Un Gran Jurado Federal Acusa A Varios Exfuncionarios

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 S ^0
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V. CRIMINAL NO. 19-^, r'tf>/)C^
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[1] JULIA BEATRICE KELEHER, CRIMINAL VIOLATIONS:

Counts: 1-3, 10,12, 15-16,
[2] ANGELA AVILA-MARRERO, 18U.S.C.§ 1349
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
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
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
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. PONCE-
MENDOZA 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
[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
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 PONCE-
MENDOZA 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
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 PONCE-
MENDOZA forwarded the amended RFP to her sister, [5] GLENDA E.PONCE-
MENDOZA, 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. PONCE-
MENDOZA 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
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 &

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]
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.
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 Amount

Check 1281 January 13,2018 $1,593.00
Check 1284 April 13, 2018 $6,472.80
Check 1285 April 13, 2018 $7,551.60
Total $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,

[5] GLENDA E. PONCE-MENDOZA, and
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:
10
Count Date From To Description

2. August [1] JULIA Individual G and Email forwarding the revised
24,2017 BEATRICE Individual F Colon & Ponce proposal to
KELEHER amend the existing contract with
an annotation that it "should be
ok to go"
3. August [6] MAYRA [1] JULIA Email submitting a revised
22,2017 PONCE- BEATRICE Colon & Ponce proposal to
MENDOZA KELEHER amend the existing contract
4. August 8, [6] MAYRA [5] GLENDA E. Submitting a draft proposal with

2017 PONCE- PONCE- amendments to the Colon &
MENDOZA MENDOZA and Ponce existing contract
Individual A
5. July 11, [6] MAYRA [5] GLENDA E. Email containing proposed
2017 PONCE- PONCE- amendments to the Colon &
MENDOZA MENDOZA Pence contract to be discussed
with [1] Julia Beatrice
KELEHER, including an
increase of $54,800
6. May 24, [6] MAYRA [5] GLENDA E. Email forwarding an email with
2017 PONCE- PONCE- the submission of the updated
MENDOZA MENDOZA Colon & Ponce proposal to PR
DOE
7. May 24, Individual A [5] GLENDA E. Email instructing Glenda E.
2017 PONCE- PONCE-MENDOZA on how to
MENDOZA amend the Colon & Ponce
proposal to the PR DOE
8. May 24, [5] GLENDA Individual A Email forwarding the email from
2017 E. PONCE- Mayra PONCE-MENDOZA in
MENDOZA 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, [6] MAYRA [5] GLENDA E. Email forwarding an email from
2017 PONCE- PONCE- the PR DOE from May 23,2017
MENDOZA MENDOZA requesting Colon & Ponce to
update the billing rate section in
the proposal for services already
submitted to the PR DOE
10. April 11, [5] GLENDA [1] JULIA Email forwarding a Colon &
2017 E. PONCE- BEATRICE Ponce proposal for services for
MENDOZA KELEHER, the PR DOE
11
11. March 29, [6] MAYRA [5] GLENDA E. Email forwarding a Colon &
2017 PONCE- PONCE- Pence presentation for services
MENDOZA MENDOZA to PR DOE
COUNT TWELVE
18 U.S.C. § 371
(Conspiracy to Commit an Offense Against the United States)
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"),
12
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, sub-
treasurer, 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

[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.
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.
14
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 auto-
delete 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,
15
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.
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
16
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 [email protected] 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 [email protected]. [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
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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 2017-
AF0159.
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
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
"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 PONCE-
MENDOZA 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
(-1.5%)Gov (Hourly
Invoices Period Amount tax Collected Invoices) Net Amount 10% Bonus
Ju(-17 69,656.25 1,344.84 88,311.41 88,311,41 8,831.1-4 PAID
Jul-!7 9'?,583.75 1,493.76 98,089.99
Aug-17 223,867.50 3,358.02 220,509.<16 220,509.46 22,050.95 PAID
Aug.17 [39,008.75 2,085,14 Oft,923.61 136,923.61 13,692.36 PAID
Sep-17 56,620.00 849.30 55,770.70 55,770.70 5,577.07 PAID
Sep-17 88,065.00 1,320.97 86,744.03 86,744.03 8,67-4,40 PAID
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
$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 Number Check Dated Amount

