Ramirez finally broke his silence this past Saturday when he named seven individuals, he alleges were either involved in, had knowledge of, or encouraged the transactions of the scheme.
In his sentencing memorandum, Ramirez singled-out: Doel Garcia, a UBS executive, Ramiro Colon, a UBS Puerto Rico branch manager and his former supervisor, Carlos Ubinas, the chairman and president of UBS Puerto Rico, as well as four current or former UBS Puerto Rico brokers: David Lugo, Fernando Castillo, Leslie Highley and Luis Sanchez.
In response to these allegations, a spokesman from UBS said: “In its sentencing papers, the DOJ described Mr. Ramirez’s offense as ‘brazen’, found that he took various steps to ‘circumvent’ UBS controls and to ‘obscure’ from UBS what he was doing, and found that Mr. Ramirez ‘took advantage of all parties involved.’ In light of these findings, Mr. Ramirez’s last-ditch efforts to blame his victims for his own criminal conduct should be seen for what it is: an attempt to escape responsibility for his own wrongdoing.”
CNBC reached out to lawyers or representatives of these individuals.
Cory Jacobs, the trial attorney for the U.S. government, “flatly objected” to the assertion that Ramirez was made a “scapegoat” for the scheme.
“UBS did an internal investigation that identified the defendant as the hub of the fraud,” Jacobs told Judge Hogan. He also said that people would go into UBS and ask for “the whopper special.”
Jacobs told the Judge that Ramirez had cooperated with the government during its investigation, but that the evidence and information he provided wasn’t enough for the government to prove beyond a reasonable doubt that other bankers were knowingly engaged in the fraudulent conduct.
UBS added in its statement to CNBC, “UBS refutes any insinuation of wrongdoing by any of the people he has tried to implicate.”
A lawyer for Lugo said, “Mr Lugo did not engage in the activities for which Mr. Ramirez was charged, and to which Mr. Ramirez pled guilty. Nor was Mr. Lugo ever even charged with conducting such activity. Mr. Lugo’s employment arbitration against UBS-PR was settled to the satisfaction of both UBS-PR and Mr. Lugo.”
UBS has previously settled with FINRA and the SEC for roughly $34 million for charges involving the sales practices of the bond funds and failure to supervise.
UBS has also paid out nearly $480 million to clients in FINRA settlements and awards as of January, with over 800 cases against UBS Puerto Rico still pending, according to data compiled by SLCG.
In addition, the Swiss bank has disclosed in regulatory filings an ongoing investigation by the Department of Justice into the impermissible reinvestment of loan proceeds, in regard to the Puerto Rico funds. UBS says they are cooperating with the authorities.
With reporting by Leslie Picker and Scott Zamost