Mayor Victor Ortiz-Díaz Arrested in $125K Bribery Scheme

Gurabo Mayor Victor M. Ortiz-Díaz, a.k.a. “Manolito,” was taken into federal custody today on charges of extortion and soliciting a bribe, marking the latest fall from grace in Puerto Rico’s long line of corrupt officials. Arrested by FBI agents early this morning, Ortiz-Díaz now faces a storm of federal charges tied to a $125,000 payoff extracted under the guise of a business investment.

According to a federal indictment, in October 2012, Company A was owed money by the Municipality of Gurabo for completed work on eight outstanding invoices. When co-owner Person A met with Ortiz-Díaz to discuss payment, the mayor didn’t offer relief—he demanded $125,000 to invest in a telecommunications antennas project. Unable to produce the cash, Person A was told the municipality would issue a payment to the company so it could cover the so-called ‘loan’ to Ortiz-Díaz and settle debts with suppliers.

On October 19, 2012, Person A issued three post-dated checks from Company A—totaling $125,000—payable to employees of Miguel Merced, the mastermind behind the telecom investment scheme. That same day, the Municipality of Gurabo cut two checks worth $196,643.26 to Company A for contracted work. The timing was no coincidence: it was a corrupt pipeline funneling public funds into a private, illegal investment.

What Ortiz-Díaz didn’t disclose was that Merced was running a Ponzi scheme—and the mayor’s $125,000 ‘investment’ came straight from extorted funds. Merced is now serving a six-year federal prison sentence. The fallout from the scam left dozens of investors, including the citizens of Gurabo, holding the bag for Ortiz-Díaz’s greed.

“Defendant Ortiz-Díaz extorted Person A, to invest in a Ponzi scheme, which resulted in losses to many victims,” said U.S. Attorney Rosa Emilia Rodríguez-Vélez. “Although he presented himself as a victim in federal court, it was the citizens of Gurabo who were the victims of his corrupt acts, as it was their money he squandered.”

“It is always a sad day when someone who enjoys the trust of the people abuses that trust,” said FBI Special Agent in Charge Douglas Leff. “It should be clear by now that those officials who have served the public dishonestly will eventually have justice delivered to their doorstep.” The case was investigated by the FBI and HUD’s Office of Inspector General, and is being prosecuted by Assistant U.S. Attorney Olga B. Castellón-Miranda. Ortiz-Díaz faces up to 20 years in prison and $250,000 in fines if convicted. An indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent unless and until proven guilty.