Mayagüez mayor expresses confidence that justice system will exonerate him
By The Star Staff
Mayagüez Mayor José Guillermo Rodríguez Rodríguez, who was suspended from the job he has held since 1993, said Thursday that he was at ease even though a San Juan judge did not believe his arguments that he was the victim of an investment scam that defrauded the western coastal city of some $9 million in public funds.
“Let no one lose faith in justice, no matter the circumstances, let us always fight for it,” Rodríguez said in a written statement. “My greatest satisfaction, as I anticipated, there were no allegations of corruption, bribery, appropriation of public funds, or personal benefit from the investment process, nor to the finance manager; I am at peace.”
The lawyer for the Popular Democratic Party mayor had argued Wednesday in court that the mayor was ripped off and that the scam was examined by banking institutions, the FBI and the Comptroller’s Office, none of which have charged the mayor. Still, Judge Iraida Rodríguez Castro found probable cause to arrest Rodríguez for embezzlement of public funds and negligence in his duties. She also found cause against Yahaira Valentín Andrades, the city’s director of finance and budget.
The judge imposed a $50,000 bail on each of the charges against the two.
Harry Padilla, Rodríguez’s lawyer, said that thanks to the mayor’s intervention, the city recovered the funds.
In December 2020, the U.S. Securities and Exchange Commission (SEC) charged an unregistered investment adviser based in Orlando, Florida for defrauding the Municipality of Mayagüez, and misappropriating $7.1 million in taxpayer funds.
According to the SEC’s complaint, in 2016, Eugenio García Jiménez Jr. told municipal officials that he could invest some $9 million of the municipality’s funds with no risk to principal and earn the city annual returns of around 10%. As set forth in the complaint, the city intended to use returns from this investment to fund municipal projects, including the construction of a new trauma center. The complaint alleges that García Jiménez falsified documents, including bank correspondence and brokerage opening documents, to convince municipal officials to entrust him with the municipality’s funds. As alleged in the complaint, instead of executing an investment strategy designed to generate the promised returns, García Jiménez purchased U.S. Treasury notes, immediately took out a margin loan pledging the notes as collateral and, over a period of six months, misappropriated $7.1 million by transferring funds to himself, entities he controlled, and his associates.
The scheme took place through Mayagüez Economic Development Inc., or MEDI, a public for-profit corporation created with the purpose of promoting the economic development of Mayagüez and the western region of Puerto Rico, generating jobs, supporting infrastructure projects, and improving the quality of life of citizens.
“The municipality chose García as an investment adviser and entrusted him with millions of dollars of taxpayer funds,” said Eric I. Bustillo, director of the SEC’s Miami Regional Office. “As alleged, García took advantage of that trust and misappropriated millions of dollars of taxpayer funds, causing the municipality great harm.”
In March 2021, federal law enforcement charged García Jiménez with operating as an unregistered investment adviser along with six others on wire fraud charges related to an alleged scheme to defraud a city in Puerto Rico.
A federal grand jury in the District of Puerto Rico indicted García Jiménez and six others with 33 counts of wire fraud and money laundering on March 22. They pleaded guilty.