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From Antitrust Law Daily, February 6, 2018

Puerto Rico school bus company owners sentenced for rigging bids

By Jeffrey May, J.D.

Three of four school bus company owners convicted by a federal jury in Puerto Rico for participating in bid rigging and fraud conspiracies at an auction for public school bus transportation services in Puerto Rico’s Caguas municipality last year have been sentenced to prison time, the Department of Justice announcedtoday. The fourth defendant was sentenced to probation and home confinement due to a medical condition (U.S. v. Rivera-Herrera, Case 3:15-cr-00361-GAG).

A May 2015, seven-count felony indictment named five bus transportation company owners: Gavino Rivera-Herrera, Luciano Vega-Martinez, Alfonso Gonzales-Nevarez, Jose L. Arroyo-Quinones, and Rene Garay-Rodriguez. The government alleged that the individuals participated in bid rigging and fraud conspiracies at an auction for four-year, public school bus transportation contracts in Puerto Rico’s Caguas municipality in 2013. In addition to one count of conspiracy to rig bids and allocate the market for public school bus transportation services, the indictment also charged the defendants with one count of conspiracy to commit mail fraud and five counts of mail fraud. The defendants were charged with conspiring to defraud the Puerto Rico Department of Education and the Caguas municipality, among others, in order to fraudulently obtain contracts for school bus transportation services. Following a week-long trial, Rivera-HerreraVega-MartinezGonzalez-Nevarez, and Garay-Rodriguez were found guilty on all counts of the indictment in January 2017.

Today, Vega-Martinez, Gonzalez-Nevarez, and Garay-Rodriguez were each sentenced to serve 12 months and a day in prison. Defendant Rivera-Herrera was sentenced to a term of two years’ probation, the first six months to be served in home confinement, after a departure based on the defendant’s medical condition, according to the Justice Department. It is anticipated that restitution will be imposed in an amount to be decided at a later date.

"These transportation company owners lined their own pockets with public funds that were intended to provide essential services to at-risk school districts," said Makan Delrahim, Assistant Attorney General in charge of the Department of Justice Antitrust Division, in announcing the sentencing. "The sentences imposed today reflect the serious harm caused by the actions of the defendants who enriched themselves at the expense of schoolchildren and American taxpayers."

The case was highlighted as an example of corruption and anticompetitive conduct in the government procurement process by Roger Alford, Deputy Assistant Attorney General for International Affairs at the Antitrust Division. In remarks delivered in October 2017, Alford said that the "school bus companies colluded to raise the cost of children going to school."

Attorneys: Mark C. Grundvig for U.S. Department of Justice. Jason Gonzalez-Delgado (Gonzalez & Gonzalez Law Office) for Gavino Rivera-Herrera. Joseph C. Laws (Joseph C. Laws, PSC) for Luciano Vega-Martinez. Antonio L. Bisbal-Bultron (Law Office of Antonio L. Bisbal-Bultron) for Rene Garay-Rodriguez.

MainStory: TopStory Antitrust AntitrustDivisionNews PuertoRicoNews

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