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School bus company owners convicted of bid rigging and mail fraud in Puerto Rico
Published on January 28, 2017 Email To Friend    Print Version

SAN JUAN, Puerto Rico -- Following a week-long trial, a federal jury in Puerto Rico has convicted four individuals for participating in bid rigging and fraud conspiracies at an auction for public school bus transportation services in Puerto Rico’s Caguas municipality.

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Gavino Rivera Herrera, Luciano Vega Martínez, Alfonso Gonzalez Nevarez and René Garay Rodríguez were found guilty on Thursday in the US District Court of the District of Puerto Rico, in San Juan, for conspiring to rig bids and allocate the market for public school bus transportation contracts in the municipality of Caguas from approximately August 2013 until May 2015.

Each individual was also found guilty of conspiracy to commit mail fraud and four counts of mail fraud for defrauding the municipality of Caguas to fraudulently obtain contracts for school bus transportation services. Sentencing is set for May 30, 2017.

“These defendants enriched themselves at the expense of Puerto Rico schools and have been held accountable by a jury of their peers,” said Acting Assistant Attorney General Brent Snyder of the Department of Justice’s Antitrust Division. “The division will continue to work with our law enforcement partners to ensure that school districts and other consumers benefit from competitive markets.”

According to evidence presented at trial, the four school bus company owners and other co-conspirators carried out the conspiracy by agreeing during meetings and communications to allocate contracts for transportation routes awarded by the municipality of Caguas.

Trial evidence showed that the conspirators submitted fraudulent certifications and received award letters by certified mail in connection with their conspiracy to defraud the Municipality of Caguas.

The defendants were convicted of bid rigging and market allocation in violation of the Sherman Act, which carries a maximum penalty of ten years in prison and a $1 million fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

They were also convicted of one count of conspiracy to commit mail fraud and four counts of mail fraud. Each count of mail fraud, and conspiracy to commit mail fraud, carries a maximum sentence of 20 years in prison and a $250,000 fine.

Thursday’s conviction arose from a federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in Puerto Rico’s school bus transportation services industry.
 
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