Two cousins of Puerto Rico’s Gov. Pedro Pierluisi pleaded guilty Thursday for embezzling an estimated $3.7 million in federal funds earmarked for the management of public housing on the island.
Walter Pierluisi, 58, and Eduardo Pierluisi, 52, entered their pleas on charges of federal funds theft before Judge Camille Vélez in federal court in San Juan. A third co-defendant, David Vélez, was expected to plead guilty later.
Gov. Pierluisi told reporters at a separate event that the guilty pleas showed that there was no impunity on the island. Both of his cousins had been closely involved in Pierluisi’s 2020 gubernatorial election campaign.
“If you fail the people, if you commit an act of corruption you will have to respond. In this case we are talking about family members, two cousins, who failed my family, failed the country and now must face severe penalties,” Pierluisi said.
The governor rejected the idea that the convictions had tarnished his mandate, but said that going forward he would keep any family members out of his political campaigns.
The case against the governor’s cousins stemmed from an FBI raid on offices of American Management & Administration, or AMAC, which had been awarded $73 million in contracts since it was incorporated by Walter Pierluisi in 1995 to administer public housing complexes in Puerto Rico. Eduardo Pierluisi and Vélez were employees of the company.
“The defendants and their company harmed the integrity of a program designed to help underprivileged homeowners,” W. Stephen Muldrow, U.S. Attorney for the District of Puerto Rico said in a news release, adding that prosecutors in such cases would ”work tirelessly to pursue justice.”
The money embezzled by Pierluisi brothers will have to be returned to the government as part of the plea agreement. The deal calls for a 37-month jail sentence for Walter Pierluisi and a 30-to-37 month sentence for Eduardo Pieorluisi, who can request a more lenient sentence of 24 months, citing health issues.
Osvaldo Carlo, an attorney for Walter Pierluisi, said that none of the embezzled money had been used for political purposes, nor that prosecutors were alleging that.
AMAC administered more than 5,000 units of public housing in 12 municipalities in the northwest of the island, according to prosecutors.
