Puerto Rico Man Indicted and Arrested for Bankruptcy Fraud, PPP Loan Fraud, Bank Fraud and Aggravated Identity Theft

SAN JUAN, Puerto Rico – On July 31, 2024, a federal grand jury in the District of Puerto Rico returned an indictment charging Richard Ramos-Hernández, from Humacao, Puerto Rico, with bankruptcy fraud and false statement under penalty of perjury in a bankruptcy case, false statement on loan and credit applications, bank fraud, and aggravated identity theft, announced W. Stephen Muldrow, U.S. Attorney for the District of Puerto Rico.

According to court documents, from January 4, 2019, through May 20, 2024, defendant Richard Ramos-Hernández devised and executed a scheme to defraud creditors in a bankruptcy proceeding in the District of Puerto Rico by means of materially false and fraudulent representations, all in violation of Title 18, United States Code, Sections 152 and 157.

On January 4, 2019, Richard Ramos-Hernández filed and caused the filing of a voluntary petition for relief under Chapter 13 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Puerto Rico, in the proceeding titled In re: RICHARD RAMOS HERNANDEZ, Case No. 19-00021(ESL).

The indictment alleges that during the bankruptcy proceedings, Ramos-Hernández concealed property and income and failed to disclose to the trustee charged with control of the debtor’s property and from the creditors and the United States the creation, operation, ownership, and control of All Market and Bakery LLC and Smart Energy General Contractors LLC.

All Market and Bakery LLC was a limited liability company registered on February 11, 2015, with the Puerto Rico Department of State and operated as an establishment in the Municipality of Humacao that produced and sold baked goods, food, beverages, and convenience related products.

Smart Energy General Contractors LLC was a limited liability company registered on June 12, 2018, with the Puerto Rico Department of State, that performed and provided construction related services to private and government clients. The defendant failed to disclose income received from Smart Energy General Contractors LLC, which had been awarded contracts with the municipalities of Canóvanas and Ceiba exceeding $800,000.

Additionally, Ramos-Hernández is charged with making false statements in relation to a $15,000 Paycheck Protection Program (PPP) loan in violation of Title 18, United States Code, Section 1014. On April 30, 2020, Ramos-Hernández, on behalf of All Market and Bakery LLC, submitted a PPP loan application through a third party, which was approved and disbursed by May 11, 2020. The defendant knowingly used, without lawful authority, the name, address, and signature of a person with initials M.M.T. to submit the application for the PPP loan, therefore engaging in bank fraud and aggravated identity theft in violation of Title 18, United States Code, Sections 1028A and 1344.

If convicted, Ramos-Hernández may be sentenced to a maximum term of imprisonment of five years for each count under 18 U.S.C §§157 and 152 (Bankruptcy Fraud) and a fine of $250,000; a maximum term of imprisonment of 30 years and a fine of $1,000,000 for violations of 18 U.S.C. §§ 1014 and 1344 (Bank Fraud); up to 30 years for false statement on loan and credit applications; and a mandatory consecutive sentence of two years of imprisonment for each aggravated identity theft count.

“The defendant used bankruptcy proceedings to defraud the United States Trustee Program and creditors to illegally benefit himself,” said U.S. Attorney Muldrow. “The U.S. Attorney’s Office remains vigilant in investigating bankruptcy-related fraud and appreciate the excellent work of the Office of the United States Trustee.”

“Together with U.S. Attorney Muldrow and our law enforcement partners, we will continue to pursue fraud and abuse in bankruptcy cases,” said U.S. Trustee Mary Ida Townson for Georgia, Florida, Puerto Rico and Virgin Islands (Region 21).  “I am thankful for the appointment by the U.S. Attorney of two Special Assistant U.S. Attorneys from our San Juan office that will allow us to prosecute all those who engage in fraudulent conduct.” 

The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws.

“Maintaining integrity in bankruptcy proceedings and ensuring eligibility for government benefits are essential to upholding the law and promoting fairness in our society,” stated Joseph González, Special Agent in Charge of the FBI San Juan Field Office. “It is crucial that individuals are truthful in these matters to maintain the integrity of the system and ensure that resources go where they are truly needed. We ask that anyone with information on bankruptcy -or any other fraud scheme- report it by leaving a tip online through tips.fbi.gov or calling 787-987-6500. Here in the FBI we are committed to bringing consequences upon those who insist on mocking our system.”

This case is being prosecuted by Special Assistant U.S. Attorney José Capó Iriarte and Special Assistant U.S. Attorney José C. Díaz Vega from the Office of the U.S. Trustee. 

The case was investigated by the Federal Bureau of Investigation (FBI).

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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