I-Team: New Round Of Wackenhut Arrests

MIAMI (CBS4) ―
(11/21/2008)
A new round of arrest warrants were issued Friday afternoon against current and former Wackenhut executives as part of the ongoing investigation into the company's alleged efforts to deliberately defraud Miami-Dade County.

Miami-Dade police department's Public Corruptions Investigations Bureau began looking into Wackenhut's actions in November 2006 when allegations were made that they were billing the county for hours when guards were supposed to be at their posts, but were not – a condition referred to as a "Ghost Post".

From 2002-2005, investigators found Wackenhut billed the county in excess of $76,000 or roughly 3,500 service hours, which were not performed. Investigators said they believe this was just the tip of the proverbial iceberg and that the actual fraud committed by Wackenhut management/employees was somewhere between 3 and 6 million dollars based on an audit conducted by Miami-Dade County's Audit Management Services.

"They were cheating the taxpayer not only of money but of security," Miami Dade State Attorney Katherine Fernandez Rundle told CBS4 News earlier this month when the first round of warrants were issued against five former Wackenhut managers. "It is once again an example of how the Metro Dade Police Department and this office are not going to tolerate that."

On Friday, warrants were issued against three more individuals, including Eduardo Esquivel, Wackenhut's vice president of the Florida Region; Rene J. Pedrayes, the company's former Florida vice president; and Erika Reyan, a secretary for the company who is accused of entering deliberately false information into the company's payroll system in order to create phony invoices for Miami Dade County to pay.

The three individuals were making arrangements to surrender to police Friday evening.

The allegations contained in the arrest warrants is almost identical to the evidence police presented earlier this month in announcing the arrests of five former Wackenhut employees.

Those employees were: Elijah Pendleton, 67; Roberto Pereira, 45; William Acosta, 43; Robert Alvarado, 42 and 50-year old Nathan Holmes. Each was charged with a single count of racketeering.

Pendleton was the project manager for Wackenhut who oversaw the lucrative five-year contract.

There are two significant differences to Friday's warrants.

First, the new warrants show that at least one of the individuals arrested earlier this month, Robert Alvarado, is now cooperating with prosecutors and is providing detailed information on how the company allegedly operated.

The second significant difference is that Friday's warrants include a current Wackenhut executive, Esquivel. Prior to Friday, Wackenhut could say that any problems or mistakes that may have occurred involved former employees.

Esquivel's attorney Scott Srebnick, said the charges are "baseless" and that Esquivel "had no role in the day to day operations of the security contract."

He claimed the state attorney's office "rushed to judgment before affording me an opportunity to show that Eddy is 100 percent innocent."

Late Friday, Wackenhut issued a statement: "We remain confident that the facts will show that the company did nothing wrong and we will vigorously defend our reputation and the reputation of our management. We have always maintained that if anyone is guilty of these allegations, then they have stolen from both Wackenhut and the County. We stand by this statement. Wackenhut does not, and never has condoned any wrongdoing."

David Markus, an attorney for Rene Pedreyas, said his client is innocent of the charges. "This is a witch hunt and it's really unfortunate," he said, as his client was surrendering to police. "They have been investigating this case for years and years and years and they always said that Rene wasn't on their radar screen."

Markus claims Pedreyas even passed a polygraph test showing he wasn't involved in the fraud. Markus said the only reason his client was being arrested was that the individuals arrested earlier this month are making up stories about Pedreyas and the others to save themselves.

Police, however, contend their case is strong.

In addition to billing for posts which were not manned, investigators said they also found instances when Wackenhut would bill the county for full hours when their guards left early, when guards left their assigned posts to relieve other guards and when Rail guards were positioned at stationary posts to alleviate shortages. In the latter two circumstances, the county was reportedly billed full hours for two positions.

Det. David Colon said the problems for Wackenhut began in 2002. According to Colon, Wackenhut did not have the manpower to cover all of the transit stations and the company feared that if county officials found out, Wackenhut would be fined or possibly even lose the contract.

"So it was very important for Wackenhut to submit paperwork that made it appear that posts were being covered when in fact they weren't and people were being paid when in fact they were home," Colon explained to CBS4 earlier this month.

At the time, Colon made clear that detectives believed others within Wackenhut's management knew what was taking place.

"It is an ongoing investigation," Colon said. "We have reason that he is not the highest person within the organization of Wackenhut that knew and authorized for this to continue."

Sources told CBS4 News that the investigation is still ongoing and police and prosecutors are anxious to see if this newest round of arrests will lead them to others within the company.