction of this Honorable Court,

[3] ALBERTO VELAZQUEZ-PINOL and
[4] FERNANDO SCHERRER-CAILLET,

38

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 39 of 44

the defendants herein, did knowingly combine, conspire, and agree with each other and
with other persons hiown and unknown to the Grand Jury to commit offenses against the

United States in violation of 18 U.S.C. §§ 1956 and 1957, to wit: to knowingly conduct
and attempt to conduct financial transactions affecting interstate commerce and foreign
commerce, which transactions involved the proceeds of specified unlawful activity, that is,
proceeds from the conduct identified in Counts 12-26 above, knowing that the transactions
were designed in whole or in part to conceal and disguise the nature, location, source,
ownership, and control of the proceeds of specified unlawful activity, and that while
conducting and attempting to conduct such financial transactions, knew that the property
involved in the financial transactions represented the proceeds of some form of unlawful

activity, in violation of 18 U.S.C. § 1956(a)(l)(B)(i);

MANNER AND MEANS OF THE CONSPIRACY
185. The manner and means used to accomplish the objectives of the conspiracy included,
among others, the use of company and business bank accounts to receive and make
monetary transactions.

186. The manner and means used to accomplish the objectives of the conspiracy included,
among others, the use of financial institutions to make monetary transactions designed in
whole or in part to conceal and disguise the nature, location, source, ownership, and control
of the proceeds of specified unlawful activity.

All in violation of 18 U.S.C. § 1956(h).

39

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 40 of 44

COUNTS TWENTY-SEVEN TO THIRTY-TWO
18 U.S.C. § 1957
(Engagingjn Monetary Transactions in Property

Derived from Specified Unlawful Activity)
1. The allegations contained in paragraphs 1-2, 7-11, and 54-182 of this Indictment are realleged and incorporated herein by reference.

2. On or about the dates set forth below, in the District of Puerto Rico and within the
jurisdiction of this Honorable Court,

[3] ALBERTO VELAZQUEZ-PINOL
the defendant herein, did knowingly engage and attempt to engage in the following
monetary transactions by, through or to a financial institution, affecting interstate or foreign
commerce, in criminally derived property of a value greater than $10,000, that is the,
deposit, withdrawal, and transfer ofU.S. currency, funds, and monetary instruments, such
property having been derived from a specified unlawful activity, that is, conspiracy and

theft of government funds In violation of 18 U.S.C. §§ 371 and 641 and wire fraud in
violation of 18 U.S.C. § 1343.

Count

Check

Date

To

From

No./

Amount

Descrip
tion
27.

28.

29.

30.

103
Ill
1012
1007

Name
2-2-2018

3-15-2018

LLC

xxxxx
1893

Azur,

xxxxx

7-20-2018

Name

Acct

(USD)

xxxxx
6508

$13,950.00

VELAZQUEZ-

1893

xxxxx
6508

$13,950.00

VELAZQUEZ-

LLC

xxxxx
1893

xxxxx
6508

$13,950.00

VELAZQUEZ-

Azur,

xxxxx

xxxxx

$13,950.00

Azur,

LLC
7-5-2018

Acct

Azur,

LLC

1893

40

[3]ALBERTO
PINOL
[3]ALBERTO

PINOL
[3]ALBERTO
PINOL
[3]ALBERTO

VELAZQUEZ-

PINOL

6508

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 41 of 44

31.

Withdra

8-13-2018

32.

1025

Azur,

LLC

wal
8-31-2018

Azur,

LLC

xxxxx
1893
xxxxx
1893

All in violation of 18 U.S.C. §§ 1957.

41

Purchase of Official

n/a

$170,631.30

xxxxx
6508

$23,250.00

Check

[3] ALBERTO
VELAZQUEZ-

PINOL

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 42 of 44

FORFEITURE ALLEGATIONS
The allegations contained in Counts 1-25 of this Indictment are hereby re-alleged and
incorporated by reference for the purpose of alleging forfeitures pursuant to Title 18, United States

Code, Section 981(a)(l)(C) and Title 28, UniMStates^ode, Section 2461(c).
Upon conviction of an offense in violation of Title 18, United States Code, Sections 371,
1343, or 1349 set forth in Counts 1-25 of this Indictment, the defendants,

