Western District of Texas
Press releases recorded for this federal judicial district.
Midland Men Sentenced to Federal Prison in Connection with Death of 19-Year-Old Haley KempRead the Press Release
In Midland today, 53-year-old Robert Aiken and 28-year-old Christopher Everett Snyder were sentenced to 20 years and 12 years, respectively, in federal prison for their roles in the death of 19-year-old Haley Kemp last year announced Acting United States Attorney Richard L. Durbin, Jr., Drug Enforcement Administration Special Agent in Charge Will Glaspy, Midland Police Chief Price Robinson and Midland County Sheriff Gary Painter.
In addition to the prison term, United States District Judge Robert A. Junell ordered that Aiken and Snyder be placed on supervised release for a period of three years after completing their prison terms.
On November 20, 2014, Aiken pleaded guilty to one count of distribution of methamphetamine and heroin. Snyder pleaded guilty to the same charge on December 11, 2014. By pleading guilty, the defendants admitted that while at Aiken’s residence on May 30, 2014, Aiken provided methamphetamine to both Kemp and Snyder and heroin to Snyder. According to court records, Haley Kemp died in the residence during the early morning hours of May 31, 2014, as a result of a heroin overdose. Both admitted to unsuccessfully attempting to revive Kemp before dumping her body in a remote part of Midland County.
This case was investigated by the Drug Enforcement Administration together with the Midland Police Department and the Midland County Sheriff’s Office. Assistant United States Attorneys John Klassen and Brandi Young prosecuted this case on behalf of the Government.
Former Maverick County Commissioner Sentenced to Ten Years in Federal Prison in Connection with a Bribery, Kickback and Bid-Rigging SchemeRead the Press Release
In Del Rio today, former Maverick County Precinct 4 Commissioner Cesar Flores was sentenced to ten years in federal prison for his role in a bribery, kickback and bid-rigging scheme that caused Maverick County to lose more than $1.3 million announced Acting United States Attorney Richard L. Durbin, Jr., and FBI Special Agent in Charge Christopher Combs, San Antonio Division.
In addition to the prison term, United States District Judge Alia Moses ordered that Flores be placed on supervised release for a period of three years and complete 1,500 hours of community service after completing his prison term. Judge Moses also ordered Flores to pay a maximum $546,170.81 restitution to Maverick County.
On September 5, 2013, Flores pleaded guilty to one count of receiving a bribe. By pleading guilty, Flores admitted that he agreed to be influenced and rewarded for using his position to ensure that certain Eagle Pass contractors, including Javier Gonzales, Hipolito Amaya and Roberto Lopez Macias, were awarded construction contracts in Maverick County Precinct 4 in 2010 and in 2011.
“The corruption in the cases sentenced this week works like a cancer on the body politic, eating away public confidence in local government. We will make every effort to counter its effects and hold accountable those who abuse the public trust for their personal gain,” stated Acting United States Attorney Richard L. Durbin, Jr.
“These defendants created a culture of corruption that spread throughout Maverick County, enabling theft and waste to thrive while taxpayers and honest businesses suffered,” stated FBI SAC Christopher Combs, San Antonio Division.
Authorities are still looking for two defendants in this case: San Antonio businessman German Garcia Cano and 47–year-old Eagle Pass businessman Alejandro Wheeler. Cano, 55-year-old owner of GGC Enterprises (GGC), failed to appear for sentencing yesterday. Wheeler, owner and operator of TVAW Ch. 20, a now defunct media outlet based in Eagle Pass, has been a fugitive since being indicted by a federal grand jury in November 2013.
In October 2014, Cano pleaded guilty to one count of paying a bribe. According to court records, Maverick County paid GGC hundreds of thousands of dollars between 2009 and 2012 for leasing heavy equipment used in construction projects throughout the County. Cano admitted to paying bribes to two Maverick County employees to ensure that GGC secured those leasing contracts with Maverick County and to receive his checks from the County.
