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Tuesday, July 10, 2012

Fourteenth Baltimore Police Officer Sentenced in Towing Extortion Scheme


BALTIMORE—U.S. District Judge Catherine C. Blake sentenced Baltimore Police officer Jaime Luis Lugo, age 36, of Aberdeen, Maryland, today to two years in prison, followed by two years of supervised release, for conspiring to commit and committing extortion under color of official right in connection with a scheme in which brothers Hernan Moreno and Edwin Mejia paid Lugo and over 50 other officers to arrange for their car repair company, Majestic, rather than a city-authorized company, to tow vehicles from accident scenes and make repairs. Judge Blake also ordered Lugo to pay restitution of $26,052.38 to the victim insurance companies and $6,000 to the Baltimore Police Department.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation; and Baltimore Police Commissioner Frederick H. Bealefeld, III.

According to his guilty plea, beginning in 2010, Moreno and Mejia agreed with Lugo that as a Baltimore Police Department (BPD) officer responding to accident scenes, Lugo would contact Moreno and Mejia for towing and repair services for vehicles even though Majestic was not an authorized tow company for the city of Baltimore. In exchange, Mejia or Moreno would pay Lugo $300 for each vehicle that arrived at Majestic. Lugo then began to refer vehicles on a regular basis to Moreno in exchange for payment, usually by contacting Moreno by cell phone.

Specifically, while on the scene of an accident, Lugo would contact Moreno and provide him with the details of the accident. Lugo would persuade accident victims to allow their cars to be towed or otherwise delivered to Majestic by telling the victims that Majestic could tow the car, provide repair services, help with the insurance claim, assist in getting a rental car, and waive the owner’s deductible. Lugo advised accident victims that they should not call their insurance company until after they spoke to Moreno or Mejia.

Lugo also understood that Moreno and Mejia would create additional damage to vehicles in order to increase the vehicle insurance claims, thereby increasing the net profit for Majestic as well as covering both the cash bribe payment to Lugo and the payment of the vehicle owner’s deductible. When referring vehicles from accident scenes, Lugo often discussed with Moreno whether a particular vehicle needed more damage. Lugo also falsified his police reports on several occasions in order to make it appear that the damage added to a vehicle by Majestic had been caused by an accident so that the insurance company would not question the repairs. Moreno paid Lugo $200 in cash in exchange for falsifying a police report.

From at least October 2010 to February 2011, Moreno and Mejia paid Lugo $6,000 in cash for vehicles that he had referred to Majestic. Those payments, plus the cost of the additional damages that Moreno and others inflicted upon accident vehicles in the form of insurance claims paid by the insurance companies, caused a total loss of between $120,000 to $200,000.

Hernan Alexis Moreno, age 32, of Rosedale; and Edwin Javier Mejia, age 29, of Middle River, previously pleaded guilty to the extortion conspiracy and are scheduled to be sentenced on September 5, 2012. Fourteen police officers have pleaded guilty to the extortion conspiracy in federal court and one officer pleaded guilty in state court. One officer was convicted by a federal jury after a six-day trial. The last police officer to be sentenced in federal court in connection with the scheme is Kelvin Quade Manrich, age 43, of Middle River, Maryland, who is scheduled to be sentenced on August 3, 2012.

United States Attorney Rod J. Rosenstein praised the FBI and the Baltimore Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Tonya N. Kelly and Kathleen O. Gavin, who prosecuted the case.

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