Leader Of Miami Crew Sentenced To 63 Months In Prison For Defrauding Banks And Cryptocurrency Exchange Of More Than $4 Million
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that ELIANA BAUTA pled guilty in Manhattan federal court to her involvement in a scheme to steal over $300,000 in funds from the New York City Human Resources Administration (“HRA”). BAUTA perpetrated the offenses in her capacity as an HRA employee. BAUTA pled guilty today before U.S. District Judge Valerie E. Caproni to federal program theft. BAUTA also pled guilty on March 25, 2019 before Judge Caproni to conspiring to commit wire fraud. Co-defendant GERALDINE PEREZ pled guilty before Judge Caproni on February 5, 2019, to her role in the HRA scheme and also to a separate fraudulent scheme involving more than $90,000 of stolen or fraudulently issued U.S. Treasury checks. Co-defendant ERIC GONZALES pled guilty before Judge Caproni on February 5, 2019, to misdemeanor bank theft.
Manhattan U.S. Attorney Geoffrey S. Berman said: “HRA employees like Eliana Bauta are trusted to use their positions to help people in need. Instead, as she has now admitted, Bauta egregiously abused that trust, working with her co-conspirators to steal hundreds of thousands of dollars intended for New York’s needy. As the guilty pleas in this case indicate, we remain vigilant in seeking out and prosecuting abuses of trust by City employees and remain committed to ensuring that federal and local funds go to their intended recipients.”
According to the Complaint, the Indictment, and statements made in the plea proceedings today and on February 5 and March 25, 2019:
HRA is an agency of the City of New York responsible for administering the majority of the City’s public assistance programs. Among other things, HRA provides temporary, emergency cash assistance to individuals and families with social service and economic needs to assist them in reaching self-sufficiency. The emergency assistance is funded by the federal government as well as by New York State and the City.
Since 2015, the City Department of Investigation-Office of Inspector General (“DOI-OIG”) has been investigating two related schemes in which an HRA employee – BAUTA – defrauded HRA and the City by using her position to commit public assistance fraud. BAUTA worked as a Job Opportunity Specialist for HRA from approximately January 2008 to on or about May 23, 2018. As a Job Opportunity Specialist, BAUTA was at various points responsible for interviewing benefits applicants, compiling and submitting applicants’ paperwork, and disbursing applicants’ benefits.
In the first of the two schemes, BAUTA is alleged to have caused the fraudulent issuance of emergency benefits funds to relatives and acquaintances, including GERALDINE PEREZ and ERIC GONZALES, among others, who in truth and in fact did not qualify for those funds. For example, BAUTA altered a police report submitted by an actual HRA client by changing the name of the victim to a family member’s name, and then entered the doctored report into HRA systems in support of a request for benefits to be issued to that family member. On another occasion, BAUTA submitted a request for emergency benefits to be issued to an individual after an alleged disaster, but no such disaster had occurred. Both PEREZ and GONZALEZ were knowing recipients of such fraudulently issued funds and shared the proceeds with BAUTA.
In the second scheme, BAUTA is alleged to have obtained access to and misappropriated emergency benefits checks issued to actual HRA clients. Instead of providing the checks to the legitimate clients in need of emergency funding, BAUTA gave them to PEREZ and GONZALES, among other of BAUTA’s relatives and associates, who deposited the checks in their own bank accounts and withdrew the funds, and then shared the proceeds with BAUTA. In total, the two schemes resulted in losses to HRA of at least $309,000 in public funds.
In addition to obtaining stolen HRA checks into her bank account and the bank accounts of family members, PEREZ also deposited or caused to be deposited into these same accounts improperly obtained United States Treasury checks that were issued to other individuals as tax refunds. In total, 23 such checks worth more than $91,000 were deposited into bank accounts of PEREZ and her family members and associates. PEREZ then split the proceeds with a tax preparer who assisted in the scheme.
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BAUTA, 35, of the Bronx, New York, pled guilty to one count of federal program theft, which carries a maximum potential sentence of 10 years in prison; and one count of conspiracy to commit wire fraud, which carries a maximum potential sentence of 20 years in prison.
PEREZ, 60, of the Bronx, New York, pled guilty to one count of conspiracy to commit federal program theft, which carries a maximum potential sentence of five years in prison; and one count of receiving stolen government money or property, which carries a maximum potential sentence of 10 years in prison.
GONZALES, 26, of the Bronx New York, pled guilty to one count of misdemeanor bank theft, which carries a maximum potential sentence of one year in prison.
The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by the judge. BAUTA is scheduled to be sentenced before Judge Caproni on July 17, 2019. PEREZ is scheduled to be sentenced before Judge Caproni on May 16, 2019. GONZALES is scheduled to be sentenced before Judge Caproni on June 20, 2019.
Mr. Berman praised the investigative work of DOI and the Internal Revenue Service.
This case is being handled by the Office’s Public Corruption Unit. Assistant United States Attorneys Paul Monteleoni and Catherine Ghosh are in charge of the prosecution.