Wheeler is charged with one count of aiding and abetting paying a bribe to an agent of an organization receiving federal funds and one count of aiding and abetting theft concerning programs receiving federal funds. According to authorities, in 2010 and 2011, Wheeler allegedly assisted in paying bribes in the form of cash payments as well as discounted campaign advertising and media time to Maverick County commissioners on behalf of contractors looking to secure County construction contracts.
Arrest warrants have been issued for both Cano and Wheeler. Individuals with information as to their whereabouts or first-hand information about corruption, fraud, or bribery related to Maverick County are urged to contact the FBI at (210) 225-6741.
To date, seventeen (17) individuals have been convicted and sentenced in connection with this investigation.
This case is part of an ongoing investigation being conducted by the Federal Bureau of Investigation with assistance from Customs and Border Protection Office of Internal Affairs, Texas Department of Public Safety Criminal Investigative Division, Texas Rangers, Drug Enforcement Administration, and the Eagle Pass ISD Police Department. Assistant United States Attorneys Bryan N. Reeves, Michael Galdo and Katie Griffin prosecuted this case on behalf of the Government.
Eight More Sentenced to Federal Prison in Connection with a Maverick County Bribery, Kickback and Bid-Rigging SchemeRead the Press Release
In Del Rio today, one former Maverick County commissioner, three former Maverick County employees and four Eagle Pass businessmen were sentenced for their roles in a bribery, kickback and bid-rigging scheme that caused Maverick County to lose more than $1.3 million announced Acting United States Attorney Richard L. Durbin, Jr., and FBI Special Agent in Charge Christopher Combs, San Antonio Division.
“The corruption in the cases sentenced this week works like a cancer on the body politic, eating away public confidence in local government. We will make every effort to counter its effects and hold accountable those who abuse the public trust for their personal gain,” stated Acting United States Attorney Richard L. Durbin, Jr.
“These defendants created a culture of corruption that spread throughout Maverick County, enabling theft and waste to thrive while taxpayers and honest businesses suffered,” stated FBI SAC Christopher Combs, San Antonio Division.
United States District Judge Alia Moses sentenced:
- former Maverick County Precinct 1 Commissioner Eliaz Maldonado, age 54, to ten years in federal prison followed by three years of supervised release and to perform 1,200 hours of Community Service after completing his prison term. Maldonado was also ordered to pay a maximum $173,128.59 in restitution to the County. On May 2, 2013, Maldonado pleaded guilty to one count of receiving a bribe by an agent of an organization receiving federal funds. By pleading guilty, Maldonado admitted that in 2010 and 2011, he manipulated the bidding process to guarantee that contractors he chose would be awarded County construction contracts. Furthermore, Maldonado admitted that he instructed the private contractors to submit inflated bids to the County in order to ensure the availability of sufficient funds to perform the construction work, make a profit, and also to pay him bribes.
- former Maverick County Precinct 1 foreman Eduardo Rene Rodriguez, age 43, to 97 months in federal prison followed by three years of supervised release for receiving a bribe and to perform 1,200 hours of Community Service after completing his prison term. Rodriguez was also ordered to pay a maximum $26,535.72 in restitution to the County. In January 2013, the liaison between the County and private contractors hired to perform work for the County pleaded guilty to accepting a bribe. By pleading guilty, Rodriguez admitted that in 2010 and 2011, while on pretrial release for unrelated federal firearms charges, he accepted bribes totaling approximately $12,000 from contractors looking to secure County construction contracts. In 2011, Rodriguez was sentenced by Judge Moses to 21 months in federal prison and ordered to pay a $1,000 fine for conspiring to provide a false statement during the purchase of a firearm.
- former Maverick County Precinct 1 foreman Jaime Flores (Eduardo Rodriguez’s replacement), age 35, and 39-year-old Eagle Pass businessman Joe M. Rodriguez, to 72 months and 42 months in federal prison, respectively, followed by three years of supervised release for their roles in a scheme to steal County property. In addition to the prison terms, Flores and Rodriguez were also ordered to pay, jointly and severally, $32,070.00 in restitution to the County. Flores was also ordered to perform 500 hours of Community Service after completing his prison term. Flores and Rodriguez previously pleaded guilty to one count of theft concerning programs receiving federal funds. By pleading guilty, the defendants admitted that they stole County funds for a 15,000 pound capacity forklift that was never purchased. Court records also revealed that Jaime Flores transported numerous bribe payments on behalf of contractors to former Precinct 1 Commissioner Eliaz Maldonado. Following sentencing, Judge Moses remanded Rodriguez into the custody of the United States Marshals Service to begin serving his prison term.
