Saturday, September 24, 2016

Miami International Airport exec helps steal $5 million in light-bulb scam, prosecutors say

 Miami-Dade County Attorney General Kathy Fernandez-Rundle, center, discusses the charges against Ivan Valdes, a senior manager in the maintenance division at Miami International Airport, during a news conference Friday, Sept. 23, 2016. Valdes, pleaded not guilty to the charges, which allege he was part of a $5 million scam at the county-owned airport.

 A sceenshot of Ivan Valdes’ biography at the Miami International Airport’s website.

Miami International Airport put Ivan Valdes in charge of buying light bulbs, and that’s when prosecutors say the veteran manager had a bright idea: conspire with suppliers to skim about $5 million from the purchases.

On Friday, authorities detailed what they said was a five-year scam that saw Valdes steer nearly $9 million worth of high-tech bulb sales to a procurement loop populated by a vendor and distributor in on the scheme. Four men involved in the conspiracy kept $5 million from the sales, prosecutors said.

Valdes, who started out cutting grass at MIA but went on to run a 100-person maintenance division, regularly collected grocery bags full of kickback money in an airport parking lot, according to charging documents. And while he earned less than $100,000 at his county job, he owned a Porsche, rented sky boxes for concerts and wore hand-tailored Sartori Amici suits.

“He should have been seen as a classic American success story,” State Attorney Katherine Fernandez Rundle said of Valdes, who earned $98,000 a year as MIA’s director of terminal maintenance. “Then he got greedy.”

MIA, a county-owned airport with a budget of $1 billion, promoted Valdes in 2015 to division director in what prosecutors said would also be the final year of a scam that began in 2010. Court papers say Valdes, 46, confessed to his role in the scheme, plans to plead guilty in the bribery case and will serve between five and seven years in prison. His lawyer, Sandy Becher, declined to comment.

Corruption is enough of a worry at MIA that the county’s inspector general maintains a full-time staff in the facility. But Valdes was apparently able to thwart county oversight by conspiring with both a light-bulb seller and a supplier who manipulated wholesale prices to keep other vendors out of the procurement process.

“The problem is the procurement system that exists was completely subverted. Because you had somebody on the inside writing the specs of what’s needed. You had somebody on the outside providing the products,” said MIA Director Emilio Gonz├ílez, who started in 2013. “You had just the right people in just the right conditions to make this happen.”

Valdes oversaw 20 bulk bulb purchases over five years, and prosecutors said each contract went to a Miami company that was part of the scheme: Global Electrical & Lighting Supplies, owned by Rolando Perez.

Global Electric bought its bulbs from Municipal Lighting Systems, a local distributor for General Electric. Municipal Lighting’s Roy J. Bustillo was also charged in the scheme. Prosecutors said he gave inflated quotes to Global Electric competitors in order to keep honest vendors from winning the MIA contracts that Valdes supervised.

(Municipal Lighting said Bustillo was fired last year, but declined to comment beyond a statement saying it had cooperated with investigators.)

In all, MIA purchased about 9,000 LED bulbs through Global Electric, lights used to illuminate the pick-up and drop-off areas outside the terminals and parking garages. The airport paid $8.8 million for LED lights. They were worth only about $3.5 million, leaving roughly $5 million as profit for the men behind the scam.

Federal prosecutors filed conspiracy charges against Valdes, Bustillo, 37, and Perez, 57, along with Jose Barroso, a former MIA executive alleged to have helped Valdes arrange the scheme back in 2010, three years after retiring from the county. Charging documents describe Valdes summoning Barroso, 51, back to the airport that year for a meeting about MIA’s interest in replacing thousands of bulbs outside. Barroso said Valdes brought up a new lighting contract, and asked: “What’s in it for me?”

Barroso served as the middle man in the transactions, according to prosecutors, delivering as much as $50,000 cash in grocery bags to Valdes, who would take a break from work to meet him in an airport parking lot.

After five years, prosecutors said, Valdes had collected about $1 million in the scheme to fund an extravagant lifestyle for him and his unemployed wife: sky boxes at Miami’s AmericanAirlines Arena, Christian Louboutin shoes, and a $69,000 Porsche 911 Carrera bought in 2013.

While the airport does not use tax dollars to subsidize operations, its steady stream of high-dollar contracts has made it a font of clients for lobbyists and a subject of intense attention from the county’s elected officials who oversee it.

At the press conference, U.S. Attorney Wifredo Ferrer said the scam laid out in charging documents did not just cost taxpayers money in inflated bills.

“With all the scheming and the lies, the day-to-day vendors had no chance of getting these contracts,” he said. “They deprived honest vendors and contractors from participating.”

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