Date: January 13, 2023 Contact: newsroom@ci.irs.gov SAN FRANCISCO — Rodrigo Santos pleaded guilty today in federal court to bank fraud, honest services fraud, evading taxes on more than $1.6 million of unreported income, and falsifying records in a federal investigation, announced United States Attorney Stephanie M. Hinds, Internal Revenue Service-Criminal Investigation (IRS-CI) Special Agent in Charge Darren Lian, and Federal Bureau of Investigation Special Agent in Charge Robert K. Tripp. Santos, of San Francisco, was originally charged in a federal complaint on May 11, 2020, with bank fraud. Santos, a licensed civil and structural engineer, was the co-founder and a principal of the San Francisco-based company Santos and Urrutia Structural Engineers, Inc (S&U). His business provided engineering services and managed the process of obtaining building permits from municipal authorities for his clients. The complaint described that Santos was appointed in 2000 as a member of the San Francisco Building Inspection Commission by then Mayor Willie Brown and was promoted in 2004 to be the Commission's President by Mayor Gavin Newsom. Mayor Ed Lee appointed Santos in 2012 to the San Francisco City College Board of Trustees. An indictment (CR 21-268 SI) followed the complaint and charged Santos with committing bank fraud and with providing false records to the FBI in its investigation, among other charges. A grand jury thereafter issued a second, separate indictment (CR 21-453 SI) against Santos, charging him with honest services fraud for repeatedly soliciting donations from his clients to a favored non-profit athletic association of a San Francisco senior building inspector to obtain favorable treatment for the clients from the building inspector. Santos was most recently further charged by an information (CR 22-345 SI) with five counts of tax evasion for the tax years 2015 through 2019. Today Santos pleaded guilty in indictment (CR 21-268 SI) to ten counts of bank fraud involving the commission of fraud against his own clients and his business. In his plea agreement, Santos described that from 2012 to 2019 he engaged in a scheme in which he collected numerous checks from his clients that they made payable to San Francisco's municipal agencies, including the Department of Building Inspection (DBI) and the Department of Public Works, to private companies and to individuals. Santos led his clients to believe these checks would be used to pay the fees or costs of their building projects. Santos instead deposited the checks into his personal bank account. To do so, he either fraudulently altered the checks by editing the "pay to the order of" section of the checks to appear as if the checks had been written to him personally or he fraudulently endorsed the checks to himself by signing the back of the check on behalf of the payee. By depositing the checks into his personal bank account, he obtained his clients' funds for himself. Santos admitted that from 2012 to 2019 he deposited approximately 445 checks of his clients' checks into his personal bank account and fraudulently obtained more than $775,000 of his clients' money. Santos also admitted that from 2012 to 2018 he fraudulently deposited into his personal bank account approximately 378 checks written as "pay to the order" of S&U, his engineering firm. By depositing theses checks into his personal account, Santos admitted that he caused a loss to S&U of more than $718,000. Santos further pleaded guilty in the same indictment to falsifying records in a federal investigation. Santos described in his plea agreement that on March 2, 2020, two FBI agents served him with a grand jury subpoena requesting documents related to six client checks connected to the above-described fraud schemes. In response, Santos altered S&U invoices to make it falsely appear that his clients had been credited for the checks, though Santos had fraudulently deposited them into his own personal bank account and had never credited his clients for those checks. He admitted that he forwarded the falsified invoices to the FBI knowing they were false and intending to obstruct the FBI's investigation. In the second indictment (CR 21-453 SI), Santos pleaded guilty today to one count of honest services wire fraud. In his plea agreement, Santos admitted he engaged in a scheme to defraud the public of the honest services of his co-defendant Bernard Currie, who was a senior building inspector at DBI. Santos knew Curran supported and favored a local non-profit athletic organization. Santos, intending to influence Curran in the performance of his official duties, arranged for his clients to make charitable contributions to the non-profit athletic organization. Santos ensured Curran knew about these donations by either personally delivering the clients' checks to Curran or by otherwise informing him of the donations. Santos described that his clients received favorable official treatment from Curran on their projects in exchange for the donations. In total, from 2017 to 2020 Santos arranged for 13 of his clients to make a total of $9,600 in donations to the non-profit athletic association, and all 13 clients received at least on one official action from Curran in his capacity as a DBI senior building inspector. In the third case against Santos (CR 21-345 SI), Santos today pleaded guilty to five counts of tax evasion. Santos admitted that from 2012 to 2019 he deposited more than $1.6 million into his personal account and that he deliberately omitted this income on his tax returns for the tax years 2012 to 2019, thereby evading taxes. Santos admitted the source of the $1.6 million in unreported income was the above-described bank fraud scheme through which Santos fraudulently deposited 823 client checks into his personal bank account. Santos further admitted that he willfully submitted false and fraudulent tax forms for each year from 2012 to 2019, resulting in a tax avoidance of more than $564,000. Santos entered his guilty pleas today before United States District Judge Susan Illston, who scheduled a sentencing hearing for Santos on June 23, 2023. Santos remains out of custody pending his sentencing hearing. In summary, Santos pleaded guilty to ten counts of bank fraud, one count of honest services wire fraud, one count of falsifying records in a federal investigation, and five counts of tax evasion. Each count of bank fraud in violation of 18 U.S.C. § 1344 carries a statutory maximum sentence of 30 years in prison. The count of honest services wire fraud in violation of 18 U.S.C. §§ 1343 and 1346 carries a statutory maximum sentence of 20 years. The count of falsifying records in a federal investigation in violation of 18 U.S.C. § 1519 carries a maximum sentence of 20 years. Each count of tax evasion in violation of 26 U.S.C. § 7201 carries a maximum sentence of 5 years. However, any sentence following conviction imposed by the court will occur only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553. As part of his guilty plea, Santos agreed to pay more than $1 million in restitution to victims. The Special Prosecutions Section of the U.S. Attorney's Office for the Northern District of California is prosecuting the case. The prosecution is the result of an investigation by the IRS-CI and FBI. The San Francisco City Attorney has also alleged in a state civil lawsuit unsealed in March 2020 that Santos engaged in check fraud. This case is part of a larger federal investigation targeting public corruption in the City and County of San Francisco. To date, twelve individuals have been charged, including high-ranking San Francisco public officials Harlan Kelly and Mohammed Nuru. Nuru was sentenced to seven years in federal prison in August 2022. Multiple city contractors and facilitators have also been charged and several have been sentenced to prison.
