Puerto Rico’s financial supervisors plan to refer several municipalities and public corporations to federal law enforcement, accusing them of diverting money earmarked for employees’ retirement as pensioners near a deal on a broader package of benefit cuts, WSJ Pro Bankruptcy reported. The U.S. territory’s oversight board named 10 municipalities and three public corporations it said were holding on to money withheld from workers’ paychecks while failing to remit those funds to defined-contribution retirement accounts. The municipalities, which include the cities of Arecibo, Ponce and Yabucoa, along with three public transit corporations, have failed to remit nearly $4.5 million as of Wednesday, according to documents released by the board. The board also plans to refer the matter to Puerto Rico’s U.S. Attorney’s Office, citing potential violations of a criminal statute on theft and embezzlement from programs receiving taxpayer funding, a board spokesman said.
