The SEC opens investigation into widespread financial manipulation thief and political corruption at PREPA.

It all started five years ago when PREPA announced the issuance of 75 new contracts worth 15 billion dollars that would up-grade their network with lower cost, cutting edge renewable technology. This major

announcement would result in a 20-25% reduction in energy costs, cleaner air, a lower reliance on oil and

energy independence for the island. Bond holders loved the news and invested more of their resources in PREPA bonds.

However, there was a problem, PREPA never intended to build any of these new facilities. It was a complete fraud.

As time passed the holders of these 75 new contracts started to wonder why PREPA was not working in good faith with them to move the projects forward. It made no sense, these projects were good for Puerto Rico and PREPA. The utility did not have to make any outlays of cash to get this new technology and the electricity would be 20-25% less than their current oil based production.

Here is where the law firm of Hegan’s Berman comes in ( Hegan uncovered a scheme where the executives at PREPA were stealing

Over $100,000,000 a year from their oil purchase budget. It appears, according to the lawsuit that this has been going on for over a decade. Financial reports were falsified, oil quality reports were falsified and

the islands political leadership worked to keep it all hidden. The lawsuit specifies individuals, dates, times, swiss bank accounts, documents and whistleblower interviews.

It surely appears that the rabbit hole of corruption in Puerto Rico runs deep and long.

Back to the renewable projects, why did PREPA kill the projects? To protect the on-going thief of $100,000,000 a year from the oil purchase accounts. You see, if lower cost renewables come in to play, the oil billings would drop and they could not keep up the $100,000,000 a year scheme.   It appears lots of folks in Puerto Rico, PREPA executives, politicians and other government bureaucrat’s wanted to preserve their piece of the action.

The big losers, the bondholders, PREPA recently defaulted claiming their energy costs were too high, almost comical knowing what we now know. The other big loser is the PRESS, at best lazy and at worse, incompetent. The renewable developers have been screaming about this for years. Hagan’s filed the lawsuit in September of 2014 with enough specifics to remove any doubt that one of the biggest thief’s of tax payer money is history and one of the biggest cases of bond fraud was very real. I suspect the press didn’t have time to read the complaint.

How deep does this go? We offered the Puerto Rico Hacienda (Treasury Department) information about where to find the stolen billion dollars so they could pursue the $500,000,000 in unpaid taxes. They had no interest. Their political masters told them to bury it.

If you have additional information and would like to make a report, please call Hagen’s Berman at 708-628-4949 or by e-mail at

If you are a participant in these felonies and would like to report your participation before you are arrested, please contact Sue Curtin, senior counsel, SEC Boston Regional Office. Sue can be reached at (617) 573-8821.


For those in the PRESS, really try to make an effort to report the big stories!



Richard Lawless is CEO of Commercial Solar Power, Inc. in Temecula, CA.

The opinions expressed in the preceding article are exclusively his own

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