Puerto Rico School Bus Contractors Jailed for Fraud

The Department of Justice announced the sentences of four school bus contractors in Puerto Rico who were found guilty of colluding and committing felonies in order to corner the local school transportation market. 

Gavino Rivera Herrera, Luciano Vega Martínez, Alfonso Gonzalez Nevarez and René Garay Rodríguez each owned a school bus contracting company on the U.S. Territory island. They were indicted in May 2015 of committing mail fraud and working together to rig bids and allocate the market of student transportation in the Caguas municipality since August of 2013.

The defendants attended auctions held to award school transportation contracts, appeared to bid competitively while keeping to secret bidding agreements, submitted false information on official bids, fraudulently secured contracts to provide school bus services in Caguas, and caused the municipality to pay higher rates.

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"Price fixing victimizes the consumer which in this case are the honest, hardworking and tax paying citizens living in Puerto Rico," warned Carlos Cases, special agent in charge of the FBI's San Juan division at the time of the indictment. "Let there be no doubt, the FBI, along with law enforcement partners, will continue to investigate, charge and prosecute any individuals involved in these type of acts."

The four defendants were convicted on Jan. 26, 2017 after a week-long trial. "(The convictions) serve as a reminder that federal law enforcement agencies intend to vigorously prosecute those who manipulate government bidding processes to enrich themselves illegally," U.S. Attorney Rosa Emilia Rodríguez-Vélez said at the time. A fifth defendant, José L. Arroyo-Quiñones, was indicted but not convicted.

On Tuesday, Vega Martínez, Gonzalez Nevarez and Garay Rodríguez each were sentenced to 12 months and one day in prison. Due to medical conditions, Rivera Herrera was sentenced to six months of home imprisonment and a year and six months of probation after that. Their financial penalty is still to be decided.

"These transportation company owners lined their own pockets with public funds that were intended to provide essential services to at-risk school districts," said Assistant Attorney General Makan Delrahim of the Department of Justice's Antitrust Division. "The sentences imposed today reflect the serious harm caused by the actions of the defendants who enriched themselves at the expense of schoolchildren and American taxpayers."

Last modified onFriday, 09 February 2018 09:18