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Two Puerto Rican men indicted in bankruptcy fraud schemes

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On August 2, 2022, the United States Attorney’s office in San Juan, Puerto Rico, announced two separate grand jury indictments for bankruptcy fraud. Each defendant is a resident of Puerto Rico. The allegations in the indictments demonstrate the vast range of fraudulent conduct that can victimize innocent residents of Puerto Rico and the 50 continental states.

Using bankruptcy to defraud creditors

In the first such indictment, the defendant was accused of making materially false statements between May 2019 and August 2021 to defraud his creditors. He has also been charged with nine counts of concealment of assets during the bankruptcy proceeding and eight counts of making false statements regarding the bankruptcy proceeding. The defendant is accused of using his son’s bank account to conceal income and assets.

He is also accused to stating under oath that his mother was claimed as a dependent on tax returns for 2015, 2016, 2017 and 2018, when in fact she had died in 2011. The penalties in the event of a conviction are up to 5 years for each violation, a $250,000 fine, and 3 years of supervised release.

Defrauding family members

The second indictment charged the defendant with bankruptcy in making allegedly false statements in five separate bankruptcy cases to cheat his five children out of child support payments. The defendant owned and operated a maintenance company, the income from which was concealed from creditors in the bankruptcy proceeding.

The defendant is also alleged to have collected money from a public housing management firm that employed him. Finally, the defendant was indicted for receiving money through a bank account at Banco Popular de Puerto Rico that was owned by his grandmother.

Both cases were referred to the United States Attorney’s Office by the San Juan Office of the United States Trustee.

Solid legal advice

Many residents of the continental United States visit Puerto Rico and have relatives still living on the island. For this reason, fraudulent bankruptcy and securities schemes spill into the lives of innocent victims living in the United States. Anyone who may have been touched by such a scheme may wish to contact an attorney who is familiar with both the commonwealth and federal court systems that operate in Puerto Rico.