- former Solid Waste Authority general manager and chief executive officer of the Maverick County landfill Hector Daniel Chavez, Jr., age 42, to 65 months in federal prison followed by three years of supervised release and to perform 800 hours of Community Service after completing his prison term. Chavez was also ordered to pay a maximum $201,057.71 restitution to the County. Chavez had previously pleaded guilty to one count of theft concerning programs receiving federal funds. Chavez admitted that from March 9, 2012, to December 28, 2012, he pocketed over $62,000 in forged Maverick County checks he drafted himself. Court records also revealed that Chavez created a construction company for the purpose of participating in the bribery scheme. Chavez also transported bribes from another contractor to former Precinct 2 Commissioner Rodolfo Heredia in furtherance of the scheme.
- Eagle Pass contractors Javier Gonzalez, age 44, and Eduardo De la Garza, age 46, to 112 months in federal prison followed by three years of supervised release and ordered to perform 800 hours of Community Service after completing their prison terms. In 2013, both Gonzalez and De la Garza pleaded guilty to one count of paying a bribe. Gonzalez, a former Maverick County juvenile probation officer, admittedly paid bribes ranging between $2,000 and $5,000 to multiple commissioners in return for over $400,000 in Maverick County contracts. He was also ordered to pay a maximum $156,337.29 in restitution to the County. De la Garza, who admittedly paid bribes ranging from $1,500 to $8,000 to multiple commissioners in return for over $800,000 in Maverick County contracts, was also ordered to pay a maximum $264,246.51 in restitution.
- Jose Telles, Jr., 46-year-old owner of 4x4 Construction, to ten years in federal prison followed by three years of supervised release. Telles was also ordered to pay $8,628.58 restitution to Maverick County and perform 1,200 hours of Community Service after completing his prison term. On June 4, 2013, Telles pleaded guilty to one count of paying a bribe. By pleading guilty, Telles admitted that in 2010, he paid a $5,000 bribe to Maverick County Precinct 1 commissioner Eliaz Maldonado to secure a $30,200 County contract to construct inlets and junction boxes on Juan and Laura Streets in Precinct 1.
Judge Moses also continued bond conditions for Eliaz Maldonado, Javier Gonzales, Eduardo De la Garza and Jose Telles until the defendants are instructed by federal authorities as when and where to report to begin serving their prison terms. Jaime Flores, Eduardo Rodriguez and Hector Chavez were already in custody prior to today.
San Antonio businessman German Garcia Cano, 55-year-old owner of GGC Enterprises (GGC), failed to appear for today’s scheduled sentencing. A bench warrant has been issued for his arrest. In October 2014, Cano pleaded guilty to one count of paying a bribe. According to the court records, Maverick County paid GGC hundreds of thousands of dollars between 2009 and 2012 for leasing heavy equipment used in construction projects in Maverick County. Cano admitted to paying bribes to two Maverick County employees to ensure that GGC secured those leasing contracts with Maverick County and to receive his checks from the county.
To date, sixteen (16) individuals have been convicted and sentenced in connection with this investigation.
Former Maverick County Precinct 4 commissioner Cesar Flores is scheduled to be sentenced tomorrow afternoon in federal court in Del Rio. On September 5, 2013, Flores pleaded guilty to one count of receiving a bribe. By pleading guilty, Flores admitted that he agreed to be influenced and rewarded for using his position to ensure that certain contractors were awarded construction contracts in Maverick County Precinct 4 in 2010 and in 2011.
