An audit by the Office of the Comptroller of Puerto Rico (OCPR) found numerous deficiencies in the State Insurance Fund Corporation (CFSE), including unauthorized investments, unregistered investment advisors, and inadequate accounting records. The audit, which covered a six-year period, found that the CFSE failed to comply with multiple regulations, including not authorizing investments and not contracting a accounting firm to prepare financial statements.
The audit suggests that the Department of Justice recover funds that may have been misused. The CFSE's board of directors allegedly failed to fulfill its fiduciary duty by approving two credit agreements worth $80 million in 2019 and 2021 that did not comply with authorized investment types.
The audit also found that the CFSE invested in private equity funds without proper authorization, with transactions matching those of The Phoenix Fund and its subsidiary PUC Holdings, which are linked to the CFSE's investment advisor, Pariter Wealth Management Group, LLC.