Tricks of Mayagüez with mortgages of public properties return to the Federal Court – NotiCel – The truth as it is – Puerto Rico News – NOTICEL

The mayor of Mayagüez, José Guillermo Rodríguez.

Photo: Juan R. Costa / NotiCel

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The mortgage promissory note made by the Mayagüez Economic Development Inc. (MEDI) municipal corporation committing the San Antonio Hospital of that city reached the United States Court for the District of Puerto Rico in a lawsuit requesting the sale by auction of the property to pay the debt.

MEDI and the transactions in which it was involved have produced a host of legal claims, including a federal criminal case of fraud in the handling of a $ 9 million investment. The municipality of Mayagüez created the entity in 2014 for all types of business. The mayor, José Guillermo Rodríguez, is also president of the Board of Directors of MEDI, populated entirely by municipal officials. The official authorized the transfer of dozens of municipal public properties to MEDI worth $ 300 million to be used as collateral in different types of businesses. The list included even the mayor’s office and the Palacio de los Deportes.

It is the second time that the federal court has evaluated creditor claims on the hospital, which has operated as a public institution since 1865, and it is the second time that this same promissory note has gone to court. The promissory note is at least the second MEDI business committed to the hospital.

Initially, the firm PMJ Capital PR Corp. appealed to the Court of First Instance in November 2019 stating that the promissory note of $ 1.2 million was past due and that, by virtue of the same terms that MEDI was bound to, a summary judgment was proceeding in favor of the note holder ordering the foreclosure. That is, to sell the hospital to pay the debt.

In July 2020, the municipality appeared in the case to say that they learned from the same lawsuit that MEDI had done the legal business and that there is no authorization from the municipality to do business with the hospital, so MEDI did not have the authority to mortgage the hospital. In August 2020, the court ruled that the claim could not be considered in the fast track, as proposed by PMJ because MEDI had accepted that it be resolved in this way, and that the case would become an ordinary one that, at this time, is still pending. of final solution.

But last Tuesday the firm RJ Alan Company, Inc., of New York, filed a lawsuit in federal court stating that it is the new holder of the mortgage note that PMJ previously had and claiming the same thing, that the note is past due and that the Judge Jay A. García Gregory must order the foreclosure of the property to satisfy a debt that they assure adds up to almost $ 1.4 million and increases $ 400 daily in interest.

The new holder of the promissory note is represented by the same PMJ law firm, that of the former Secretary of Justice, Luis Sánchez Betances. Two of the people involved in the transaction on the MEDI side, the entity’s executive director, Alejandro Riera Fernández, and the notary Arnaldo J. Irizarry Irizarry, who was also a legal consultant for the municipality, are on the list of criminal defendants for commit fraud with $ 9 million assigned to the Mayagüez Trauma Hospital that the mayor decided to transfer to MEDI to invest in the stock market. According to the statement, the defendants did not use the money to invest but to distribute it among themselves.

Mayor Rodríguez has denied knowledge of or involvement with these transactions and the city is filing a civil lawsuit against the same federal defendants to recover the money. The city has also appeared in other cases of MEDI transactions to say that they had not authorized MEDI to carry them out and should therefore be considered void, despite the fact that there are corporations and private individuals who, in effect, gave money to MEDI as part of transactions.

NotiCel published in March of this year that MEDI had already been sued in federal court for a failed transaction in which, with the lawyer José Alfredo Hernández Mayoral involved, the municipal corporation offered the hospital as a guarantee for financing through which they would purchase electric generators for the same hospital. That case was resolved without the property being executed, but without the municipality alleging ignorance either.

Riera Fernández, through MEDI, carried out the two legal transactions with the hospital at the same time: on the one hand, it mortgaged it for the generators and, on the other, it mortgaged it for the PMJ promissory note.

To view the federal lawsuit, click here.