This case is part of an ongoing investigation being conducted by the Federal Bureau of Investigation with assistance from Customs and Border Protection Office of Internal Affairs, Texas Department of Public Safety Criminal Investigative Division, Texas Rangers, Drug Enforcement Administration, and the Eagle Pass ISD Police Department. Individuals who have first-hand information about corruption, fraud, or bribery related to Maverick County are urged to contact the FBI at (210) 225-6741. Assistant United States Attorneys Bryan N. Reeves, Michael Galdo and Katie Griffin prosecuted this case on behalf of the Government.
- former Maverick County Precinct 1 Commissioner Eliaz Maldonado, age 54, to ten years in federal prison followed by three years of supervised release and to perform 1,200 hours of Community Service after completing his prison term. Maldonado was also ordered to pay a maximum $173,128.59 in restitution to the County. On May 2, 2013, Maldonado pleaded guilty to one count of receiving a bribe by an agent of an organization receiving federal funds. By pleading guilty, Maldonado admitted that in 2010 and 2011, he manipulated the bidding process to guarantee that contractors he chose would be awarded County construction contracts. Furthermore, Maldonado admitted that he instructed the private contractors to submit inflated bids to the County in order to ensure the availability of sufficient funds to perform the construction work, make a profit, and also to pay him bribes.
Former Maverick County Commissioner, Former County Employee and Three Contractors Sentenced to Federal Prison in Connection with a Bribery, Kickback and Bid-Rigging SchemeRead the Press Release
In Del Rio today, a former Maverick County commissioner, a former Maverick County employee and three contractors were sentenced for their roles in a bribery, kickback and bid-rigging scheme that caused the County to lose more than $1.3 million announced Acting United States Attorney Richard L. Durbin, Jr., and FBI Special Agent in Charge Christopher Combs, San Antonio Division.
“The corruption in the cases sentenced this week works like a cancer on the body politic, eating away public confidence in local government. We will make every effort to counter its effects and hold accountable those who abuse the public trust for their personal gain,” stated Acting United States Attorney Richard L. Durbin, Jr.
“These defendants created a culture of corruption that spread throughout Maverick County, enabling theft and waste to thrive while taxpayers and honest businesses suffered,” stated FBI SAC Christopher Combs, San Antonio Division.
United States District Judge Alia Moses sentenced:
- former Maverick County Precinct 2 Commissioner Rodolfo Bainet Heredia, age 56, to ten years in federal prison followed by three years of supervised release and ordered him to perform 1,200 hours of community service after completing his prison term. Heredia was also ordered to pay a maximum $567,003.88 in restitution to Maverick County. On June 4, 2013, Heredia pleaded guilty to one count of receiving a bribe by an agent of an organization receiving federal funds. By pleading guilty, Heredia admitted that in 2010 and 2011, he manipulated the bidding process to guarantee that contractors he chose would be awarded Maverick County construction contracts. Furthermore, Heredia admitted that he instructed the private contractors to submit inflated bids to Maverick County in order to ensure the availability of sufficient funds to perform the construction work, make a profit, and also to pay him bribes;
- Alejandra Garcia, a 28-year old former Maverick County employee whose duty was to issue Maverick County checks to private contractors, to 109 months in federal prison followed by three years of supervised release and ordered her to perform 800 hours of community service after completing her prison term. Garcia was also ordered to pay a maximum $382,254.29 in restitution to Maverick County and to report to federal authorities no later than June 8, 2015, to begin serving her prison term. In January 2013, Garcia pleaded guilty to receiving numerous cash payments of $200 to $500 in bribes from contractors and commissioners in return for her issuing thousands of dollars in Maverick County checks to contractors before the funds were approved for issuance by the Maverick County auditor’s office;
- Marcelo Alvarez, a 56-year-old surveyor and consultant from Eagle Pass, to 112 months in federal prison followed by three years of supervised release and ordered to pay a maximum $1,022,303.94 restitution to Maverick County. In April 2014, Alvarez pleaded guilty to one count of paying a bribe to an agent of an organization receiving federal funds. According to court documents, between 2010 and 2012, Alvarez paid $100 to $200 on multiple occasions to Maverick County elected officials, including two county commissioners, for their support in securing county construction projects. Ultimately, Maverick County paid in excess of $800,000 to Amistad Consulting, a company to which Alvarez was connected, to perform engineering, project management and consulting services for the county. Alvarez, designated by Amistad Consulting as the Resident Project Representative, received payment for his services of approximately $300,000 between 2010 and 2012;
