Eight Individuals Indicted for Social Security Fraud in Puerto Rico

August 01, 2019

From the U.S. Attorney’s Office, District of Puerto Rico:

SAN JUAN, P.R. – On July 24 and 26, 2019, a Federal Grand Jury in the District of Puerto Rico returned six separate indictments charging eight (8) individuals with fraud against the Social Security Administration (SSA) in Puerto Rico, announced U.S. Attorney Rosa Emilia Rodríguez Vélez for the District of Puerto Rico. These cases were investigated by the Social Security Office of Inspector General (SSA-OIG) with the collaboration of the Department of Homeland Security, Office of Inspector General (DHS-OIG); Health and Human Services, Office of Inspector General (HHS-OIG); the Food and Drug Administration, Office of Criminal Investigations (FDA); Department of Veterans Affairs, Office of the Inspector General (VA-OIG); Federal Bureau of Investigation (FBI); Drug Enforcement Administration (DEA); and the Police of Puerto Rico.

The SSA is responsible for the implementation of the Disability Insurance Benefits Program. The SSA provides monetary benefits to workers with severe, long-term disabilities, who have worked in SSA-covered employment for a required length of time. Spouses and dependent children of disabled workers may also be eligible to receive benefits. Pursuant to SSA regulations, a claimant must prove to SSA that he or she is disabled by furnishing medical and other evidence with the application. The application and supporting evidence is evaluated by SSA to determine the individual’s medical impairments and the effect of the impairment on the claimant’s ability to work on a sustained basis.

Three indictments charged four individuals with theft of government property, health care fraud, concealment, or failure to disclose work activity to SSA, and false statements or representations to the SSA. These defendants knowingly and willfully embezzled, stole, and converted to their own use the Social Security Disability Insurance Benefit payments to which the defendants knew that they were not entitled.

The defendants charged with accepting by fraud the Social Security Disability Insurance Benefit payments, knowing that they were not entitled to the same, are: Brunilda Rodríguez-Reyes and her son, Gerardo O. Navedo-Rodríguez, who received $156,616.50 from SSA, and fraudulently caused Medicare to pay approximately $55,151.51; Lalin Mercado-Vargas who received $168,854.90 from SSA and fraudulently caused Medicare to pay him approximately $77,780.78; and Ramón Julbe-Rosa (Julbe-Rosa), who received $79,369.00 from SSA and fraudulently caused Medicare to pay him $47,002.10.

Defendant Julbe-Rosa is also facing one count of fraud against the Department of Veterans Affairs for fraudulently receiving unemployability benefits, and one count of Fraud in Connection with Major Disaster or Emergency Benefits related to Hurricane María. Julbe-Rosa applied for an SBA Disaster Loan by falsely representing that on September 20, 2017, his primary residence, damaged by Hurricane Maria was located in Morovis, Puerto Rico when he well knew that this was not his primary residence. As a result, the defendant fraudulently received $50,000.00 from SBA. Julbe-Rosa was also charged with his wife Ena I. Octaviani with Introduction into Interstate Commerce of Unapproved New Drugs. Defendant Julbe-Rosa established and operated the website www.acietedeguanabana.com through which he promoted and sold various products intended as treatments for serious medical conditions without FDA approval. Defendant Julbe-Rosa sold at least $341,242.26 worth of unapproved new drugs. Defendant Ena I. Octaviani-Santana was charged in this same indictment with aiding and abetting Julbe-Rosa to submit false information to SSA.

Defendant Carlos Del Valle-Figueroa was charged with distribution of controlled substances, theft of government property, concealment, or failure to disclose work activity to SSA, and false statements or representations to the SSA. Del Valle-Figueroa fraudulently received $33,222.00 from SSA.

Defendant Johana Torres-Figueroa was charged with making false statements to SSA, aggravated identity theft, and fraud in connection with major disaster or emergency benefits. Between October 11, 2017, and continuing through January 2, 2018, Torres-Figueroa falsely and fraudulently applied for FEMA benefits on behalf of an elderly victim (M.G.O.), although the defendant knew that she was not the caregiver with authorization to request assistance on behalf of the elderly victim. As a result of this fraudulent scheme, Johana Torres-Figueroa received $500.00 for Critical Needs Assistance; $869.65 for Home Repair Assistance; $3,807.66 for Personal Property Assistance; and $748.00 for Rental Assistance, for a total of $5,925.31.

