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  • Writer's pictureThe San Juan Daily Star

Businessmen plead guilty to stealing federal funds

W. Stephen Muldrow, United States Attorney for the District of Puerto Rico

By The Star Staff

Two businessmen have pleaded guilty to stealing federal funds, the U.S. Attorney’s Office in Puerto Rico announced Monday.

Martin D. Cruz Vázquez, president of FiveStar Pest Control Inc., and Luis O. Agosto Meléndez, president of CoolBreeze Air Conditioning Inc., pleaded guilty to the theft of federal program funds provided by the U.S. Department of Housing and Urban Development (HUD) for the administration of Public Housing Projects (PHPs) in Puerto Rico.

According to court documents, Cruz Vázquez used FiveStar to obtain fraudulent contracts with the American Management and Administration Corporation (AMAC) and to submit fraudulent invoices for work that was not rendered. From 2014 to August 2022, Cruz Vázquez illegally obtained some $363,937 in HUD operational funds that were earmarked for the administration of PHPs.

Similarly, from 2014 to August 2019, Agosto Meléndez utilized CoolBreeze to obtain fraudulent contracts with AMAC causing the theft of approximately $73,199.46 in HUD operational funds.

Both schemes were carried out with the assistance of AMAC managers, including president Walter Pierluisi Isern, who were convicted in 2023 for related federal program theft in excess of $3.7 million.

“The U.S. Department of Justice will continue to prosecute those who attempt to defraud government programs,” said W. Stephen Muldrow, United States Attorney for the District of Puerto Rico. “These plea agreements send a clear message to those who misuse government funds that they will be held accountable for their crimes.”

“The guilty pleas relating to theft of funds from a HUD program meant to benefit low-income families is a signal that repercussions await all those that would seek to illegally obtain taxpayer dollars through fraudulent schemes,” said HUD Office of the Inspector General (OIG) Southeast Region Special Agent-in-Charge Jerome Winkle. “HUD OIG remains committed to working with our prosecutorial and law enforcement partners to protect the integrity of HUD’s programs and ensure vulnerable people in our communities are provided critical resources upon which they can rely.”

The defendants are scheduled to be sentenced on two separate dates in April and face a maximum sentence of 10 years in prison. A federal district court judge will determine the sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

HUD OIG investigated the case with the assistance of the FBI.

Assistant U.S. Attorney Marie Christine Amy is prosecuting the case.

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