10 July 2004 – LAWFUEL – Marcos Daniel Jiménez, United States Atto…

10 July 2004 – LAWFUEL – Marcos Daniel Jiménez, United States Attorney for the Southern District of Florida; Brian Wimpling, Special Agent in Charge of the Internal Revenue Service; and Amos Rojas, Jr., Special Agent in Charge of the Florida Department of Law Enforcement, announced today that a federal grand jury sitting in West Palm Beach, Florida, returned a Superseding Indictment charging defendant, Roberto Rego, Jr., for his participation in a more than $1.4 million bankruptcy fraud scheme. The Superseding Indictment charges Rego with one count of income tax evasion, two (2) counts of bankruptcy fraud, seven (7) counts of false statements in connection with bankruptcy proceedings, three (3) counts of monetary structuring, and four (4) counts of money laundering. Rego, according to the Superseding Indictment, concealed from the United States Bankruptcy Court (the “Bankruptcy Court”), the United States Trustee, and creditors, through various fraudulent activities, over $1.4 million worth of property belonging to companies that had filed for bankruptcy relief. The case is one of the largest bankruptcy fraud criminal prosecutions indicted in Palm Beach County.

Specifically, count 1 of the Superseding Indictment charges Rego with income tax evasion, in violation of Title 26, United States Code, Section 7201. Counts 2 through 10 of the Superseding Indictment charge Rego with bankruptcy fraud, in violation of Title 18, United States Code, Section 152. Counts 11 through 13 of the Superseding Indictment charge Rego with money structuring, in violation of Title 31, United States Code, Sections 5324(a)(3) and 5322(a). Counts 14 through 17 of the Superseding Indictment charge Rego with money laundering, in violation of Title 18, United States Code, Section 1956. If convicted on the income tax evasion count, Rego faces a maximum statutory sentence of five (5) years’ imprisonment and a $250,000 fine. If convicted on any of the bankruptcy fraud counts, Rego faces a maximum statutory sentence of five (5) years’ imprisonment and a $250,000 fine. If convicted on any of the money structuring counts, Rego faces a maximum statutory sentence of five (5) years’ imprisonment and a $250,000 fine. If convicted on any of the money laundering counts, Rego faces a maximum statutory sentence of five (5) years’ imprisonment and a $500,000 fine.

According to the Superseding Indictment, Rego was a principal in Cabrera and Rego, Enterprises, Inc. (“C&R”), a Palm Beach County-based company that specialized in aggregate hauling, and supervised the daily operations of the company. Rego also supervised the daily operations of E.M. Brandon, Inc. (“EMB”), a Palm Beach County-based company that specialized in lumber grinding. Allied Trucking, Inc., according to the Superseding Indictment, was a Miami-based hauling and trucking company that subcontracted work to C&R and EMB and whose subsidiaries, Allied Waste Hauling, L.C. and Allied trucking of Palm Beach, L.C. were managed by Rego on its behalf (hereinafter, collectively “Allied”). On September 22, 1998, C&R and EMB filed with the Bankruptcy Court petitions for relief under Chapter 11 of the Bankruptcy Code.

The Superseding Indictment charges Rego with fraudulently concealing from the Bankruptcy Court, the United States Trustee, and creditors of the companies, property of the C&R and EMB bankruptcy estates totaling more than $1.4 million. Rego is charged with concealing over $400,000 in property of the C&R bankruptcy estate, including monies paid by Allied to C&R for bills submitted for work not performed by fictitious companies created by Rego, monies paid by Allied to C&R for bills submitted for work not performed by C&R, monies received from various companies for work performed by C&R. Rego is charged also with concealing over $1 million of property of the EMB bankruptcy estate, including monies paid by Allied to EMB for bills submitted for work not performed by EMB and monies received from various companies for work performed by EMB.

In addition, Rego, as charged in the Superseding Indictment, evaded income taxes, laundered fraudulent proceeds, and structured withdrawals to avoid required currency reporting regulations.

On June 15, 2004, Ester M. Brandon, who along with Rego was named in an Information that preceded the Superseding Indictment, pleaded guilty to one count of income tax evasion, in violation of Title 26, United States Code, Section 7201, and is scheduled to be sentenced by United States District Judge Donald M. Middlebrooks in West Palm Beach, Florida, on September 9, 2004.

Mr. Jiménez commended the investigative efforts of the Internal Revenue Service and the Florida Department of Law Enforcement. The case is being prosecuted by Assistant United States Attorneys John S. Kastrenakes and Carolyn Bell.