Monday, May 21, 2018

The largest, longest running, government created, government protected, organized criminal enterprise in American history

By Richard Lawless
May 20, 2018

In the face of overwhelming evidence, the FBI was somehow able to clear itself!

This is a story about the largest, longest running, government created, government protected, organized criminal enterprise in American history and if it were not for the financial collapse of Puerto Rico no one would ever know.

When Puerto Rico started to experience financial difficulties in 2012, people started to ask questions.  The criminality of it all wasn’t fully clear until the island defaulted on its $70 billion dollars in municipal bonds, the largest default in American history.

This journey started for me simply enough.  I was asking myself how the largest government owned public utility in North American, The Puerto Rico Electric Power Authority (PREPA), could have a BBB+ credit rating one day and be bankrupt the next day. 

As I started to investigate PREPA, it became clear that the Utility has been billing its customers for high grade crude oil but purchasing the lowest grades of heavily polluting crude oil.  As the largest utility in North America that burns oil for electricity, PREPA spends about $3 billion dollars a year in oil purchases.

The lower quality oil is 54% cheaper then what PREPA has been billing their customers for.  54% of $3 billion dollars each year is unaccounted for and this has been going on for over a decade.   Some very simple math has you asking where the $15 billion dollars has gone

Well, we know the answers with great certainty.  The money has been laundered in countries like Venezuela and Honduras.  Wire transfers are then sent back to our favorite Politicians and Law Enforcement Personnel within the Department of Justice to make sure this can continue unabated.  

Believe it or not, this is only the tip of the iceberg in criminal activities that have been taking place in Puerto Rico for over a decade.

Further investigation shows that PREPA and most other Puerto Rico Municipalities have all been technically bankrupt since 2010.  PREPA and others however have been able to purchase fabricated credit ratings from Moody’s, Fitch and S&P Global, allowing them to float worthless municipal bonds to America’s senior citizens, the primary buyers of tax free bonds. 

When Puerto Rico defaulted on $70 billion dollars in bonds these senior citizens rushed to sell the bonds before they were completely worthless and lost $34 billion dollars.  The impact was felt across the Country, $3 billion in Florida, over $2 billion in New York and California etc.….

I could go on and talk about the missing billions in bond proceeds, fabricated equipment and maintenance expenses, all adding up to tens of billions of dollars. 

Over the past three to four years, dozens of Puerto Rico Politicians, Utility Customers, Municipal Employees, Government Vendors, Bond Holders and U.S. Intelligence Officals have logged complaints with the Department of Justice, more specially, with the FBI, including myself. 

Before I share the FBI’s, response let me share just some of the evidence that has been given to the FBI.

Out of a sense of frustration with the Department of Justice Inaction, a private RICO lawsuit was filed on 2-24-15.  If you are unfamiliar with RICO it stands for Racketeer Influenced and Corrupt Organizations Act.  It is a piece of legislation designed by the Government to break up Mafia (organized Crime) activities.  It is very rare that the courts will allow private individuals to use it, especially against the government. 

Case 3:15 – cv-01167-JAG Document 1 Filed 2-24-15 Page 1 of 80


The lawsuit spells out many of the participants in the oil fraud and how they did it.  The filed documents even include offshore bank account numbers used for the money laundering.   Many government Officals have challenged the lawsuit but it has repeatedly been upheld.