Check 16170 March 2, 2018 $8,335.50
Check 16229 March 13, 2018 $9,030.30
Check 16359 April 10,2018 $8,202.60
Check 16523 May 14, 2018 $7,728.30
Check 16675 June 15, 2018 $7,449.30
Check 16782 July 12,2018 $5,403.30
Total $46,149.30
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
Adj. Federal AZUR
Invoices Amount to Total (Hourly Sales Tax Total
5 Period Amount State Amount 1.50% Collected Invoices) Net Amount 10% Bonus 4% Commission
6' Apr-18 327,678.75 (87,875.00) 239,803.75 (3,597.06) 236,206.69 236,206.69 23,620.67 344.83 33,567.41
7 May-18 349,148.75 (86,877.50) 262,271.25 (3,934.07) 258,337.18 258,337,18 25,833.72 1,033,35 35,768.80
8 Jun-18 422,987.50 (63,080.00) 359,907.50 (5,398.61) 354,508,69 354,508.89 35,450.89 1,418.04 43,330.84
9 $108,331.78 $112,665.05
10
All in violation of Title 18, United States Code, Section 371,
21
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.

[3] ALBERTO VELAZQUEZ-PINOL, and
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:

13. February Individual H [3] ALBERTO Email attaching BDO's
5,2017 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
amount of $95,000
14. February [3]ALBERTO Individual B Email forwarding Individual H's
6,2017 VELAZQUEZ- email from February 5, 2017 with
PINOL 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
amount of $95,000
15. February [3]ALBERTO [1] JULIA Email forwarding his email to
7,2017 VELAZQUEZ- BEATRICE Individual B on February 6, 2017
PINOL KELEHER in which he forwarded Individual
22
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 [1] JULIA [3] ALBERTO Email agreeing to use general
14,2017 BEATRICE VELAZQUEZ- language in BDO contract that
KELEHER, PINOL will not limit the various tasks
and list of work to be requested.
17. February BDO [3] ALBERTO Email attaching BDO's Proposal
24,2017 VELAZQUEZ- and Engagement Letter for the
PINOL amendment of contract BDO
2017-AF0159
18. April 11, [3]ALBERTO BDO Email submitting Azur's invoice
2017 VELAZQUEZ- 20170411 requesting partial
PINOL payment of 10% commission
related to the $95,000 partial
increase to contract 2017-AF0159
COUNT NINETEEN
18 US.C. § 371
(Conspiracy to Commit an Offense Against the United States)
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
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
Âdministracion 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 AVILA-
MARRERO was the Executive Director ofASES from in or about February 2017, through
on or about June 25, 2019.
24
THE CONSPIRACY
124. Frominor about January 2017, through in or about June 2019, in the District of Puerto
[2] ANGELA AVILA-MARRERO,

[3] ALBERTO A. VELAZQUEZ, and
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.
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.
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
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
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
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.
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
[email protected] 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
[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 VELAZQUEZ-
PINOL 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
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 VELAZQUEZ-
PINOL which outlined two options for payment of a commission to [3] ALBERTO
VELAZQUEZ-PINOL.
Modelo de Negocios
Billing rate - Gross J2[i .l2[>
Billing rate - BDO >-'l^ L)S
Excess 30 30
Project hours 10,000 Ui,000
Alberto direct hours t'.l'/.
-'%
Alberto share of excess ^C<% uf
BDO share of excess 50% 100%

Commission 0 i'Cr'6
Model 1 Model 2
Gross revenues 1,250,000 1,250,000
Commission 118,750
Net revenues 1,131,250
Alberto-direct 62,500 62,500