- Salvador Castillon, 53-year-old owner of South Texas Concrete based in Eagle Pass, to 87 months in federal prison followed by three years of supervised release. Castillon was also ordered to pay a maximum $175,804.71 in restitution to Maverick County and perform 800 hours of community service after completing his prison term. Judge Moses also ordered that Castillon report to federal authorities by June 8, 2015, to begin serving his sentence. In December 2013, Castillon pleaded guilty to one count of paying a bribe to an agent of an organization receiving federal funds. According to court records, Castillon was awarded Maverick County construction contracts totaling $416,800 in 2010 and $148,000 in 2011. Castillon admitted that during that time period, he paid then Maverick County Precinct 2 commissioner Rodolfo Bainet Heredia approximately $57,000 in return for being awarded the construction contracts; and,
- Saul Lombrana, 65-year-old owner and operator of Fiesta Contractors based in Eagle Pass, to 33 months in federal prison followed by three years of supervised release. Lombrana was also ordered to pay a maximum $14,500.00 in restitution to Maverick County and perform 300 hours of community service after completing his prison term. Judge Moses also ordered that Lombrana report to federal authorities by June 8, 2015, to begin serving his sentence. In February 2014, Lombrana pleaded guilty to one count of paying a bribe to an agent of an organization receiving federal funds. By pleading guilty, Lombrana admitted that in March 2011, he submitted a $14,500 bid to construct 155 linear feet of concrete drain swell on Rafael Street in Precinct 1. After being awarded the contract, Lombrana never constructed the concrete drain swell, but requested and received full payment for the project. Of the $14,500 he received, Lombrana admittedly only kept $5,000 while giving the rest to a Maverick County employee Jaime Flores as a bribe.
This afternoon, Judge Moses remanded Maverick County Precinct 4 Commissioner Cesar Flores into federal custody while postponing his sentencing. A new sentencing date has yet to be scheduled. On September 5, 2013, Flores pleaded guilty to one count of receiving a bribe. By pleading guilty, Flores admitted that he agreed to be influenced and rewarded for using his position to ensure that certain contractors were awarded construction contracts in Maverick County Precinct 4 in 2010 and in 2011.
To date, eight individuals have been sentenced in connection with this investigation. Hipolito Amaya, Jose Aguilar and David Gelacio have previously received sentences of 41 months incarceration, 14 months incarceration and 12 months incarceration, respectively. Nine more defendants are scheduled for sentencing tomorrow in Del Rio before Judge Moses.
This case is part of an ongoing investigation being conducted by the Federal Bureau of Investigation with assistance from Customs and Border Protection Office of Internal Affairs, Texas Department of Public Safety Criminal Investigative Division, Texas Rangers, the Drug Enforcement Administration, and the Eagle Pass ISD Police Department. Individuals who have first-hand information about corruption, fraud, or bribery related to Maverick County are urged to contact the FBI at (210) 225-6741. Assistant United States Attorneys Bryan N. Reeves, Michael Galdo and Katie Griffin prosecuted this case on behalf of the Government.
Jury Convicts Lebanese-Born Man on Charges of Making False Statement to a Federal Agent and an Unlawful Attempt at NaturalizationRead the Press Release
This afternoon in San Antonio, a federal jury convicted 45-year-old Lebanese-born Wissam "Sam" Allouche of knowingly lying to federal authorities, announced Assistant Attorney General for National Security John Carlin, Acting United States Attorney Richard Durbin, Jr., and FBI Special Agent in Charge Christopher Combs, San Antonio Division.
Following a two-week trial, jurors convicted Allouche of making a false statement to the Department of Defense and unlawfully attempt to procure and obtain naturalization and citizenship. Evidence presented during trial revealed that Allouche, who migrated to the United States after marrying a U.S. Army soldier, lied to U.S. immigration authorities about whether he was still living with his spouse during the naturalization process in order to obtain United States citizenship. In addition, while seeking a contract linguist position with the U.S. Department of Defense that required a security clearance, evidence revealed that Allouche failed to disclose that he was a member of the Amal militia. Allouche was acquitted of one count of unlawfully obtaining citizenship by lying about his association with Amal and Hezbollah, both terrorist organizations at the time. Former relatives testified Allouche made statements that he killed an Israeli pilot captured by Hezbollah in retaliation for his imprisonment.
