Hush money and threats and thievery, oh my!

OKEECHOBEE — Hush money and threats couldn’t stop a Florida Power & Light (FPL) whistle blower from exposing an elaborate scheme that involved thieves — one of whom was an Okeechobee man — defrauding the mega utility out of hundreds of thousands of gallons of mineral oil.

After a five-month investigation Detective Alfredo Forgione, of the Palm Beach County Sheriff’s Office (PBCSO), had enough probable cause to make an arrest.

According to the detective’s arrest report he was contacted via email on Feb. 9 by FPL area security manager Brian Camerieri, who asked the detective if he would mind reviewing a case report in which he had documented an ongoing theft that was allegedly happening at the FPL Physical Distribution Center (PDC) in Riviera Beach.

Mr. Camerieri also requested the detective’s assistance in the criminal investigation.

Mr. Camerieri’s notes indicated that he was contacted in January by FPL PDC supply chain supervisor Barry Street regarding an urgent matter. After speaking to Mr. Street, Mr. Camerieri learned the PDC has a transformer shop on site where retired transformers and regulators are sent.

These transformers come in many sizes, from one-phase small padmounts to three-phase large padmounts, and contain anywhere from 5 to 500 gallons of mineral oil in each.

Premier Contracting Company workers are responsible for recording the serial numbers on the transformers and logging them as retired in the material tracking database. The transformers are then drained by the workers into a pit or siphoned by a pump of all their mineral oil into one of three, 6,000 gallon tanks. FPL then recycles the mineral oil by selling it to a refining company for approximately .48 cents a gallon.

The empty transformers are picked up twice a week by a trucking company, Corzo Express, Inc., out of Miami. The transformers are then sold by FPL to a company in New Jersey, which hired Corzo Express to transport the transformers from Florida to New Jersey.

Mr. Street was contacted by Premier Contracting Company manager Mike Quinlan, who reportedly told Mr. Street that one of his employees had approached him and told him about a theft occurring in the transformer shop.

The whistle blower purportedly said a small group of Premier employees were purposely not fully draining the padmount transformers of their mineral oil. The thieves allegedly masked their larceny by only draining enough oil to make the transformer gauge register as empty.

According to Mr. Street when 10 to 15 gallons are drained from a 100-gallon transformer, the gauge shows empty — thus leaving the alleged thieves with 70 to 80 gallons of the oil.

You’re probably thinking that surely someone would have noticed this discrepancy, right? Not so.

At times, while the transformers were still in use, they could register empty which means they were in need of being refilled. Because the purpose of the gauge is not to register the actual amount of oil, the thieves were able to disguise the amount of oil being extracted.

The whistle blower went on to explain that two drivers from Corzo Express — Sandy Lima and Remberto Fuentes — allegedly offered to pay kickbacks to Premier employees to not fully drain the transformers so the two men could profit from the use of the oil.

Lima and Fuentes are the vice president and president of the company, respectively. The whistle blower indicated the suspected thefts have been going on for about two years.

It is reportedly unknown where the mineral oil is later being drained or what the drivers’ end purpose for the stolen oil might be. But, it is believed that on the open market the drivers could get two or three times what FPL receives.

Mr. Street indicated he was not only concerned about the stealing but also that one of the transport trucks would overturn with hundreds of gallons of mineral oil on board. He went on to say each spill over 5 gallons needs to be reported to the state.

One of the two drivers had supposedly threatened harm to anyone who squeals, and the whistle blower said the threat involved a gun. However, that claim has not be substantiated.

Mr. Camerieri asked how one might extract the mineral oil, and Mr. Street indicated it could be done by simply tipping the padmounts over into a pit; by using a siphon with a pump; or, by using heavy machinery to pick up the transformer and pour it into a 50-gallon drum.

As for the various uses of the mineral oil, Mr. Street indicated the perpetrators could be mixing it with diesel fuel to burn in their fleet of trucks, stated the report.

The whistle blower indicated in a Feb. 1 interview that he is a forklift driver for Premier Contracting and has been working at the Riviera Beach distribution center since 2001. According to the report, he described part of his daily activities as loading transformers onto flatbed trucks for transporting. Approximately two years ago the whistle blower was loading a transformer when he noticed it to be significantly heavy. He said it felt like the oil had not been drained from the transformer, but he didn’t say anything for fear of being mistaken. However, he did begin watching what was going on in the draining area.

According to the report the whistle blower indicated that Russell Alan Parow, 29, and two other people besides himself knew about the mineral oil being left in the transformers.

Russell Alan Parow, 29

Two of the men would direct the third on which transformers to drain and which not to drain, according to the whistle blower’s statements.

He also stated that a year ago, Fuentes approached him and told him he wanted to give him a gift.

“You are making me a lot of money,” Fuentes allegedly said as he handed the whistle blower $50.

From that moment on, the whistle blower reportedly received $50 to $100 from either Lima or Fuentes every one or two months. To date, he estimated he has received a little over $1,000.

He stated that when he told another employee about the money he was instructed to just take it, noted the report.

The whistle blower indicated he had always felt uncomfortable with the situation, but recently he felt FPL should know what was happening. Following an argument with one of the alleged perpetrators, the whistle blower felt it was time to come clean.

He indicated he felt the other three employees were being paid hush money and at least two of them were being paid much better.

A surveillance camera was placed in the Premier Contracting break room, continued the report, so investigators could see the alleged hush money being passed. Surveillance cameras were also installed all around the company site.

After several months of capturing the draining and loading of the transformers by the hidden cameras, it was estimated that, at the very least, the men were allegedly stealing 2,000 gallons of mineral oil a week.

Fuentes and Lima reportedly have had access to the PDC since June 2014, which would be 132 weeks. Doing the math, 2,000 gallons being stolen over 132 weeks equals 240,000 gallons. Multiplied by the .48 cents FPL should have received from the sale of the oil and the total loss to FPL is $126,720, stated the report.

After several months of surveillance, the detective had enough probable causes to end the alleged thefts.

Parow, 101 S.W. 11th Ave., Okeechobee, was arrested June 13 on felony charges of grand theft and scheming to defraud. His bond was set at $40,000.

Lima and Fuentes were arrested that same day on the same felony charges. Their bonds were also set at $40,000 each. Both men are residents of Miami.

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