Board accuses oil firms of fraud

SAN JUAN, Puerto Rico — A federal control board overseeing Puerto Rico’s finances has filed a lawsuit to recover what it called massive fraudulent payments made by the island’s power company to fuel suppliers for more than a decade.

The lawsuit was filed Sunday against fuel companies Trafigura and Vitol for allegedly supplying lowgrade oil as well as three laboratories accused of receiving money for falsifying tests on oil bought by Puerto Rico’s Electric Power Authority.

The board said billions of dollars of alleged overpayments from 2002 to 2015 led in part to the power company’s insolvency and caused it to slide deeper into debt, noting that fuel oil purchases are its single largest expense.

The power company is required to buy only highgrade fuel oil, the board said.

Power company spokeswoman Edith Seda said no one was immediately available for comment. Trafigura and Vitol did not immediately return messages for comment.

In an earlier, separate classaction suit that was automatically stayed because the power company is trying to restructure its debt, plaintiffs accuse the company of accepting kickbacks and passing along the alleged overpayments to customers already facing high power bills amid a deepening recession. The company has denied any wrongdoing in that case.

The lawsuit was filed a year after Puerto Rico’s governor signed a historic bill to privatize a power company that is more than $9 billion in debt and operating an unstable electric grid devastated nearly two years ago by Hurricane Maria.