Nick Reyes
“THE invoice that led to the payment in this case to F&S Corporation, and then converted to cash, was not a one-off example of misappropriation of public money or procurement fraud, but one iteration of a years-long scheme whereby F&S received payments for hundreds of thousands of dollars in Governor’s Office and ARPA funds for projects that never existed, were completed by others, or were for items that never were delivered,” Assistant Attorney General James Robert Kingman said in a recent filing in Superior Court regarding the case against Chief of Parole Nick Masga Reyes, who is on leave.
Reyes has been accused of, among other things, theft by deception. His co-defendant is Chuilian Fu, owner of F&S Corporation.
Reyes and Fu were charged with conspiracy to commit misconduct in public office, conspiracy to commit theft by deception, and one count of theft by deception.
Both have pled not guilty to the allegations.
According to the information filed by the Office of the AG in Superior Court, on or about Oct. 4, 2022, on Saipan, “Nick Masga Reyes agreed with…Chuilian Fu that one or both would engage in or solicit theft of property by deception, to wit, the construction of a patio at the Parole Office purported to be constructed by a tailoring company owned by Chuilian Fu’s F&S Corporation in the amount of $9,997.80, but actually constructed by uncompensated labor performed by parolees under the direction of Nick Masga Reyes, made punishable by 6 CMC §1603.”
Conflict of interest
Kingman also informed the court of what he described as a “newly discovered conflict of interest” relating to the attorneys of Reyes and Fu, Joaquin DLG Torres and Anthony Aguon, who also represent former Gov. Ralph DLG Torres in a separate case.
“It is a notice to the court identifying what the Commonwealth believes is an unwaivable conflict of interest,” Kingman said. “It is the Court’s prerogative and obligation to act or not act based on that information, but it is the Prosecution’s obligation to raise the Court’s attention to the matter.”
In his filings to the court, Kingman said he attached some of the purchase orders and invoices referred to in the Department of Finance reports that “demonstrate the connection directly from one of Aguon’s clients, Defendant [Ralph] Torres, and another Defendant, Fu.”
Kingman added, “These are public records obtained from the Department of Finance. Exhibit A is purchase order 711663-0000 and accompanying invoice directing payment of $9,996.00 to F&S Corporation ‘Approved by Governor Ralph DLG Torres’ for four 20-foot containers. F&S Corporation is licensed as a tailoring company. Defendant Fu is its director and sole agent.”
Kingman said “Exhibit B is a payment voucher, invoice, and purchase order for 350 hats for the Department of Public Safety, ‘Approved by Governor Ralph DLG Torres’ coming in at $9,800.00. During the last two years of the Torres administration, F&S received payment for more than 1,200 hats for DPS, all just under $10,000. This would be roughly enough for each officer to have six hats. Procurement regulations require competitive sealed bidding for amounts greater than $10,000.”
“As with the purchase order and invoice for the present case, the F&S payment comes in just under $10,000,” Kingman said.
He said the exhibits previously submitted “indicate just how pervasive this pattern was with payments from the CNMI to F&S Corporation.”
“In this case, Defendant Reyes submitted a letter to Defendant Fu subsequent to the initiation of the investigation in this case that F&S Corporation had been paid ‘by mistake’ for the pala-pala built by the parolees at the Board of Parole. The evidence of these payments to F&S from the Office of the Governor are relevant to show that there was not, in fact, any mistake,” Kingman said.
He said 22-CR-0050, 23-0127-CR and other active criminal investigations known to the defense attorneys all involve allegations of financial impropriety carried on during the administration of former Governor Torres “with his cooperation, knowledge or direction.”
“Investigation has shown that this course of conduct also included Defendants Reyes and Fu. Though the Commonwealth was not aware of the directly adverse interests of defendants Reyes and Fu, those interests are clear now,” Kingman said.
Superior Court Associate Judge Teresa Kim-Tenorio has scheduled a hearing for Tuesday, today, July 2 at 1:30 p.m.
The jury trial is scheduled for July 15.
