(202) 514-2007 | TDD (202) 514-1888
THURSDAY, APRIL 8, 2004
CHARGED AND ANOTHER PLEADS GUILTY IN EXTORTION CONSPIRACY CONNECTED WITH
SUPERAQUEDUCT CONSTRUCTION CONTRACTS
IN SAN JUAN, PUERTO RICO
WASHINGTON, D.C. - Assistant
Attorney General Christopher A. Wray of the Criminal Division announced today
that two defendants have been charged, and a third has pleaded guilty, in
connection with a public corruption investigation into a construction project
in Puerto Rico known as Superaqueduct.
A federal grand jury in
San Juan, Puerto Rico returned a 13-count indictment today charging ReneVazquez-Botet
and Marcos Morell-Corrada with conspiracy, extortion and fraud. The indictment
alleges that in early 1995, the defendants, together with Jose Granados-Navedo
- then a member of the House of Representatives of the Commonwealth of Puerto
Rico - extorted money from engineering and construction contractors based
in Puerto Rico who obtained contracts for the construction of Puerto Rico's
Superaqueduct, a $372 million project that included the construction of a
50-mile water pipe from the west to the east of the island. The indictment
alleges that Vazquez-Botet, Morell-Corrada and Granados-Navedo demanded more
than $2 million from the contractors for assistance in securing and preserving
their Superaqueduct contracts.
Vazquez-Botet, 51, held a variety of positions with the political party which
controlled the executive branch in Puerto Rico during the relevant period.
He is also a pediatric ophthalmologist. Under the extortion scheme, between
1996 and 1999 he is alleged to have received cash payments totaling over $300,000
and to have directed that payments be made to third-parties totaling approximately
$80,000. The indictment also charges that Vazquez-Botet fraudulently concealed
the extortionate payments and other income on his income tax returns for the
Commonwealth of Puerto Rico.
Morell-Corrada, 58, served
as the Secretary-General of the same political party as Vazquez from 1991
until his resignation in 1996, when he resumed the private practice of law.
The indictment alleges that he received approximately $125,000 between September
1997 and May 1999, mostly under the guise of a sham retainer agreement for
legal services. He is also alleged to have received payments in the form
of: (1) purchases of appliances for his residence, (2) the payment of fees
he incurred for architectural services related to a building he was rehabilitating,
(3) car rentals, and (4) a donation to a basketball team with which he was
associated. According to the indictment, Marcos Morell-Corrada fraudulently
concealed a portion of his income from the extortion scheme on his tax returns
for the Commonwealth of Puerto Rico.
In a related case, the federal district court in Puerto Rico today unsealed
a plea entered by Jose Granados-Navedo, 58, on March 31, 2004 to a one-count
information charging him with conspiracy for his role in the scheme to extort
money from the local contractors on the Superaqueduct project. Granados was
the Vice President of the House of Representatives of the Commonwealth of Puerto
Rico, and Chairman of the House Social Economic and Development Commission,
which had responsibility for oversight of infrastructure projects, including
the Superaqueduct. As part of his plea, Granados-Navedo admitted to receiving
more than $150,000 in the scheme. Granados-Navedo was released pending sentencing,
and faces a possible prison term of up to five years and a $250,000 fine.
If convicted of all counts, defendant Vazquez-Botet would face up to 100 years
in prison and $2 million in fines. Morell-Corrada would face up to 110 years
in prison and $2.5 million in fines.
An indictment is merely an allegation. Defendants are presumed to be innocent
until proven guilty.
This case is being prosecuted by Trial Attorneys Mary Butler and Matthew Solomon
of the Public Integrity Section of the Criminal Division, U.S. Department of
Justice, headed by Section Chief Noel L. Hillman, and investigated by the FBI's
San Juan Division, headed by Acting Special Agent in Charge Stanley J. Borgia.
The Office of the Comptroller for the Commonwealth of Puerto Rico provided
assistance in the investigation. The United States Attorney's Office for the
District of Puerto Rico is recused from this matter.
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