Former Municipal Director of Finance Pleads Guilty to Misappropriation of $2.5 Million
SAN JUAN, Puerto Rico – Defendant Victor Cruz-Quintero pleaded guilty before United States Magistrate Judge Marcos E. López to one count of misappropriation of government funds from the United States Department of Housing and Urban Development (HUD) Section 108 Loan Guarantee Program, announced W. Stephen Muldrow, U.S. Attorney for the District of Puerto Rico.
On or about October 28, 2014, defendant Victor Cruz-Quintero used his position as the director of finance of the Municipality of Toa Baja to make an unauthorized transfer of $2,538,164.41 from HUD Section 108 Loan Guarantee Program funds into the municipality’s general fund. These funds were utilized to make payroll payments to municipal employees and to pay various municipal contractors.
All federal funds and financing provided by HUD to the Municipality of Toa Baja as a part of the Section 108 Loan Guarantee Program were required to be used only for purposes authorized by HUD. At no time did HUD authorize the Municipality of Toa Baja or any municipal employees to utilize HUD federal funds or financing to pay non-HUD program municipal employees or to otherwise pay non-HUD program municipal contracts.
On March 18, 2021, the Municipality of Toa Baja recognized the misappropriation of these funds and executed a Repayment Agreement with HUD to make five annual payments to HUD totaling $2,605,164.
This case was investigated by the Federal Bureau of Investigation (FBI), the U.S. Department of Housing and Urban Development Office of the Inspector General (HUD-OIG), and the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG). Assistant U.S. Attorney Seth A. Erbe is in charge of the prosecution of this case.
Defendant Victor Cruz-Quintero faces a maximum penalty of 10 years in prison. A federal district court judge will determine the sentence after considering the U.S. Sentencing Guidelines and other statutory factors.