A million-dollar fraud scheme revealed today, Thursday, by federal authorities involves nearly 150 individuals, including players and coaches linked to baseball in Puerto Rico.
The head of the federal prosecutor’s office in Puerto Rico, Stephen Muldrowreported at a press conference that 44 people against whom arrest warrants were issued today are part of a “network” of individuals who fraudulently requested assistance from the United States government for small businesses affected by the COVID-19 pandemic.
Muldrow indicated that today’s defendants participated in a fraud conspiracy that lasted from April 2020 to May 2023. The fraud reportedly amounted to $1,236,855, adding to the $9 million announced last month in a related indictment.
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The prosecutor said that the investigation continues and that, of those 150 who consider to have been participants, “another 100 are missing from being with us.” So far, they have accused 50.
Regarding the baseball players and coaches included in the indictment announced today, Muldrow identified:
– Hendrick Socorro Sanchez Ortaalias “Cuba” and “Tito”, as a coach with the Leones de Ponce.
– Alexis Pantojas Diaz, player for the Pennsylvania York Revolution in the United States Minor Leagues.
– Christian Rivera Renovalesplayer for the Halcones de Gurabo in Double A baseball.
– Sergio Leon Perezcoach in the Youth Coliceba in Cidra and the Coamo Marathoners.
– Carlos Pena Santiagoformer player of the Cangrejeros de Santurce and coach of the Criollos de Caguas in winter baseball.
– Luis Rodriguez de Jesuscoach of the Coamo Marathoners.
– Jan Hernandez Martinezwinter league player and currently active in the Mexican league.
“Hendrick Socorro Sánchez Orta worked with the Leones de Ponce in the Roberto Clemente Professional Baseball League. Some are players or coaches, like Jan Hernández Martínez, who is playing in Mexico and that is why he is not arrested today,” Muldrow said.
Sánchez Orta appears as the main defendant in the indictment revealed today, but Muldrow pointed out that this defendant worked as a recruiter for the other defendants to participate in the fraud scheme led by Manfred Pentzke Lemus, alias “The Accountant” or “The Manager ”.
Pentzke Lemus was indicted last April in a first round of arrests for the same fraud scheme and faces money laundering charges.
“Pentzke Lemus, along with (today’s) number one defendant Hendrick Socorro Sánchez Orta, recruited the other 43 individuals charged today to participate in the scheme to obtain ‘EIDL’ and ‘PPP’ loans using false representations and false pretenses,” he said. Muldrow.
The prosecutor was referring to two types of loans granted by the federal Small Business Administration (SBA) to help merchants through programs approved by the United States government.
EIDL (Economic Injury Disaster Loan) loans were approved to help merchants make payments that they could have afforded if the COVID-19 emergency had not occurred. Meanwhile, the PPP (Paycheck Protection Program) loans were to help merchants pay payroll costs, mortgage interest, rent and public services.
How was the scheme?
According to the charges, the six people charged in April and the 44 now, along with other “accomplices,” submitted fraudulent applications to obtain those SBA loans.
“Defendants and their accomplices made false representations in the applications, including 2019 income, number of employees, wages paid, and false certifications that funds would be used for permitted uses”Muldrow explained.
He added that they “opened and used bank and email accounts in order to further the conspiracy.”
As part of the fraudulent operation, Muldrow noted, the ringleaders of the scheme charged people who received the loans fraudulently.
He noted that Pentzke Lemus received $5,000 each, while Sánchez Orta received $3,000 for each participant. These items came from the funds that each applicant received through deception, using the rest “to benefit himself and others, including for prohibited expenses.” Muldrow estimated the average for each loan at $20,000, for a total of 52 fraudulent applications submitted to the SBA.
“They received the payments in cash transactions or disguised in transactions that appeared to be for professional services or payroll expenses, usually in checks,” Muldrow said.
“It’s all about a network of this group”he added.
According to court documents, in operating the scheme Pentzke Lemus and Sánchez Orta received help from other defendants last month: Rodolpho Pagesy Roussel, alias “Banquero”; Augusto Lemus Berríos, alias “Cousin”; Jonatan Ben David Prieto De Val, aka “Johnny Millones”, and Ligia Lemus de Pentzke.
Together they “orchestrated a scheme to defraud” the SBA and an institution identified as “Bank 1”, to whom they presented “fictitious documents” on taxes, payroll, bank statements, identifications, the Public Ministry said.
It also alleged that Pentzke Lemus was the main organizer, in the fraud and money laundering. Meanwhile, Pagesy Roussel “used his position” at the bank where he worked to “get fraudulent PPP applications approved.
Federal authorities are in the process of forfeiting approximately $848,957 found in connection with this scheme in “Bank 1,” which was not identified.
For his part, Lemus Berríos assisted in the preparation of fraudulent requests, while Ruiz De Val acted as carrier of the money collected by the leaders and Lemus de Pentzke received the legal commissions from the participants.
According to Muldrow, Socorro Sánchez “recruited other co-conspirators who have not been charged” and would have used their relationship in baseball to attract other people close to the sport to participate in the scheme.
“They participated to generate loans of $20,000. If they paid $5,000 to Manfred and paying $3,000 to ‘Cuba’ (Sánchez Orta), maybe they will receive $12,000. The question is whether it’s worth $12,000 to destroy your future. If he wants to be a player in the professional leagues, and for that $12,000 he’s going to miss out on that opportunity,” Muldrow said.
He added that “when they think that easy money is easy, the truth is that it is not easy. There are consequences. If they want to sell their soul for $12,000, well, they understand that maybe we’re not going to find out, but we’re going to find out.”
“People have to think if they are going to be part of the solution in this country or if they are going to be stealing money every time they think it is easy; that someone like ‘Cuba’ come and tell him ‘you have to fill out some paperwork and you will receive $12,000,’ she said. “There are more than 150 people involved in this group.”
How many are left to arrest?
As of today’s noon, of the 44 defendants today, 36 had been arrested, while three others were waiting who warned that they were going to turn themselves in voluntarily.
He said that they still needed to arrest one who is in Florida, another who is in Massachusetts, one who does not appear and Hernández Martínez who is in Mexico.
If convicted on the fraud charges, the defendants face maximum sentences of 30 years in prison, while Sánchez Orta faces additional money laundering charges, which carry maximum sentences of 20 years in prison.
