Four people face federal charges they schemed to steal emergency disaster relief funds in the U.S. Virgin Islands.
Federal prosecutors unsealed an indictment on Tuesday that charged the four individuals with major disaster fraud, conspiracy to commit wire fraud, wire fraud and aggravated identity theft.
The scheme was carried out from August to October of last year and involved $840,000, prosecutors said. It allegedly targeted federal disaster assistance offered in the Virgin Islands after the destruction of hurricanes Irma and Maria in September 2017.
Specifically, the government said, the scheme was aimed at a Federal Emergency Management Agency program that provided federal funds for essential repairs to damaged homes. Under this program, FEMA worked with state, local, and territorial governments to execute the repairs.
Two of the individuals, Leovigildo Gómez-Geo and Wilfredo Valentin-Perez, were arrested last Friday and later released on $20,000 bail by U.S. Magistrate Judge Bruce McGiverin after making an appearing in court in the U.S. District of Puerto Rico.
The indictment says Gómez-Geo, 32, works for a construction company called Campbell Development. The resident of Puerto Rico has previously worked as an adviser to the administration of former Gov. Alejandro Garcia Padilla and, most recently, was employed as a financial analyst for Paulson & Co., the hedge fund run by billionaire John Paulson.
The indictment says Valentin-Perez is an employee of Puerto Rico-based Lopez Investments. He also formerly worked for Paulson & Co. in Puerto Rico, overseeing rental properties owned by the hedge fund.
Paulson & Co. is not mentioned in the indictment or in a Justice Department's statement about the charges. The hedge fund declined to comment on the story.
The attorney for Gómez-Geo, Carlos Sagardia says that his client is innocent.
"Mr. Leovigildo Gómez-Geo has not committed any crimes. He will fully defend himself from all charges brought against him by the United States Government and expects to clear his name and professional reputation during the course of these proceedings," said Carlos Sagardia.
The attorney for Valentin-Perez could not be reached for comment.
The other two defendants named in the indictment are Juli Campbell, the owner of Campbell Development, and Luz Soraya Rodriguez, who is an employee of Lopez Investments.
U.S. attorney's office for the District of the Virgin Islands did confirm that both Campbell and Rodriguez had been arrested, but didn't give details on the location of their arrests. Lawyers for the two could not immediately be located.
According to the indictment, Campbell's company was hired as a subcontractor to perform work funded under the FEMA program in St. Croix, V.I. Prosecutors say Campbell and her co-defendants allegedly submitted fraudulent invoices in the scheme. Campbell allegedly had workers submit signed time sheets that were left blank and then directed employees to fill in false information attesting to work that was not done. The scheme even included invoices for workers who were not actually on the island, prosecutors said.
The false invoices span from August 1, 2018, to October 29, 2018, according to the indictment.
"The Department of Justice is committed to ensuring that federal dollars are used for their intended purposes," said U.S. Attorney Gretchen Shappert. "The United States Attorney's Office for the Virgin Islands is especially committed to making certain that federal funds intended for the victims of natural disasters are accounted for and used consistent with FEMA's directives."
The case is being investigated by the Department of Homeland Security Office of the Inspector General as well as Homeland Security Investigations and is being prosecuted by Assistant U.S. Attorney Nathan Brooks.