BDO - direct 950,000 950/000
Excess 237,500 118,750
Alberto share 118,750

BOO share 118,750 118,750
Alberto total revenue 181,250 15% 181,250 14.50%

BDO total revenue 1,068,750 86% 1,068,750 85.50%
BDO rate per hour 106.88 106.83
30
158. On or about January 24, 2017, [4] FERNANDO SCHERRER-CAILLET sent a
proposal on behalf of BDO for advisory services to [3] ALBERTO VELAZQUEZ-
PINOL 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 AVILA-
MARRERO 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 AVILA-
MARRERO 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 AVILA-
MARRERO 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
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 AVILA-
MARRERO 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.
(New.)
[2JANGELA
AVILA-MARRERO: Totalmente nuevos.
(Totally new.)
Board Member B : Bien,
(Good.)
[2JANGELA
32
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
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 <[email protected]> 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
173. On or about April 5,2017J2] ANGELA AVILA-MARRERO emailed a revised letter
to the Associate Regional Administrator for HHS, [3] ALBERTO VELAZQUEZ-
PINOL 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
Check Check
From To Number Date Amount Memo
BDO AZUR 14743 3/6/2017 $8,781.50
BDO AZUR 14956 4/28/2017 $7,120.50 PS March 15-31, 2017
BDO AZUR 15010 5/15/2017 $8,105.25 PS April-2017
BDO AZUR 15174 6/15/2017 $12,309.37 PS May 2017
BDO AZUR 15309 7/14/2017 $5,302.50 PS June 2017
BDO AZUR 15461 8/15/2017 $19,619.25 PS/July 2017
BDO AZUR 15438 8/15/2017 $2,646.45 PS/ Comisiones
BDO AZUR 15549 9/13/2017 $28,254.75 PS/August 2017
BDO AZUR 15639 10/19/2017 $6,741.75 PS/September 2017
BDO AZUR 15701 11/13/2017 $55,449.00 PS/October 2017
BDO AZUR 15754 11/27/2017 $12,495.92
BDO AZUR 15814 12/12/2017 $27,118.50 PS/Novembei-2017
PS/Comisiones - BDO -
BDO AZUR 15874 12/20/2017 $14,393.99 ASES Contract (Sept)
BDO AZUR 15954 1/10/2018 $15,486.00 PS/December2017
BDO AZUR 16070 2/5/2018 $10,566.25
BDO AZUR 16120 2/13/2018 $31,909.40
BDO AZUR 16097 2/13/2018 $22,770.75 PS/January2018
BDO AZUR 16214 3/13/2018 $19,278.75 PS/February2018
BDO AZUR 16262 3/14/2018 $5,641.90
BDO AZUR 16263 3/14/2018 $34,264.83
BDO AZUR 16339 4/9/2018 $29,249.92
BDO AZUR 16345 4/10/2018 $13,095.00 PS/March2018
BDO AZUR 16499 5/8/2018 $63,049.54
BDO AZUR 16508 5/14/2018 $15,714.00 PS/April2018
BDO AZUR 16539 5/15/2018 $5,264.32
BDO AZUR 16617 6/13/2018 $20,661.00 PS/May2018
BDO AZUR 16757 7/12/2018 $18,042.00 PS/June2018
BDO AZUR 16823 7/18/2018 $20,488.82
BDO AZUR 16898 8/14/2018 $7,056.75 PS/july2018
BDO AZUR 16963 8/20/2018 $82,358.12
PS/Comisiones -BDO
ASES" Contract
BDO AZUR 16969 8/22/2018 $2,092.09 February 201
BDO AZUR 17049 9/12/2018 $17,751.00 PS/August2018
PS/Comisiones -BDO -
ASES - Contract June
BDO AZUR 17105 9/14/2018 $9,761.66 2018
BDO AZUR 17173 10/11/2018 $16,950.75 PS/September2018
ASES - Contract July
BDO AZUR 17250 10/24/2018 $6,922.08 2018
36
ASES - Contract July
BDO AZUR 17283 10/31/2018 $6,922.08 2018
BDO AZUR 17323 11/14/2018 $26,990.25 PS/October2018
TOTAL $710,625.99
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.

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:

20. January [2] ANGELA [3]ALBERTO Email forwarding internal
16,2017 AVILA- VELAZQUEZ- government information
MARRERO PINOL pertaining to the balance of
multiple ASES contracts
21. January [2] ANGELA [3]ALBERTO Email forwarding an excel
16,2017 AVILA- VELAZQUEZ- spreadsheet containing a list of
MARRERO PINOL contracts and advising [3]
Alberto Velazquez- Pinol that
she would be sending copies of
37
the most important contracts in

individual messages
22. January [2] ANGELA [3]ALBERTO Email forwarding an electronic
16,2017 AVILA- VELAZQUEZ- •pdf file containing a copy of
MARRERO PINOL contract 2017-000040 between
ASES and Company B
23. January [4] FERNANDO [3]ALBERTO Email with the business model
23,2017 SCHERRER- VELAZQUEZ- outlining two options for
CAILLET PINOL payment of a commission for [3]
Alberto Velazquez-Pmol
24. January [4] FERNANDO [3] ALBERTO Email containing a proposal
24,2017 SCHERRER- VELAZQUEZ- from BDO for advisory services
CAILLET PINOL for the amount of $1,035,000.00
and [2]
ANGELA
AVILA-
MARMRO
25. March [3] ALBERTO Individual M and Email from Alberto Velazquez-
31,2017 VELAZQUEZ- [2] ANGELA Pifiol responding to Individual M
PINOL AVILA- and Angle Avila-Marrero that he
MARRERO had suggestions to edit the
proposed letter to the Associate
Regional Administrator for HHS
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
[3] ALBERTO VELAZQUEZ-PINOL and

