LawFuel.com – 31 July, 2009 – LEV L. DASSIN, Acting United States Attorney for the Southern District of New York, and ROSE GILL HEARN, the
Commissioner of the New York City Department of Investigation
(“DOI”), announced today that RICHARD IZQUIERDO ARROYO and
MARGARITA VILLEGAS have been indicted in connection with a scheme
to embezzle funds from SBCC Management Corp., a not-for-profit
organization that provides management services to residential
buildings for low-income tenants.
According to the Indictment filed today in Manhattan
SBCC Management Corp. provides management services to
two residential buildings: the Judge Gilbert Ramirez Building, at
455 East 138th Street, Bronx, New York, and the Carmen Parsons
Building, at 441 East 155th Street, Bronx, New York. The two
buildings are funded in part by New York State Section 8 Housing
Assistance Payment subsidies — monies provided to New York State
by the United States Department of Housing and Urban Development.
IZQUIERDO ARROYO has been the president of SBCC Management Corp.
since at least 2005 and has also served on the board of directors
for the buildings since 1998. VILLEGAS has been the executive
director of SBCC Management Corp. since December 2001.
From at least May 2005 to February 2009, IZQUIERDO
ARROYO and VILLEGAS were subaccount holders of an SBCC Management
Corp. American Express Business Platinum Account. During that
time, IZQUIERDO ARROYO and VILLEGAS charged approximately
$180,000 or more of personal expenses to the American Express
account, including thousands of dollars’ worth of clothing, shoes
and accessories; meals at restaurants; hotels, airfare and other
travel-related fees; rental cars, car leases, parking tickets,
gas and tolls; photographs and film processing; florists; and
miscellaneous items such as groceries, books, music, electronics,
furniture and housewares. Between May 2005 and February 2009,
IZQUIERDO only reimbursed SBCC Management Corp. for approximately
$4,000 of the charges, and VILLEGAS only reimbursed SBCC
Management Corp. for approximately $2,300 of the charges.
Between at least June 2006 and August 2008, IZQUIERDO
ARROYO and VILLEGAS also misused approximately $20,000 in SBCC
Management Corp. and building funds by, among other things,
making contributions to the campaign accounts of a New York State
Assembly Member; paying for flooring installed at the Assembly
Member’s office; paying for airline tickets to Puerto Rico for
the Assembly Member as well as for a New York City Council Member
and IZQUIERDO ARROYO himself; and paying thousands of dollars in
stipends for summer interns to work for the Assembly Member, the
Council Member, and a political club controlled by the Assembly
Member. IZQUIERDO ARROYO is the grandson of the Assembly Member,
is the nephew of the Council Member, has served as Chief of Staff
for the Assembly Member, and has served as the treasurer for bank
accounts established in support of the Council Member’s campaigns
for elected office. VILLEGAS is a friend of the Council Member
and knows the Assembly Member.
Between April 2006 and August 2008, VILLEGAS embezzled
at least $26,000 from the buildings through the use of doctored
invoices and/or receipts. On at least 20 occasions, VILLEGAS
submitted claims for reimbursement for expenses related to the
Buildings that she purported to have charged to her personal
credit card. In submitting claims for reimbursement, VILLEGAS
submitted invoices and/or receipts that had been doctored to make
it appear as though she had incurred expenses larger than the
ones she actually charged to her credit card. In some instances,
VILLEGAS never charged the expenses to her personal credit card
at all. IZQUIERDO ARROYO then signed checks from the Buildings
reimbursing VILLEGAS for the fictitious or overinflated expenses.
The Indictment charges IZQUIERDO ARROYO, 33, and
VILLEGAS, 53, both of Bronx, NY, each with one count of
conspiracy to embezzle federal funds; embezzlement of federal
funds; mail fraud conspiracy; and mail fraud. Each defendant
faces a maximum sentence of 20 years on the embezzlement
conspiracy and embezzlement charges; five years on the mail fraud
conspiracy charge; and 10 years on the mail fraud charge.
The case has been assigned to United States District Judge ALVIN K. HELLERSTEIN.Mr. DASSIN praised the investigative work of DOI, and
thanked the U.S. Department of Housing and Urban Development,
Office of the Inspector General, for its assistance.
This prosecution is being handled by the Office’s
Public Corruption Unit. Assistant United States Attorneys RUA M.
KELLY and MICHAEL S. BOSWORTH are in charge of the prosecution.
The charges contained in the Indictment are merely
accusations and the defendants are presumed innocent unless and
until proven guilty.