When he visited Ponce last July, 39-year-old entrepreneur Felix Mostelac, dressed in an elegant blue Giorgio Armani suit to project an image of power, boasted of his alleged success in making money and chewed on a Cuban cigar in order to finish impressing his partners.
In a series of meetings in which even politicians like Ponce Mayor Maria Melendez and former Gov. Rafael Hernandez Colon participated, Mostelac boasted of juicy commercial relations with the countries of Mercosur, the common market between Argentina, Brazil, Paraguay and Uruguay.
“The Duke” carried a Louis Vuitton briefcase in which he supposedly carried a laptop, but that was just one of his props, because what he always carried in it was a book, according to Barbara Hernandez, the Cuban public relations officer who worked with Mostelac for six months. He did not use a portable computer but rather a Blackberry mobile telephone to send messages to his subordinates to have them work for him.
Miguel Lujan Paletta, president of the Chamber of Commerce of Mercosur and the Americas, based in Sao Paulo, Brazil, confirmed that legal actions are being taken against the entrepreneur, who was their representative in Miami, for allegations of fraud, abuse of his authority and irregularities in collecting membership dues, among other supposed tricks. Sources of the Center for Investigative Journalism confirmed that Mostelac managed to collect hundreds of thousands of dollars from entrepreneurs in – as far as is known – the Dominican Republic, the United States and Panama. The entrepreneur, who carries Spanish and Cuban passports, also tried to get money from organizations and businesses in Puerto Rico and Peru. He confirmed that six persons paid him 200,000 dollars in membership fees, but he refused to give details.
According to Carmen Edith Torres, a lawyer for the municipal government, the Municipality of Ponce has given information to the FBI so they can conduct an investigation. The federal agency did not confirm or deny that it is conducting such an investigation.
When Mostelac visited Puerto Rico, nobody knew that the so-called Consul General of the Chamber of Industry and Commerce of Mercosur USA, a “non-profit organization” registered in Miami, was known as “the 500-pound gorilla.”
“And where does the 500-pound gorilla sit?”
“Anywhere he wants.”
That is how the members of his entourage respond, in chorus, when he asks them that question, acknowledging his ability to get his way by flexing his power.
“He always presents a false image,” Hernandez added. “He has an impressive ability to lie. He believes what he invents and he lives in his own bubble.”
Hernandez insists that she was manipulated and did not know what was going on.
She was the one who made the contacts for “The Gorilla” to visit Puerto Rico after attending a presentation about the Ponce Port given by the executive director of that entity, Jorge Hernandez, last June 24 in Tampa, Florida.
Here on the island, it was common knowledge that the Port of the Americas project into which the Ponce Port was supposed to be transformed, was practically shipwrecked. Almost 10 years after the idea was conceived to convert it into a transshipment center, neither that goal nor the subsequent plan to convert its infrastructure into a value-added space had been achieved. The project had not become a reality and did not have a fixed course, despite the government having invested 285 million dollars in public funds. The two port gantry cranes, for which 22.7 million dollars were invested, had been abandoned for two years. In addition, an experienced international operator had not been found to take charge of the port after three competitive processes.
Felix Mostelac and his people knew about part of the problem and saw an opportunity in it. “We should handle the topic of the Ponce Port as a team and very analytically since this port has many political and economic detractors,” wrote Alexis Gonzalez, Mostelac’s principal partner, in an e-mail to which the Center for Investigative Journalism had access. “Thus each step should be taken very cautiously, as if we were walking on a minefield, since the Chamber (of Commerce Mercosur USA) should not be affected by negative public comments. Let us not forget that this port has not been in operation for years and they want to get over the hurdle at all costs.”
In the first meeting with the people from Ponce, he appeared to be a bona fide friend, but he raised suspicions. When they asked him what businesses he had reached agreements with, he would refer exclusively to what the Chamber of Commerce of Mercosur and the Americas had done in Brazil. He refused to give information about his clients, alleging that the arrangements were carried out in total confidentiality. No information could be gotten in the internet about the companies that he did name.
Anyone who accesses www.mercosurusa.org can be taken aback by its content. The main information contained there does not have anything to do with the Chamber in Miami but rather with the one in Brazil. Instead of publishing information about the entity’s commercial activities, or at least about the financial situation of the countries that make up the economic and political bloc, it displays news from CNN, clocks with the hour in different countries, a calendar in which no activities are programmed, links to translation pages, currency converters, an online calculator, a graph about activities in the stock exchange and weather information about Miami.
“Since due diligence was in process, we did not have all the elements to reject them,” said the Municipality’s lawyer. “Also, they were registered in Florida’s State Department.” They also were accompanied by Puerto Rican lawyer Roberto Moreno, a former administrative judge and former federal prosecutor, who legitimized the group.
In the end, it was Maria Melendez, not the Municipality of Ponce who signed, in her capacity as mayor, a “memorandum of understanding for collaboration” between both parties. It was a convenient ploy for the official. She kept Mostelac within the orbit of Ponce in case he brought something positive but did not present any legal obligations, in case it turned out to be a fiasco. In addition, Melendez benefitted from the public relations generated by the fact that the media in Ponce and the principal national newspapers covered the signing of the agreement. In the memorandum, “based in mutual respect,” the Municipality agreed to provide technical assistance and coordination in exchange for Mercosur USA promoting the importation and exportation of products and services in agriculture, energy, telecommunications, tourism, and infrastructure and port logistics.
That type of spectacle, like the signing of the Ponce agreement, is what Mostelac used to legitimize his activities, according to Barbara Hernandez.
