Puerto Rico Governor’s Cousins, Campaign Managers Plead Guilty of Embezzlement

Photo posted to social media by Eduardo Pierluisi, center (via CPI)

SAN JUAN — Two cousins of Puerto Rico Gov. Pedro Pierluisi pleaded guilty to embezzling nearly $4 million in federal funds meant for public housing.

Brothers Walter Pierluisi Isern and Eduardo Pierluisi Isern pleaded guilty to embezzlement charges in federal court in San Juan Thursday morning.

Federal authorities raided the offices of American Management & Administration (AMAC) and the Pierluisi Isern Law Offices in San Juan in late 2022. AMAC, owned and presided over by Walter Pierluisi, had been awarded more than $73 million in government contracts from the Department of Housing and Urban Development (HUD) to manage 5,017 public housing units in 12 municipalities. But the illegal conduct only began in 2014, according to the prosecution.

Walter Pierluisi profited $2 million, while Eduardo, an employee of AMAC, nearly $400,000. A third defendant, David Vélez Hernández, the finance director for AMAC who will declare himself guilty at a later date, profited nearly $900,000. The Pierluisi brothers will have to return the embezzled money as part of their plea deal.

“Today demonstrated that there’s no impunity in Puerto Rico, no matter who it is. If they fail the people, if they commit an act of corruption, we will have to respond,” Gov. Pierluisi claimed at a separate event.

The Pierluisi brothers were closely involved in Pierluisi’s 2020 campaign. Walter worked as his political director while Eduardo worked as the advanced director.

Walter will serve a 37-month jail sentence and Eduardo a 30-to-37-month sentence that can be downgraded to 24 months, citing health issues.

Pierluisi claimed their arrest “tarnished my last name” and that he will keep family out of his campaigns in the future. He also claimed the case would not have major consequences for the Department of Housing or his political career.

“The defendants and their company harmed the integrity of a program designed to help underprivileged homeowners. Today’s plea agreement sends a clear message that any time U.S. dollars are misused and regardless of who steals taxpayer money, we will work tirelessly to pursue justice,” W. Stephen Muldrow, United States Attorney for the District of Puerto Rico, said in a press release.

None of the embezzled money had been used for political reasons, said Osvaldo Carlo, attorney for Walter Pierluisi.

“HUD programs are vital to the well-being of many low-income families in our communities and provide critical resources for those who need them the most,” said Jerome Winkle, acting special agent in charge of the Office of Inspector General at HUD.

The Pierluisi brothers’ arrest and plea deal come as part of a series of arrests for corruption carried out on the archipelago by the Federal Bureau of Investigations since 2019,  involving several prominent politicians, including former Gov. Wanda Vázquez.

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Carlos Edill Berríos Polanco is the Caribbean correspondent for Latino Rebels, based in San Juan, Puerto Rico. Twitter: @Vaquero2XL