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UFECIC-MP/MACCIH-OAS Team Presents 7th Case of Integrated Criminal Investigation “Fraudulent Social Security Bidding”

The Public Prosecutor’s Office of Honduras today filed today before the Juzgado de Letras of the Anticorruption Circuit a fiscal injunction against 12 citizens for alleged crimes of fraud, abuse of authority and violation of the duties of officials to the detriment of the State, as a result of an investigation carried out by the Integrated Criminal Investigation and Prosecution Team, made up of prosecutors and investigators of the Special Prosecutor’s Unit against Corruption and Impunity of the Public Prosecutor’s Office (UFECIC-MP) with the support of experts from the Mission to Support the Fight against Corruption and Impunity in Honduras of the Organization of American States (MACCIH-OAS).

With this case, the Prosecutor’s Office presents evidence to prove that the defendants tendered and bought unnecessary equipment on behalf of the IHSS (much of which remains unused in warehouses); acquired expensive equipment that, at the time of contracting, the IHSS was not capable of disbursing; carried out a bidding process to favor the company DIMESA S.A.; acquired medical equipment at 114% of market value; and acquired contracts that oblige the IHSS to pay monthly maintenance for said equipment, although much of the equipment lies unused in warehouses.

The Spokesperson of the MACCIH-OAS and Representative of the OAS Secretary General, Luiz Guimarães Marrey, said “the meticulous and highly professional work of the UFECIC with the support of the MACCIH is producing more and more results in the fight against corruption, from wherever it comes, in strict compliance with the mandate conferred on us by the Agreement signed on January 19, 2016 between the Government of the Republic of Honduras and the OAS General Secretariat. We will keep working.”

The case "Fraudulent Bidding of Social Security" is the seventh case of integrated criminal investigation presented by the team formed by MACCIH-OAS and UFECIC-MP. The previous cases were "Network of Deputies," "Petty Cash of the Lady," "Impunity Pact," "Pandora," "Asset Insurance" and "Petty Cash of the Brother."

THE INVESTIGATION

The fiscal injunction has been filed:

• Against CARLOS MONTES RODRIGUEZ, JAVIER RODOLFO PASTOR VASQUEZ, LEONARDO VILLEDA BERMUDEZ, SAMUEL BENJAMIN BOGRAN FUENTES, FABRICIO VALENTÍN VÁSQUEZ SOSA, OSCAR MANUEL GALEANO FLORENTINO, JOSE HILARIO ESPINOZA HERRERA, ARMANDO VILLATORO, LUIS ALONZO MAYORGA GALVEZ, JOSE HUMBERTO LARA ENAMORADO, JOSE MANUEL ESPINAL RODRIGUEZ y ARMANDO VILLATORO, for the alleged crime of FRAUD, to the detriment of the PUBLIC ADMINISTRATION.
• Against CARLOS MONTES RODRIGUEZ, OSCAR MANUEL GALEANO FLORENTINO, HILARIO ESPINOZA HERRERA, ARMANDO VILLATORO HERRERA, SAMUEL BENJAMIN BOGRAN, FABRICIO VALENTIN VASQUEZ, OSCAR ARNALDO CARRANZA, for the alleged crime of ABUSE OF AUTHORITY, to the detriment of the PUBLIC ADMINISTRATION.
• Against CARLOS MONTES RODRIGUEZ, LEONARDO VILLEDA BERMUDEZ, SAMUEL BENJAMIN BOGRAN FUENTES, OSCAR MANUEL GALEANO FLORENTINO, JOSE HILARIO ESPINOZA HERRERA, LUIS ALONZO MAYORGA GALVEZ, JOSE HUMBERTO LARA ENAMORADO y JOSE MANUEL ESPINAL RODRIGUEZ, for the alleged crime of VIOLATION OF THE DUTIES OF OFFICIALS, to the detriment of the PUBLIC ADMINISTRATION.

This case is derived from the criminal process known as DIMESA, which was transferred to UFECIC at the proposal of the MACCIH, to be investigated under the modality of integrated criminal investigation, verifying the following facts:

