G.A.L.O.S. And Velasquez Swindled $1.4M From N.Y. Puerto Rican Parade Fundraising

Carlos Velasquez,  President of G.A.L.O.S.

Velasquez's marketing company G.A.L.O.S. and the National Puerto Rican Day Parade 10-year contract to raise funding has been terminated by order of the New York State Attorney General's Office.

By H. Nelson Goodson

February 13, 2014

New York, NY - On Thursday, Attorney General Eric T. Schneiderman announced the reorganization of the National Puerto Rican Day Parade (NPRDP), a non-profit organization and the termination of a ten year contract between Carlos Velasquez, including his for-profit fundraising G.A.L.O.S.  (GALOS) company. Velasquez and his company allegedly submitted false financial fundraising records to the state, which indicated that between 2008 to date failed to report $1.4 million that it raised on behave of the NPRDP. Under GALOS, Velasquez managed to misappropriate those funds for his own personal gain. Velasquez's company had worked with the NPRDP for more than 30 years as its marketing and fundraising corporate firm.

GALOS was also tied to Diversity Foundation, Inc. (DF) whose board of directors had close ties with Velasquez. The DF non-profit foundation allowed itself to be used for commercial interests instead of focusing in providing scholarships to Hispanics and Puerto Rican college students. 

The DF reported it gave out so many scholarships,  but a state audit found that it awarded far less scholarships then it reported.

Velasquez billed the NPRDP for more than $1 million for its services and contract agreements. The New York state attorney general's office (NYAG) ordered Velasquez to forgive the $1M debt and to repay $100,000 to the NPRDP. Velasquez and GALOS were barred from having any connection or influence in the NPRDP organization. 

The NYAG confirmed that under the settlement agreement, "GALOS and Mr. Velasquez are required to cooperate with NPRDP in its reorganization of the parade with new personnel, and any acts of interference on their part could result in additional monetary penalties. GALOS and Mr. Velasquez are permanently banned from further fundraising on behalf of the NPRDP or any marketing of the parade."

Also under the settlement, five NPRDP board members were removed for lack of providing any system of accountability for what GALOS and Velasquez were doing with the fundraising and travel expenses being billed to the organization. The following NPRDP board members were forced to step down, NPRDP President Madelyn Lugo; her husband, General Coordinator Luis Rivera, and Treasurer Shirley Cox and two honorary board members. Ten new board members were to be added to the NPRDP.

The following people were picked as the new addition to the remaining board. They are, Lorraine Cortes-Vazquez, Executive Vice President for Multicultural Markets & Engagement at AARP; Anthony Diaz, a Senior VP in Sales & Trading for a prominent blue chip company; Maria Elena Girone, President & CEO of Puerto Rican Family Institute; Rosa Gutierrez, Vice President in finance at AIG; Louis Maldonado, Partner and Managing Director at d expósito & Partners, a multimedia communications agency; Ululy Rafael Martinez, community activist, attorney and Bronx Community College Foundation  board member; Carmen A. Pacheco, Esq., founding Partner at Pacheco & Lugo, PLLC; Orlando Plaza, owner of Camaradas El Barrio, a restaurant and cultural mainstay in Spanish Harlem; and Lorraine Rodriguez-Reyes, actress and producer with extensive experience in the film, television and theater industry.

The new NPRDP board is now required to amend its by-laws and adopt new policies and procedures to enhance its internal controls and financial oversight, including the formation of an audit committee, processes for the nomination and election of new directors, the adoption of anti-nepotism rules and conflict-of-interest and whistleblower policies, and the requirement to obtain competitive bids from prospective fundraisers or marketing agents. In addition, all directors, both the remaining ones and the newly elected, will be required to complete an ethics and non-profit compliance training course, according to the NYAG.

Click for copy of the Assurance of Discontinuance and result of the GALOS, Carlos Velasquez and NPRDP, 24 page investigation report (PDF)