Villagomez, the executive director of the financially troubled CUC from April 1994 to Jan. 2006, is the first CNMI lt. governor to be indicted.
He and his 50-year-old sister Joaquina, her husband Commerce Secretary James Santos, 47, are all out on a $50,000 unsecured bond and will face a jury trial on Oct. 6 in the U.S. District Court for the Northern Marianas.
All three pleaded not guilty to conspiracy to defraud the federal government, wire fraud and theft of federal funds.
Many members of the local community view the indictment on Monday as a strong signal to officials.
“You don’t mess up with federal funds and get away with it,” a CNMI government employee who asked not to be named said.
Another one said the scandal rocking the Fitial administration may yield to more surprises.
“They will bring down each other,” he said, adding, people have long been suffering from blackouts and CUC should be cleaned up.
The fourth defendant in the same case, former CUC Executive Director Anthony Guerrero, 38, who is out on a $10,000 unsecured bond, was also told by the court not to talk with his co-defendants.
All of them have surrendered their passports to the federal court pending the trial.
Guerrero who is represented by attorney Robert T. Torres entered a plea agreement with the U.S. Attorney’s Office last Friday.
His pre-sentence investigation report is due on Oct. 8 and sentencing is scheduled for Nov. 12.
According to U.S. Attorney for the Districts of Guam and the Northern Mariana Islands Leonardo M. Rapadas, “CUC is currently in a state of physical and financial disrepair and is barely able to pay for the fuel needed to power its generators. As a result, the island of Saipan experiences multiple power outages daily.”
Assistant U.S. Attorney Eric S. O’Malley and First Assistant U.S. Attorney Jeffrey J. Strand are assigned to handle the case.
According to the indictment, Villagomez approved purchases of a chemical known as “Rydlyme” from the Santos couple’s distribution company about 10 years ago with mark-up price of 400 percent over cost yet continued the transaction for two years.
Moreover, the chemical wasn’t of any use and may even have caused damage to CUC’s property.
“Based on the CUC’s experience with the 1998-2000 purchases, which included damage to the CUC’s equipment, and resulted in the limited use of Rydlyme only for other purposes such as cleaning tools, cement floors, and plumbing systems. Most of the Rydlyme was disposed of or put in storage,” the 12-page indictment stated.
Villagomez in his capacity as lt. governor and the governor’s designated person in charge of CUC, still purchased Rydlyme from her sister’s firm in 2007, according to Guerrero’s confession.
Only 11 percent of the $120,000 Rydlyme purchased last year was used.
Although this scam started a decade ago, the CNMI Office of the Public Auditor only uncovered it last year.
It tipped off the Federal Bureau of Investigation which resulted in an eight-month long probe.