• On April 4, 2011, the Board of Directors of the Honduran Institute of Social Security, made up of the now accused, in the ordinary session N ° 015-2011, discussed and approved the agenda item concerning the international public tender No. 05 -2010: Acquisition, repair and maintenance of medical equipment of the specialty hospitals of Tegucigalpa and the North-Western region of San Pedro Sula, of the Honduran Institute of Social Security.
• When approving the minutes, they awarded Contract No. 020-2011 for the acquisition, repair and maintenance of medical equipment from Tegucigalpa and North-Western regional hospitals in San Pedro Sula, from the Honduran Institute of Social Security, to Distribuidora Metropolitan SA DE C.V (DIMESA) for an amount of US $ 95,244,166.54 (Ninety-five million, two hundred forty-four thousand, one hundred and sixty-six US Dollars, with 54 cents). The Contract was ratified on Tuesday, April 26, 2011, at the session of the Board of Directors of the Honduran Social Security Institute No. 016-2011, composed of those now accused.
• However, during the investigation, the integrated team established that this contract should never have been approved, because of the following:
  • There was no study to establish the equipment to be acquired according to the needs of the Institution;
  • There was not a design that allowed for the delivery of purchased equipment;
  • At that time, the Honduran Social Security Institute did not have budget availability for an acquisition of this nature.
  • This acquisition was made without respecting the amount established in Resolution 02-08-09-2010 where the bidding rules were approved, estimated as the cost of the project 50 million US dollars.
  • The equipment was acquired with an overvaluation above 114% of market price.
• This contract was made without a real study of the repercussion of the modernization project of the biomedical equipment in both the infrastructure, attention shifts and adjustments in the economic part; therefore, its financing was made through funds from the Disability, Old Age and Death Regime to the Sickness and Maternity Regime, approved by resolution No. SEJD-01-24-05-2011 for SIX HUNDRED MILLION LEMPIRAS
• The budgetary shortfall was previously known by the Board of Directors, since on October 26, 2010 was published in the official gazette La Gaceta, Agreement No. 002-JD-2010 in which it was agreed, among other points: "First: Declare the state or emergency budget situation in the Sickness-Maternity Regime in the IHSS, due to the budget deficit for 2010 and the lack of approval of the actual budget for the year 2011 ... Second: Authorize the administration of the IHSS so that it may proceed to suspend the bidding processes that have been programmed in this regime in accordance with the current fiscal year, given that they cannot be carried out with a deficit budget base and pending approval, with an agreement of six months."
• Despite this budget crisis, the defendants began the bidding during the period from October 18 to November 23, 2010, contravening the legal provision approved by them.
• On June 13, 2012, the Board of Directors of the Honduran Institute of Social Security, in the ordinary session number 22-2012, approved the extension and modification of the Contract 020-2011, between the IHSS and the Distribuidora Metropolitana S.A. DE CV (DIMESA), for an amount of Twenty Three Million Six Hundred Sixty Eight Thousand Seven Hundred Sixty One Dollars With 80 cents ($ 23,668,761.80) representing 24.8506% of the original contract amount for $ 95,244,166.54, to complement the acquisition of biomedical equipment that was not included in the initial equipment contract, resolution that was of immediate execution; making a total of the acquisition of $ 118,912,928.34. Addendum I subscribed on July 10, 2012 that is one year and two months after the contract 020-2011 was signed; acquiring biomedical equipment with an overvaluation of 114% of the market costs.
• Once the contract was awarded, the company DIMESA S.A. subcontracted to other companies to carry out the supply, installation and preventive and corrective maintenance awarded.

The subcontracting companies were: Hospitec, MDP, Seijiro Yazawa Iwai, MF Medical, IMLAB, TECMA and Distribuidora de Equipo Médico (MDP). It should be noted that these companies acquired the bases of the controversial Tender 005-2010.

• To guarantee the payment plan to DIMESA, the trust funds N ° 075-2011 and 043-2012, administered by the Central Bank of Honduras, were constituted for the Addendum I to contract 020-2011, generating disbursements for the payment of the trust. , including commission of Administration of the Trust itself, for the amount of US $ 51,050,873.24 and US $ 9,136,142.16, payable in Lempiras equivalent to L 1,242,991,426.04.
• In the present investigation, the following indications of the crime of fraud were found:
  • There was no real need on the part of the IHSS to purchase such equipment (In fact, many of these equipment are still in warehouses without being used)
  • At the time of contracting, the IHSS did not have the financial capacity to sign a contract of such characteristics, due to the amounts established therein;
  • There are clear indications that the entire bidding process was constituted to favor a specific company, in this case DIMESA S.A .;
  • Medical equipment was acquired at 114% of the market value.
  • Despite the fact that several medical equipment purchased, are still in warehouses without being used, the IHSS has been paying monthly, for maintenance of such equipment.

All of the above shows inadequate administration of the IHSS funds by the members of the Board of Directors that authorized the signing of said contracts at the time, which makes them responsible for the crimes for which the requirement has been presented today.

This joint action demonstrates once again the commitment of the MACCIH-OAS to continue promoting the fight against corruption through State institutions, in strict compliance with the mandate conferred on us by the Agreement signed on January 19, 2016, between the Government of the Republic of Honduras and the General Secretariat of the OAS.

Reference: E-076/18