Two Business Owners Pleaded Guilty to Federal Program Theft in Relation to the Misappropriation of Operational Funds from the United States Department of Housing and Urban Development (HUD)

SAN JUAN, Puerto Rico –Martin D. Cruz-Vázquez, President of FiveStar Pest Control Inc. (FiveStar), and Luis O. Agosto-Meléndez, President of CoolBreeze Air Conditioning, Inc. (CoolBreeze) pleaded guilty to the theft of federal program funds provided by the United States Department of Housing and Urban Development (HUD) for the administration of Public Housing Projects (PHPs) in Puerto Rico.

According to court documents, Martin D. Cruz-Vázquez utilized FiveStar to obtain fraudulent contracts with American Management and Administration Corporation (AMAC) and to submit fraudulent invoices for work that was not rendered. From 2014 to August 2022, Martin D. Cruz-Vázquez illegally obtained approximately $363,937 in HUD operational funds that were earmarked for the administration of PHPs.

Similarly, from 2014 to August 2019, Luis O. Agosto-Meléndez utilized CoolBreeze to obtain fraudulent contracts with AMAC causing the theft of approximately $73,199.46 in HUD operational funds.

Both schemes were carried out with the assistance of AMAC’s management, including president Walter Pierluisi-Isern, who were convicted in 2023 for related federal program theft in excess of $3.7 million. See https://www.justice.gov/usao-pr/pr/walter-pierluisi-isern-eduardo-pierluisi-isern-and-american-management-and.

“The U.S. Department of Justice will continue to prosecute those who attempt to defraud government programs,” said W. Stephen Muldrow, United States Attorney for the District of Puerto Rico. “These plea agreements send a clear message to those who misuse government funds that they will be held accountable for their crimes.”

“The guilty pleas relating to theft of funds from a HUD program meant to benefit low-income families is a signal that repercussions await all those that would seek to illegally obtain taxpayer dollars through fraudulent schemes,” said HUD OIG Southeast Region Special Agent-in-Charge, Jerome Winkle. “HUD OIG remains committed to working with our prosecutorial and law enforcement partners to protect the integrity of HUD’s programs and ensure vulnerable people in our communities are provided critical resources upon which they can rely.”

The defendants Luis O. Agosto-Melendez and Martin D. Cruz-Vazquez are scheduled to be sentenced on April 12, 2024 and April 30, 2024, respectively, and face a maximum sentence 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.

The United States Department of Housing and Urban Development Office of Inspector General investigated this case with the assistance of the Federal Bureau of Investigation. 

Assistant U.S. Attorney Marie Christine Amy is prosecuting the case.

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