38
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);
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
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 re-
alleged 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 From To

No./ Amount
Descrip Name Acct Name Acct (USD)
tion
27. 103 2-2-2018 Azur, xxxxx [3]ALBERTO xxxxx $13,950.00
LLC 1893 VELAZQUEZ- 6508
PINOL
28. Ill 3-15-2018 Azur, xxxxx [3]ALBERTO xxxxx $13,950.00
PINOL
PINOL
PINOL
40
31. Withdra 8-13-2018 Azur, xxxxx Purchase of Official n/a $170,631.30

wal LLC 1893 Check
32. 1025 8-31-2018 Azur, xxxxx [3] ALBERTO xxxxx $23,250.00
PINOL
All in violation of 18 U.S.C. §§ 1957.
41
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, UniMStatesôde, 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,

[3] ALBERTO VELAZQUEZ-PINOL,
[5] GLENDA E. PONCE-MENDOZA, and
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 2-
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.
42
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,

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
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
FOREPEKÔN
Date: 0-7 (^ I / 7
ROSA EMILIA RODRtGUEZ-VELEZ

United States Attorney
(? '-Tjiriofhy R. Henwood
First Assistant United States Attorney
Marie Christine Amy

States Attorney Assistant United States Attorney
al Division
44

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

IN THE UNITED STATES DISTRICT COURT

UNITED STATES OF AMERICA, INDICTMENT -Z.:^'.u> ^.0

[1] JULIA BEATRICE KELEHER, CRIMINAL VIOLATIONS:

THE GRAND JURY CHARGES:

Unless otherwise specified, at all times material to this Indictment:

and some post-secondary education throughout Puerto Rico.

public and private schools.

January 25, 2018.

from April 21, 2015, until at least in or about 2017.

authorized to execute all legal and administrative documents to "renounce" authorization

to do business in Puerto Rico.

overseen by the "Secretaria AuxiUar" (Director).

requests for proposals under the PR DOE regulations.

10. In or about January 2017, [5] GLENDA E. PONCE-MENDOZA began working in PR

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

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.

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

Rico and within the jurisdiction of this Honorable Court,

[1] JULIA BEATRICE KELEHER,

[6] MAYRA PONCE-MENDOZA,

causing to be transmitted by means of wire communications in interstate or foreign

PURPOSE OF THE CONSPIRACY

PONCE-MENDOZA, and [6] MAYRA PONCE-MENDOZA.

OVERT ACTS IN FURTHERANCE OF THE CONSPIRACY

Rico and elsewhere:

Assistant to the Secretary of PR DOE, [5] GLENDA E. PONCE-MENDOZA assisted

BEATRICE KELEHER instructed PR DOE employees to award a contract to Colon &

GLENDA E. PONCE-MENDOZA asked Individual C about the status of the process,

Ponce, timely submitted proposals.

with specific reference to the Colon & Ponce contract.

May 24, 2017 at 4:30 p.m.

MENDOZA, who was acting as a Special Assistant to [1] JULIA BEATRICE

2017, [5] GLENDA E. PONCE-MENDOZA fox-warded the amended RFP to Individual

A, an official ofKeleher & Associates.

Ponce proposal without disclosing [5] GLENDA E. PONCE-MENDOZA's identity.

MENDOZA emailed [5] GLENDA E. PONCE-MENDOZA on May 24, 2017,

confirming the submission to PR DOE.

& Ponce was recommended for the contract.

pressmed to do so by £1] JULIA BEATRICE KELEHER.

KELEHER forwarding the resume of Individual E, his former 2016 gubernatorial

KELEHER, copying Individual E, so that [1] JULIA BEATRICE KELEHER could

recommended that the meeting be held outside of the PR DOE.

GLENDA E. PONCE-MENDOZA containing proposed amendments to the Colon &

JULIA BEATRICE KELEHER. The proposed amendment included an increase of

$54,800.00, for a total amended contract value of $98,350.00.

resume to Individual F, who acted as one of her Special Assistants.

appointment of Individual E as a government employee would not be feasible.

company Individual E was not familiar with.

GLENDA E. PONCE-MENDOZA and Individual A. The proposal contained various

options, including a proposed increase in the value of the contract.

BEATRICE KELEHER responded via email to [6] MAYRA PONCE-MENDOZA

advising [6] MAYRA PONCE-MENDOZA that revisions were required.

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".

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