[1] JULIA BEATRICE KELEHER,
[2] ANGELA AVILA-MARRERO,
[3] ALBERTO VELAZQUEZ-PINOL,
[4] FERNANDO SCHERRER-CAILLET,
[5] GLENDA E. PONCE-MENDOZA, and
[6] MAYRA PONCE-MENDOZA,
shall forfeit to the United States of America, pursuant to Title 18, United States Code, Section
981(a)(l)(C) and Title 28, United States Code, Section 2461(c), any property, real or personal,
which constitutes or is derived from proceeds traceable to the offenses, including, but not limited
to:

a: HORIZONTAL PROPERTY: Apartment number 2-B in the
regime of Horizontal Property known as Las Olas Condominium,
located at 1505 Ashford Avenue in Condado, Santm'ce, Puerto Rico.

This apartment is in the central area of the second floor of the
building and has a superficial area of approximately 808 square feet,
equivalent to 75.06 square meters. Bounding by the NORTH, with
party wall that separates it from apartment 2-A from the same floor;

by the SOUTH, with party wall that separates it from apartment 2C from the same floor, by the EAST, with patio area in which the
building enclave bounding with land property of the Electric Power
Authority; and by the WEST, with common corridor that connects
all apartments with elevators, stairs and other common facilities in
the same floor.

42

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 43 of 44

If any of the property described above, as a result of any act or omission of the

defendants (a) cannot be located upon the exercise of due diligence; (b) has been transferred or
sold to, or deposited with, a third party; (c) has been placed beyond the jurisdiction of the court;
(d) has been substantially diminished in value; or (e) has been commingled with other property
which cannot be divided without difficulty, the United States of America shall be entitled to
forfeiture of substitute property pursuant to Title 21, United States Code, Section 853(p), as
incorporated by Title 28, United States Code, Section 2461(c).
All pursuant to 18 U.S.C. § 981(a)(l)(C) and 28 U.S.C. § 2461(c).

MONEY LAUNDEmNG FORFEITURE ALLEGATIONS
The allegations contained in Counts 26-32 of this Indictment are hereby realleged and
incorporated by reference for the purpose of alleging forfeitures pursuant to Title 18, United States
Code, Sections 982(a)(l).
Pursuant to Title 18, United States Code, Section 982(a)(l), upon conviction of an offense
in violation of Title 18, United States Code, Section 1956 or 1957, the defendants,

[3] ALBERTO VELAZQUEZ-PINOL, and
[4] FERNANDO SCHERRER-CAILLET,
shall forfeit to the United States of America any property, real or personal, involved in such
offense, and any property traceable to such property. The property to be forfeited includes, but is

not limited to, the following:
a: HORIZONTAL PROPERTY: Apartment number 2-B in the
regime of Horizontal Property known as Las Olas Condominium,
located at 1505 Ashford Avenue in Condado, Santurce, Puerto Rico.
This apartment is in the central area of the second floor of the

building and has a superficial area of approximately 808 square feet,
equivalent to 75.06 square meters. Bounding by the NORTH, with
party wall that separates it from apartment 2-A from the same floor;

by the SOUTH, with party wall that separates it from apartment 2"

43

 Case 3:19-cr-00431-PAD Document 3 Filed 07/09/19 Page 44 of 44

C from the same floor, by the EAST, with patio area in which the
building enclave bounding with land property of the Electric Power
Authority; and by the WEST, with common corridor that connects
all apartments with elevators, stairs and other common facilities in
the same floor.
If any of the property described above, as a result of any act or omission of the defendants

(a) cannot be located upon the exercise of due diligence; (b) has been transferred or sold to, or
deposited with, a third party; (c) has been placed beyond the jurisdiction of the court; (d) has been
substantially diminished in value; or (e) has been commingled with other property which cannot
be divided without difficulty, the United States of America shall be entitled to forfeiture of
substitute property pursuant to Title 21, United States Code, Section 853(p), as incorporated by
Title 18, Umted_States_Code, Section 982(b)(l) and Title 28, United States Code, Section 2461(c).

TRUE BILL

FOREPEK^ON
Date: 0-7 (^ I / 7
ROSA EMILIA RODRtGUEZ-VELEZ
United States Attorney

(? '-Tjiriofhy R. Henwood

First Assistant United States Attorney

Marie Christine Amy
Assistant United States Attorney

States Attorney

al Division

44