What did that man want? None the less than 200,000 dollars for each business associated with his entity. In exchange, he would promise financing and assistance for projects of importation and exportation of goods and services and contacts with more than 21,000 members and countries allied with Mercosur, etc. When the entrepreneurs told him it was difficult to become partners with him for that amount of money after others had promised them the realization of so many dreams, Mostelac would respond with a lapidary phrase: “In order to marry my wife, I had to sleep with 20 whores.”
The legitimate entity in Brazil, however, informs that the cost of membership at the main office is 900 dollars. The CIJ knows of the case of one Puerto Rican, the son of a well-known family of businesspeople in Ponce and who did not provide information for this story, from which Mostelac requested money but he did not pay him. The Municipality only invested money in food and covered the cost of some of the transportation of Mostelac and his group to Ponce between July 19 and 20, the Municipality’s lawyer affirms.
“Has the FBI interviewed you?” the CIJ asked the “Duke.”
“That is false. Ha, ha, ha. I do not know who is giving out that information because it is wrong.”
Mostelac confirmed that six persons paid the 200,000 dollar membership quota. None of them are Puerto Rican.
“Isn’t that fee supposedly irregular? According to Miguel Lujan Panetta, the membership fee is 900 dollars,” asked the CIJ.
“Be careful what you publish. Lujan Panetta knew about the fee. Our Mercosur USA webpage has the information about the membership contracts for the 200,000 uploaded from the beginning. Our webpage is linked with that of Miguel Lujan Panetta,” he responded.
“I am searching for the information about the $200,000 in the webpage but can’t find it,” the CIJ commented.
“No, because the page was modified about a month ago,” he said.
Lujan Paletta confirmed that Mostelac told him that he was charging $200,000 as the original fee and that the money would only be cashed if the initiative was successful.
“Why is the membership so expensive?”
“Because we have to make a detailed study of the projects that we are going to work with, we do a six-month evaluation, and we have to know who it is, who is talking to us, we have to make sure that no one is playing with us.”
Mostelac added that the money has been returned to two persons because supposedly their projects did not comply with the requirements. According to him, the other four projects are still in process.
“How is it that the activities continue when the main office in Brazil invalidated the representation of the Chamber of Industry and Commerce of Mercosur USA?”
“Because we are their representatives, but we are an independent business. And now with this situation (the break-up between them) we have nothing to do with Lujan Panetta. Everything it’s all right.”
Their visit to Puerto Rico ends, Mostelac leaves with his group for Santo Domingo where he has better and worse luck. Better, because he meets with President Leonel Fernandez, which supposedly adds to the credibility of his actions, and especially because he manages to get a politician and an entrepreneur to advance him 150,000 dollars, according to a diplomatic source in the Dominican Republic.
Members of CC Mercosur USA also had gone to that country to sign an agreement like the one signed with Ponce. The problem for Mostelac was that Dominican lawyer Tomas Vasquez Alvarez works for the Dominican Republic’s Export and Investment Center. He noticed that there were two CC Mercosur USA entities incorporated in Florida’s State Department. One was for profit and Alexis Gonzalez, who had traveled to Santo Domingo, was listed as one of its officials. But the organization was inactive since 2010. The one that was active was the non-profit organization, but it raised a question mark: the person who figured as president was one Thamara Olivari, an illegal worker who took care of Mostelac´s daughter, according to Barbara Hernandez.
Vasquez Alvarez had in his possession the previous agreement signed by Mostelac, who was exerting pressure for Santo Domingo to sign it. The lawyer confirmed to CIJ that he had no other option but to invent the excuse that the documents had been destroyed by the passage of Tropical Storm Emily.
It was then that Rafael Amaro, Projects Development director of the Chamber of Industry and Commerce Mercosur USA, deployed his diplomatic skills in all it’s splendor: “Carlos, we do not understand your doubts and much less your incompetence,” Amaro wrote to the lawyer, according to an electronic mail in possession of the CIJ. “We have changed our opinion and now we have doubts about who you are and the entity that you represent. We will take this up to the office of the honorable President Leonel Fernandez and to our main office in Brazil.”
“Mr. Mostelac feels offended by your incompetence, your irresponsibility as a legal assistant… So you either send that document signed by August 8 or we will dedicate our resources to other countries in the region,” he wrote.
Since the entity in Miami could not provide the information requested, the negotiations with Santo Domingo were stopped. Here in Puerto Rico, the municipal authorities in Ponce sent the information to the FBI and sent a letter to Mostelac telling him that the agreement was canceled. Then the curtain fell. Shortly afterwards, the Chamber of Commerce Mercosur Americas was sending letters to several persons who had done business with Mostelac indicating they were relieving their representatives in Miami of their authority while an investigation was carried out.
“The Duke” continues to struggle for a living in Miami while dealing with his economic problems. Recently he lost his six-bedroom, five-bathroom house along with its pier in Miami Beach, which served as the main office for the Chamber. He could not afford it. “We tried to make an arrangement for payments with one of the creditors and we could not reach an agreement. What can I do?” he admitted.
In addition to the FBI investigation and the lawsuits originated in, Barbara Hernandez said she will file separate lawsuits for breach of contract at the end of December because he did not pay her one single cent in six months.
“There is a message here; there is a lesson,” argued Abel Misla Villalba, an architect and past president of the Chamber of Commerce of the South of Puerto Rico. He travelled to Miami after receiving an invitation from Mostelac to do business, but this did not materialize when Misla realized that the man behaved strangely. “Now that Ponce, as a city, has decided to rediscover the international markets, we have to think strategically and comply with the required procedures. Right now there are people who look to take advantage of the cities, posing as what they are not. What we have to do is develop a sense of malice.”