Santos’ 2 companies opened in sync with alleged scheme

Tax records show the opening of two businesses owned by Commerce Secretary James Santos and his wife coincided closely with the timeline of what federal authorities say was a scheme to defraud the Commonwealth Utilities Corp.

The indictment says Lt. Gov. Timothy Villagomez, then CUC’s director, and James Santos initiated a plan in February 1998 for CUC to purchase thousands of gallons of Rydlyme, a de-scaling agent, through a company Santos controlled—a deal that circumvented procurement regulations and violated conflict of interest statutes.

Most of the more than 8,000 gallons of Rydlyme sold under the plan were never used and never needed, the indictment adds.

Yet at the time federal authorities say Villagomez and Santos concocted the deal, tax records uncovered Wednesday show that the company that later filled the Rydlyme orders—Santos’ ISLA Sales Micronesia—was nonexistent.

Santos opened ISLA Sales Micronesia in April 1998, roughly two months after authorities say he and Villagomez began the scheme, records show, and ISLA’s business license expired in April 2006. Department of Finance staff found no business license records for the company before April 1998.

The opening of the company later responsible for filling the Rydlyme orders under a sole source CUC contract in 2007, Joaquina Santos’ Blue Pacific, bears a similar correlation to the indictment. Villagomez sought to revive the sales scheme in August of that year, the indictment notes, and pressured CUC staff to approve the deal.

Joaquina Santos obtained Blue Pacific’s first business license, tax records show, on Aug. 23, 2007. Again, Finance staff found no license information prior to that date.

The Rydlyme sales netted the Santos’ $280,000 from 1998 to 2000 and $120,000 in 2007, the indictment states.

Moreover, the tax records note one of the locations for ISLA Sales Micronesia is a site designated as “45299 Retail General Merchandise” in As Lito. This is the same spot, according to the records, as the site for Blue Pacific. The business license for Blue Pacific will expire Aug. 23.

The Santos couple and Villagomez pleaded not guilty in a federal court to three felony counts of wire fraud, conspiracy and theft involving federal funds over the sales after authorities unsealed an indictment against them on Monday.

Former CUC executive director Anthony Guerrero, included in the indictment, has pleaded guilty to conspiracy after inking a plea agreement with prosecutors and might testify when the case comes before a jury in October.