Rigged Insurance Contracts Bring Indictments / Guilty Pleas


In total, prosecutor Mark Roomberg said, the commissions resulting from the rigged contracts were “$2.5 million for the entire group.”

Ex-Harlandale ISD trustee admits fraud conspiracy involving contracts at four San Antonio school districts

By Guillermo Contreras

Updated 2:51 pm, Tuesday, September 27, 2016


William O. Haff leaves the John Wood Federal Courthouse last March. Haff pleaded guilty to conspiracy to commit fraud charges related to an F.B.I. public corruption investigation that has spread to multiple school districts and the now-defunct Bexar Metropolitan Water District.

A former Harlandale ISD board member pleaded guilty Tuesday in connection with an FBI investigation into millions of dollars in rigged insurance contracts at other area school districts and at the now-defunct Bexar Metropolitan Water District.

Joshua J. Cerna, 43, entered the guilty plea to a charge of conspiracy to commit honest services wire fraud, admitting he helped corrupt the insurance company selection process at San Antonio, Edgewood and South San Antonio independent school districts and Bexar Met.

In total, prosecutor Mark Roomberg said, the commissions resulting from the rigged contracts were “$2.5 million for the entire group.” The conspiracy lasted from March 20, 2007, to June 30, 2014, court documents say. Though Cerna served on the Harlandale board for 10 years through 2012, that district is not among those listed as being defrauded.

As for how much in contracts was corrupted, and how much Cerna must pay back in restitution, that is going to be contested, Cerna’s lawyer, Chris Gober, told U.S. District Judge Xavier Rodriguez.

“Goods and services were provided,” Gober said. “It’s just there’s an issue about a conflict of interest.”

Cerna was charged in May, but his charging document (known as a “criminal information”) was kept secret until Tuesday — after he pleaded guilty and after his former co-worker in the insurance industry, Samuel Mullen, was indicted and arrested Friday in the Rio Grande Valley on a similar conspiracy charge.

Cerna was released on an unsecured bond after his plea hearing Tuesday. He and his lawyer declined comment.

Cerna and Mullen both face up to five years in prison. Rodriguez set Cerna’s sentencing for Feb. 8. Mullen is scheduled for a bail hearing on Wednesday in McAllen.

Mullen was chief financial officer in Mullen Pension & Benefit Group LLP, which sought insurance contracts with the districts and Bexar Met on behalf of individual insurance companies. Cerna served as a Harlandale trustee from May 2002 through May 2012, and served as vice president of strategic markets for the Mullen Group during some of that period.

The alleged corruption occurred while Cerna worked at the Mullen Group as he sought business on behalf of insurance companies with which the Mullen Group had a financial interest, his plea paperwork said.

Cerna and Mullen conspired with William Oliver Haff, 46, an insurance industry consultant in San Antonio, who served as a middleman, the documents state. In March, Haff pleaded guilty to a similar conspiracy charge. He admitted that while working for the consulting company hired by some of the school districts — Wortham Insurance and Risk Management — he was also getting paid on the side by Mullen so that the Mullen Group’s clients would land contracts at San Antonio ISD and Edgewood ISD.

Court paperwork, however, said the corruption spread further, enabling the Mullen group to land contracts for their clients at South San ISD and Bexar Met. The FBI is also investigating the trio’s activity at school districts in the Rio Grande Valley, the documents show.


Twitter: @gmaninfedland