In another indictment, David Arocho-Castro (son of C.C.R) was charged with theft of government property. After C.C.R died on December 21, 2011, David Arocho-Castro failed to notify SSA about her death and used the money that his mother received from the SSA, benefits to which he knew he was not entitled. As a result of this scheme, between January 3, 2012, and continuing through December 3, 2018, David Arocho-Castro stole from SSA approximately $31,392.00.

“The U.S. Attorney’s Office and Federal Law Enforcement partners remain vigilant in our quest to identify those corrupt individuals who by deceit and fraud attempt to illegally benefit from federal funds depriving other law abiding citizens from much needed health benefits, disability and emergency assistance. We remain steadfast in our commitment to bring to justice unscrupulous individuals who illegally seek personal financial gain,” said United States Attorney Rosa Emilia Rodríguez-Vélez.”

“Today’s arrests are the latest in our continued and ongoing effort to bring to justice all individuals who commit Social Security Fraud, said SSA-OIG, Special Agent in Charge John F. Grasso. “I am very grateful for the efforts of our law enforcement partners involved in these investigations, and for the continued commitment from the United States Attorney’s Office for the Commonwealth of Puerto Rico to aggressively pursue these important cases. I strongly encourage the public to report suspected instances of Social Security fraud to our dedicated Fraud Hotline at 1-855-278-5982 or https://oig.ssa.gov/report.”

“The FBI appreciates the outstanding work of the U.S. Attorney’s Office, the Office of Inspector General for the Social Security Administration, Health & Human Services, and the Drug Enforcement Administration, and remains confident the we and our partners have the capacity to address any fraud scheme that threatens those who are in real need of these benefits, especially the elderly and the children,” said Judith Priegues-Lopez, Assistant Special Agent in Charge of the FBI-San Juan Field Office. “As always, we encourage anyone who has information on this fraud and any other fraud schemes to come forward. We are available 24 hours a day at 787-754-6000 and https://www.fbi.gov/tips”.

“The FDA’s drug approval process ensures that patients receive safe and effective products. Evading the FDA’s authority and selling unapproved drugs to vulnerable consumers will not be tolerated,” said Justin C. Fielder, Acting Special Agent in Charge, FDA Office of Criminal Investigations, Miami Field Office. “The FDA remains fully committed to aggressively pursuing those who place profits above the health and safety of American consumers.”

Special Assistant U.S. Attorney Vanessa D. Bonano-Rodríguez is in charge of the prosecution of these cases. If convicted, the defendants charged with SSA fraud could face a maximum penalty of 10 years in prison; the defendant charged with Fraud in Connection with Major Disaster (Hurricane María) or Emergency Benefits faces a maximum penalty of up to 30 years in prison; and the defendant charged with health care fraud faces a maximum penalty of up to 10 years in prison. All defendants are subject to a fine of up to $250,000.00. The indictments contain only charges and are not evidence of guilt. The defendants are presumed to be innocent unless and until proven guilty.

The U.S. Department of Justice established the National Center for Disaster Fraud (NCDF) to investigate, prosecute, and deter fraud in the wake of Hurricane Katrina, when billions of dollars in federal disaster relief poured into the Gulf Coast region. Its mission has expanded to include suspected fraud from any natural or manmade disaster. More than 20 federal, state, and local agencies participate in the NCDF, which allows the center to act as a centralized clearinghouse of information related to disaster relief fraud.

Members of the public are reminded to apply a critical eye and do their due diligence before trusting anyone purporting to be working on behalf of disaster victims, and to be especially cautious of anyone who contacts you seeking personal identifying information or financial information. Members of the public who suspect fraud involving disaster relief efforts, or who believe that they have been the victim of fraud from a person or organization soliciting relief funds on behalf of disaster victims, should contact the National Disaster Fraud Hotline toll free at (866) 720-5721. The telephone line is staffed by a live operator 24 hours a day, 7 days a week. You can also fax information to the Center at (225) 334-4707, or email it to disaster@leo.gov. Learn more about the NCDF at www.justice.gov/disaster-fraud and watch a public service announcement here.