Whistleblower Sues Private Bus Company on Behalf of Puerto Rico Government

SAN JUAN —  A whistleblower filed a multimillion-dollar lawsuit on behalf of the Puerto Rican government against First Transit Puerto Rico (FTPR), which operated part of the archipelago’s bus system until last year, and other affiliated companies for allegedly submitting fraudulent claims relating to its now-cancelled contract, according to a lawsuit reviewed by The Latino Newsletter. 

In the lawsuit, which remains sealed in state court, Messo LLC alleges that FTPR and the co-defendants submitted false or fraudulent claims for over a decade under a service contract for bus routes originally awarded in 2008. The contract was renewed multiple times through amendments granted without proper public auctions and sometimes applied retroactively without being registered with the Puerto Rico Comptroller’s Office, the lawsuit alleges. 

“All of this is in contravention of the most basic principles applicable to government contracting in Puerto Rico and the requirements of the federal government for contracts of this magnitude that are fully or partially funded with federal funds,” the lawsuit reads. 

The alleged violations of the Fraudulent Claims Act center on the complex, multi-layered deal struck between FTPR and the Puerto Rico Highway and Transportation Administration (PRHTA) in 2008, which was initially worth $57 million but quickly ballooned through amendments and revisions. The lawsuit alleges that these amendments were made without the proper public bidding process, while allegedly charging for rental services that were not provided after the first few months, leasing and selling buses without the proper licenses or concessions, and submitting incorrect information without complying with the terms of the contract. 

Messo LLC has “independently obtained evidence” that these actions violated the archipelago’s Fraudulent Claims Act, according to the lawsuit. Alejandro Figueroa, registered president of Messo LLC, referred all questions to his lawyers. Carlos Sagardía Abreu, who represents Messo LLC, said that they could not comment publicly about the lawsuit. 

The lawsuit seeks that FTPR return all amounts improperly charged to the PRHTA under the contract and its amendments, totaling approximately $85 million and three times the damages suffered by the government, in accordance with the Fraudulent Claims Act. In total, the amount could exceed $100 million when accounting for all damages and penalties.

FTPR’s lawyers did not respond to a request for comment. Julio Badia, FTPR general manager, did not respond to an emailed request for comment.

FTPR has operated buses in Puerto Rico since 2002, according to an archived version of their web page. Their 2024 contract with ACT was cancelled after the Puerto Rico Supreme Court ruled they were ineligible because they submitted financial disclosures related to their parent company and others. The ruling came after a competitor challenged FTPR's selection for the contract, alleging they did not meet the minimum requirements in the proposal process. A letter from the PRHTA’s deputy executive director says they were expected to provide services until November 15, 2025. FTPR still has some repair contracts with two municipalities, according to public records.

When contacted directly via press email, Transdev North America, one of the companies named in the lawsuit, said it does not comment on pending litigation. Nayuan Zouairabani Trinidad, one of the lawyers representing Transdev North America and First Transit, Inc, declined to comment.

When reached for comment, PRHTA stated it lacked knowledge of the lawsuit and therefore could not comment. PRHTA did not respond to follow-up questions after the Latino Newsletter shared the lawsuit with an agency spokesperson.

These types of lawsuits, also known as qui tam lawsuits, allow whistleblowers to file sealed civil actions on behalf of the Government of Puerto Rico for fraud involving its programs, contracts, or services under the Fraudulent Claims to Government of Puerto Rico Programs, Contracts, and Services Act. They must be filed between three and 10 years after the alleged fraudulent claims were made, depending on the circumstances. Whistleblowers are typically entitled to between 15% and 30% of the proceeds from the suit, depending on whether the Government of Puerto Rico chooses to intervene. 

The Latino Newsletter first learned of the lawsuit after three separate notices of removal were filed in federal court. While one remains sealed, the other two are publicly available. One was filed in bankruptcy court through PROMESA.

“At this time, there is a ruling issued by the Court of First Instance. This is because the defendants requested that the case be transferred to the Federal Court for the District of Puerto Rico. The Department of Justice maintains that the case should be returned to state jurisdiction, and therefore, a motion will be filed to return the case to the local court. At this stage, the proceedings in the case are strictly legal and concern the jurisdiction in which the dispute should be heard,” Astrid Matos, spokesperson for the Puerto Rico Department of Justice, told The Latino Newsletter in a written statement.

Recess Holdco, FirstGroup America, and other co-defendants recently withdrew their attorneys from the lawsuit and have until March 16 to appear through new legal representation.

Carlos Berríos Polanco is a journalist from Puerto Rico who covers climate, conflict, and their intersection. He is also the Deputy Editor of The Latino Newsletter’s San Juan Bureau.

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