The prosecution and the defense presented their closing arguments yesterday before 12 jurors and three alternates following a 17-day jury trial.
Huge mark-ups
Assistant U.S. Attorney Eric S. O’Malley said that elements of cheating and dishonesty existed and the transactions started with a lie.
The orders for Rydlyme did not come from the end users or mechanics but from Villagomez.
He said testimony of the witnesses point out that Villagomez pushed for the transaction of the 3,000 gallons of Rydlyme, way more than the 10 drums or 550 gallons as what Commonwealth Utilities Corp. trade specialist David S. Cabrera said was needed.
O’Malley said Villagomez’s brother-in-law James Santos, owner of Blue Pacific, already knew how much Rydlyme CUC would buy even before CUC itself knew.
This, he said was shown by a letter where James Santos wired Apex Engineering $30,676 for 3,000 gallons of Rydlyme.
“CUC had not agreed to anything yet, but James Santos already placed the order for Rydlyme,” O’Malley said.
He noted the huge mark-ups James Santos made on five transactions of Rydlyme in 2007.
O’Malley said James Santos made a total of about $565,000 in profits from a mark-up starting from 350 percent and up.
In Aug. 2001, Cabrera underwent training for Rydlyme use in Chicago, Illinois, a training whose expenses would have been picked up by Rydlyme manufacturer Apex Engineering, O’Malley added.
“But CUC chose to pay for the expenses,” O’Malley said.
He also told the jury that CUC paid $40 per gallon of Rydlyme to Blue Pacific for the 3,000 gallons, but if CUC placed an order of 3,001 gallons, the price would have been at $35 a gallon.
This would mean savings of over $15,000 for the whole transaction, he said.
O’Malley added that the CUC was in dire financial situation but Blue Pacific got special treatment and was paid $50,000 and $10,000 payments ahead of the other vendors.
O’Malley said the elements of conspiracy transpired between the defendants as evidenced by the e-mails and letters regarding the transaction.
In closing, O’Malley asked the jury to think what was so special about CUC having to pay for Rydlyme at $40 a gallon, when the manufacturer’s price was only at $9.95 a gallon.
Apex earlier testified that the highest price it ever sold for Rydlyme was $25 a gallon.
The prosecution presented 25 witnesses but the defense did not have any.
The defense
Defense lawyers David Lujan, Leilani Lujan, Joey San Nicolas, Victorino Torres and Ramon Quichocho said their clients have a constitutional right not to testify.
In his closing argument, Torres stated that all the elements for the five counts of offenses had not been proven beyond reasonable doubt and that the verdict should be “not guilty.”
Torres said James Santos, and not CUC, paid for all the expenses Cabrera incurred during his training for Rydlyme in Chicago, Illinois.
He also pointed out that Rydlyme was a budgeted item for CUC, which means there were funds allocated for it.
Quichocho said the “powerful government is wrong.”
He said all the transactions were proper and no crime was committed.
Quichocho said CUC still owes Blue Pacific the balance for the 3,000 gallons of Rydlyme.
He said there is no law that price mark-ups are illegal, and there is no law on fixing mark-ups.
“Making a lot of money is not a crime. Many others do it but they are not prosecuted,” he said.
He added that entering into a contract to deliver a product is not a crime.
David Lujan stated that the indictment against the defendants is just a piece of paper and not evidence.
“The burden of proof starts with the prosecution and ends with the prosecution, not with the defense” Lujan said.
He said no evidence ever surfaced that Villagomez “bullied” the signing of the contracts.
“There was nothing wrong with the contracts, and nothing is wrong [with the] purchase, and if it comes with a purchase order there is no violation of the procurement regulations,” Lujan said.
He pointed out that the federal government did not call out several witnesses who could have disputed the testimony of some of the “more prepared” witnesses.
