State Fraud Probe Could Nix New York City's Iconic Puerto Rican Day Parade

The annual Puerto Rican Day Parade, an iconic yearly festival down New York City's famous Fifth Avenue, could be possibly scratched this year due to a growing scandal involving the event's organizers.

The board president resigned as a result of an ongoing investigation by the New York Attorney General into possible financial irregularities by parade organizers.

Parade chairwoman Madelyn Lugo stepped down Feb. 8, saying, "I have been informed by the Attorney General that I have no other choice," according to DNAinfo New York.

Lugo's resignation came just days before New York State Attorney General Eric Schniederman is set to release findings from his investigation into the Puerto Rican Day Parade, Inc, and possible financial irregularities with its board.

State Sen. Ruben Diaz Sr. said the forced resignation will "destroy the parade and destroy the community," according to DNAinfo.

"Last year after the parade he could have taken the whole board into receivership and allowed a new board to coordinate the parade," Diaz said. "Now months before the parade he wants to remove the president?"

Diaz said the investigation into the board is legitimate but maintained Schneiderman and his office are purposely trying to sabotage the parade as a deliberate "attack on the Puerto Rican community."

Lugo told NY1 local television, that an "injustice" has been done to her and while she admitted she failed to properly oversee the board's finances, she noted those apparently guilty of embezzlement are outsiders like the marketing agents, not internal board members.

"We're always at the table asking for documentation, but you receive a report and you receive some backup documentation to the report, you cannot go to a private company and look into the records," Lugo said.

That marketing agent has not commented and neither has the attorney general's office.

"There are now more questions than answers the expected changes in the organization of the parade that the community is asking , but what is clear is that it comes amid a split among Puerto Rican politicians in the city," Angelo Falcón, founder and president of the National Institute for Latino Policy, told EFE news agency.

The controversy over the parade, which organizers claim typically draws a million visitors each year, began in May 2013 when Schniederman's office launched an investigation into the organizing committee, questioning their sponsorship deal with MillerCoors, the makers of Coors Light.

The beer company faced major backlash after they distributed a can in time for the June 9 parade that some called disrespectful because it included a depiction of the Puerto Rican flag for advertising purposes.

MillerCoors defended itself by saying it funded a long-running scholarship on behalf of the parade.

The company's defense sparked the Attorney General's office to demand an explanation as to how Coors is helping further the non-profit National Puerto Rican Day Parade, Inc's charitable mission. The Attorney General's office also expressed its concern over whether or not money donated by Coors had been used to pay for marketing of other alcoholic beverages.