President of Outsourcing Company with Puerto Rico Gov’t Contracts Pleaded Guilty to Covid-19 Relief Aid Fraud
The company had a nearly $84,000 contract to work on a program meant to teach high schoolers about college and entrepreneurship.
Jesús Sierra Toro, whose company had two active contracts with the Puerto Rican government worth nearly $90,000, pleaded guilty to COVID-19 relief aid fraud, according to a plea agreement filed last week. One of the contracts was with the Department of Commerce and Economic Development (DDEC) for a program meant to educate high schoolers about college and entrepreneurship. Meanwhile, the other contract was with the Puerto Rico House of Representatives.
Sierra Toro admitted to filing personal Paycheck Protection Program (PPP) loan applications with “fraudulent information” and corporate PPP loans through Outsourcing Group Services, Corp. and Outsourcing Group, LLC with "fictitious payroll registers showing wages paid to persons who were not employed by the corporation,” according to the plea agreement. In total, Sierra Toro and the two companies were given $484,099 in PPP loans, all of which were later forgiven, according to the plea agreement.
PPP loans were a type of government loan that people and small businesses affected by the economic fallout of the COVID-19 pandemic could apply for to pay for certain permissible expenses, such as rent and payroll costs.
“After receiving the personal PPP loans, Defendant provided to a leader of the scheme two cash kickbacks of $5,000. After receiving the corporate PPP loans, Defendant provided to a leader of the scheme two cash kickbacks of $25,000,” reads the plea agreement.
The leader of the scheme who received the kickbacks and “others” who participated in the COVID-19 relief aid fraud are unnamed in the plea agreement.
Sierra Toro, reached by phone on Sunday, directed questions about the plea agreement to his lawyer. His lawyer's office acknowledged Heavy Weather's request for comment but did not provide a statement.
When Heavy Weather first learned of Sierra Toro's guilty plea last week, Outsourcing Group Services' had two active contracts, one with the DDEC and the other with the office of Representative-At-Large José Aponte Hernández. Both contracts were cancelled after Heavy Weather reached out for comment.
Outsourcing Group Services had a contract with the DDEC valid from September 2024 to June 2025 worth $83,421 for 13 events of the "Juvemprende Tour," an initiative to teach high school youth about college and business development, according to the Puerto Rico Office of the Comptroller. The company previously had a contract that ran from 2021 to 2023 totalling $563,000 with the DDEC for a previous version of "Juvemprende."
"As soon as the [DDEC] learned of Mr. Jesús Sierra Toro's guilty plea, we took immediate action and canceled the contract. At the time of this notification, the DDEC only had one current contract with Outsourcing Group Services, Corp. for services rendered between September and December 2024, which was signed during the previous administration," said Ana Ramos Baquero, a spokesperson for the DDEC, in an emailed statement.
Outsourcing Group Services also had a $5,000 contract for “legislative consulting" with the Puerto Rico House of Representatives. It was awarded on Feb. 21, 2025, five days before the Assistant United States Attorneys' for the District of Puerto Rico signed the document detailing the charges against Sierra Toro. The contract was with the office of New Progressive Party Representative-at-Large José Aponte Hernández for liaising between the central and municipal government, among other responsibilities.
"It took me by surprise," Rep. Aponte Hernández said over the phone on Monday. He claimed to have no prior knowledge of Sierra Toro's ongoing case and the plea agreement.
Sierra Toro had been trying to schedule a meeting with the representative since Friday of last week, Rep. Aponte Hernández. When Heavy Weather reached out for comment, Rep. Aponte Hernández called Sierra Toro, who then presented his resignation "effective immediately." The representative added that Sierra Toro had not submitted any invoices relating to the contract for either February or March.
Outsourcing Group Services had been awarded government contracts worth more than $900,000 since 2015 from the DDEC, the Puerto Rico Legislature, and the local state-owned news station, according to the Office of the Comptroller.
At least 90 people have been indicted by the U.S. Attorney's Office for the District of Puerto Rico for their alleged roles in a fraudulent scheme to obtain Covid-19 relief funds.
A 2023 press release from the U.S. Attorney's Office for the District of Puerto Rico names Manfred Pentzke Lemus as the “principal organizer” of a “multimillion dollar fraudulent scheme to obtain COVID recovery assistance under the federal CARES Act.” The same press release names Ligia María Lemus De Pentzke as the person who allegedly received the kickback payments from the scheme then gave them to others involved in the scheme.
Pentzke Lemus pleaded guilty to wire fraud and money laundering charges in September 2024. Lemus De Pentzke changed her original plea from not guilty to guilty. However, the change of plea hearing has not happened yet.
Sierra Toro, Pentzke Lemus, and Lemus De Pentzke are among the more than 100 defendants named in a civil Racketeer Influenced and Corrupt Organizations (RICO) Act lawsuit filed by Oriental Bank in federal court in November 2024. That lawsuit alleges they orchestrated a plan to obtain PPP loans by submitting applications that contained “false and fraudulent information” about payroll expenses and number of employees. The other incorporator of Outsourcing Group Services is also named in the complaint.
“Defendants operated as part of a well-organized network aimed at exploiting the vulnerabilities of the PPP system,” Oriental Bank alleged in the lawsuit. The bank recognized that “most of the defendants” had already been indicted for racketeering but it was now forced to “vindicate its right to be compensated for the full amount of its losses in Court.”
The Internal Revenue Service, Criminal Investigation has “investigated 1,644 tax and money laundering cases related to COVID fraud potentially totaling $8.9 billion,” according to a March 2024 press release.
The U.S. Attorney's Office for the District of Puerto Rico declined to comment because the case is ongoing.
Heavy Weather is not sharing the Oriental Bank complaint because it contains sensitive personal information of the defendants.
Heavy Weather has uploaded the plea agreement to Courtlistener. You can also find it below:
