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Press Release

Individual Sentenced to 27 Months in Prison for a 1.2 Million Dollar Fraud Scheme Involving the Creation of Fictitious Employees and the Misuse of Social Security Numbers

For Immediate Release
U.S. Attorney's Office, District of Puerto Rico

SAN JUAN, Puerto Rico – United States District Court Judge Pedro A. Delgado sentenced Gilberto J. Meléndez-Colón to two years and three months in prison for conspiracy to commit wire fraud. He was also ordered to pay restitution in the amount of $1,396,008.47.  Meléndez-Colón pleaded guilty on January 31, 2023. Co-defendant Ángel Pagán was sentenced to five years of probation for unlawful disclosure of his social security number.

According to court documents, Meléndez-Colón conspired to defraud Company A, a local family business engaged in short and long-term construction and improvement projects. From January 2012 through July 2017, Meléndez-Colón served as the Accounting Officer in charge of Company A’s payroll. Meléndez-Colón created profiles and accounts for two fictitious employees in the company’s Web Cash Manager Program. Meléndez-Colón used two individuals’ names and social security numbers, including co-defendant ngel Pagán, to create fictitious employee profiles in the company’s Web Cash Manager Program. While creating the fictitious employee profiles, Meléndez-Colón listed his own bank account numbers to receive direct deposits for the payroll of the fictitious employees.

Meléndez-Colón also altered the company’s payroll information by falsely increasing the hours worked by regular employees. Meléndez-Colón would then submit the altered and fraudulent payroll information to management for approval. Once approved, Meléndez-Colón diverted money through the Web Cash Manager Program to his own bank accounts assigned to the two fictitious employees. From January 2012 through July 2017, Meléndez-Colón diverted approximately $1,223,654.21 as part of the unlawful conspiracy.

U.S. Attorney W. Stephen Muldrow of the District of Puerto Rico; Sharon MacDermott, Special Agent in Charge of the Social Security Administration, Office of the Inspector General (“SSA-OIG”); and Rebecca González Ramos, Special Agent in Charge of Homeland Security Investigations (“HSI”) made the announcement.

The Social Security Administration, Office of the Inspector General (“SSA-OIG”) and Homeland Security Investigations (“HSI”) investigated the case.

Special Assistant United States Attorney for the Social Security Administration Vanessa D. Bonano-Rodríguez prosecuted the case.


Updated May 19, 2023

Financial Fraud