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Former Puerto Rico Governor’s Bribery Scheme leads to arrest

Department of Justice

U.S. Attorney’s Office

District of Puerto Rico


FOR IMMEDIATE RELEASE

Thursday, August 4, 2022

Former Governor of Puerto Rico Arrested in Bribery Scheme

WASHINGTON – A former governor of Puerto Rico was arrested today on bribery charges related to the financing of her 2020 campaign.

Relatedly, a political consultant for the former governor and the president of the international bank have also pleaded guilty to participating in the bribery scheme.

“The alleged bribery scheme rose to the highest levels of the Puerto Rican government, threatening public trust in our electoral processes and institutions of governance,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division.  “The Department of Justice is committed to holding accountable those who wrongly believe there is one rule of law for the powerful and another for the powerless.  No one is above the rule of law.”

According to the indictment, from December 2019 through June 2020, then-Governor of Puerto Rico Wanda Vázquez Garced, 62, of San Juan, allegedly engaged in a bribery scheme with various individuals, including Julio Martín Herrera Velutini, Frances Díaz, Mark Rossini, and John Blakeman to finance Vázquez Garced’s 2020 gubernatorial election campaign.

“The criminal actions of the defendants in this case strike a blow to the heart of our democracy and further erode the confidence of our citizens in their institutions of governance,” said U.S. Attorney W. Stephen Muldrow for the District of Puerto Rico. “Our resolve to bring to justice those entrusted by the public to serve with integrity and who violate that trust remains steadfast. Equally steadfast is our resolve to prosecute those who seek to use their wealth and power to enrich themselves at the expense of honest government. I commend the dedication and hard work of the law enforcement personnel and prosecutors in this case, as well as those individuals willing to come forward and cooperate.”

Herrera Velutini, 50, a dual Venezuelan-Italian citizen residing in London, United Kingdom, owned an international bank operating in San Juan. Díaz, 50, of Puerto Rico was the CEO and President of the international bank owned by Herrera Velutini. Rossini, 60, of Madrid, Spain was a former FBI Special Agent who provided consulting services to Herrera Velutini. Blakeman, 53, of Puerto Rico, is a political consultant who worked on Vázquez Garced’s 2020 campaign.

“Public corruption manifests in many different ways,” said Special Agent in Charge Joseph González of the FBI San Juan Field Office. “Those who engage in this illegal conduct often believe they are above the law or fool themselves into believing this is a victimless crime and thus are not doing anything wrong. Our message is and has been clear. Public corruption erodes the people’s trust in our institutions and fuels civil unrest. As a top priority for the FBI, wherever allegations of public corruption arise, we will investigate. No one is above the law and the victim of this crime, the People, deserve better.”

According to the indictment, beginning in 2019, Herrera Velutini’s bank was the subject of an examination by Puerto Rico’s Office of the Commissioner of Financial Institutions (OCIF), a regulatory agency that oversees financial institutions operating in Puerto Rico. Through intermediaries, Herrera Velutini and Rossini allegedly promised to provide funding to support Vázquez Garced’s 2020 gubernatorial election campaign in exchange for Vázquez Garced terminating the Commissioner of OCIF and appointing a new Commissioner of Herrera Velutini’s choosing. The indictment alleges that Vázquez Garced accepted the offer of a bribe and, in February 2020, took official action to demand the resignation of OCIF Commissioner A and, in May 2020, to appoint OCIF Commissioner B – a former consultant for the international bank owned by Herrera Velutini – who had been personally selected by Herrera Velutini. In return, Herrera Velutini and Rossini allegedly paid more than $300,000 to political consultants in support of Vázquez Garced’s campaign.

The indictment further alleges that following Vázquez Garced’s primary election loss in August 2020, Herrera Velutini sought to bribe her successor, Public Official A, by offering funding in support of Public Official A’s campaign in exchange for Public Official A ending OCIF’s audit of Herrera Velutini’s bank on terms favorable to Herrera Velutini. According to the indictment, between April 2021 and August 2021, Herrera Velutini allegedly used intermediaries to convey his offer of a bribe to a witness who held himself out as a representative of Public Official A, but who was in fact acting at the direction of the FBI. As noted in the indictment, the witness was acting at the direction of the FBI during this timeframe and not actually serving as an intermediary of, or acting on behalf of, Public Official A. In August 2021, Herrera Velutini allegedly directed a $25,000 payment to a political action committee associated with Public Official A, with the understanding and expectation that Public Official A would resolve OCIF’s audit of Herrera Velutini’s bank in the manner requested by Herrera Velutini.

Vázquez Garced, Herrera Velutini, and Rossini are each charged with conspiracy, federal programs bribery, and honest services wire fraud. Vázquez Garced is scheduled to make her initial court appearance today in federal court in the District of Puerto Rico. If convicted on all counts, they each face a maximum total penalty of 20 years in prison.  A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Relatedly, the department also announced the guilty pleas of two individuals in connection with the schemes to bribe Vázquez Garced and Public Official A.

According to court documents, in March, Frances Díaz pleaded guilty to conspiring with Herrera Velutini and others to bribe Public Official A. Díaz was, until February 2022, the CEO and President of the international bank owned by Herrera Velutini. In March, John Blakeman pleaded guilty to conspiring with Herrera Velutini and Rossini to bribe Vázquez Garced, and with Herrera Velutini to bribe Public Official A.

Both Díaz and Blakeman face up to five years in prison. Their sentencing hearings have not yet been scheduled. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, U.S. Attorney Muldrow for the District of Puerto Rico, and Special Agent in Charge Joseph González of the FBI’s San Juan Field Office made the announcement. 

The FBI’s San Juan Field Office is investigating the case.

Trial Attorneys Ryan R. Crosswell, Erica O. Waymack, and Nicholas W. Cannon of the Justice Department’s Public Integrity Section and Assistant U.S. Attorney Seth A. Erbe of the U.S. Attorney’s Office for the District of Puerto Rico are prosecuting the case. Members of the Justice Department’s Money Laundering and Asset Recovery Section also provided assistance with the investigation, including Trial Attorneys Margaret Leigh Kessler and D. Zachary Adams, and Bank Integrity Unit Acting Chief Molly Moeser.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Link:

DOJ Press Release

Categories: Anti-Corruption Bribery Department of Justice (DOJ) Updates Indictments and Arrests

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