Allouche remains in federal custody pending sentencing scheduled for April 27, 2015. He faces up to ten years in federal prison.
The case was investigated by the FBI and the San Antonio Joint Terrorism Task Force. The case was prosecuted by Assistant U.S. Attorneys Mark Roomberg and Jay Hulings for the Western District of Texas.
Former Maverick County Justice of the Peace Cesar Iracheta Indicted by Federal Grand Jury for "Pay-To-Play" Bribery Scheme Involving County ContractsRead the Press Release
This morning, FBI agents arrested 56-year-old former Maverick County Justice of the Peace and Eagle Pass businessman Cesar Iracheta on federal bribery charges in a "pay-to-play" scheme involving County construction contracts announced Acting United States Attorney Richard Durbin, Jr., and FBI Special Agent in Charge Christopher Combs, San Antonio Division.
A federal grand jury indictment, returned on Wednesday and unsealed today, charges Iracheta with two counts of paying bribes. The indictment alleges that in 2010, Iracheta, doing business as C&A Construction, paid a bribe to a Maverick County commissioner in order to secure two Precinct 2 County construction contracts worth approximately $49,000. The indictment also alleges that in 2011, Iracheta paid a bribe to another Maverick County commissioner in order to secure a Precinct One County construction contract worth $22,500.
According to the indictment, Iracheta submitted inflated bids to Maverick County in order for there to be sufficient funds to perform the construction work, make a profit, and pay bribes to the County commissioners.
Upon conviction, Iracheta faces up to ten years in federal prison for each bribery charge.
This ongoing investigation is being conducted by the FBI and the Texas Department of Public Safety Criminal Investigative Division together with the Customs and Border Protection Office of Internal Affairs. Individuals who have first-hand information about corruption, fraud, or bribery related to Maverick County are urged to contact the FBI at (210) 225-6741.
Assistant United States Attorney Katherine Griffin and Bryan Reeves are prosecuting this case on behalf of the Government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.
Federal Grand Jury Indicts Maverick County Commissioner Jose RosalesRead the Press Release
In Eagle Pass, TX, this afternoon, FBI agents arrested 35-year-old Maverick County Precinct 3 Commissioner and Eagle Pass ISD teacher Jose Luis Rosales after a federal grand jury in Del Rio charged him earlier this week in connection with an alleged bribery, kickback and bid-rigging scheme announced Acting United States Attorney Richard Durbin, Jr., and FBI Special Agent in Charge Christopher Combs, San Antonio Division.
A federal grand jury indictment, returned on Wednesday and unsealed today, charges Rosales with four counts of receiving bribes. The indictment alleges that in 2011 and 2012, Rosales manipulated the bidding process to guarantee that individuals he chose would be awarded Maverick County construction contracts. Those contractors deposited the checks issued to them by Maverick County and then made cash payments to Rosales. According to the indictment, the private contractors submitted inflated bids to Maverick County in order for there to be sufficient funds to perform the construction work, make a profit, and pay the bribe to Rosales.
Upon conviction, Rosales faces up to ten years in federal prison for each bribery charge.
This ongoing investigation is being conducted by the FBI and the Texas Department of Public Safety Criminal Investigative Division together with the Customs and Border Protection Office of Internal Affairs and the Eagle Pass Independent School District Police Department. Individuals who have first-hand information about corruption, fraud, or bribery related to Maverick County are urged to contact the FBI at (210) 225-6741.
Assistant United States Attorney Katherine Griffin and Bryan Reeves are prosecuting this case on behalf of the Government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.
Waco Businessman Pleads Guilty to Federal Wire Fraud ChargesRead the Press Release
In Waco, Charles D. Jones, 61-year-old owner of Charles D. Jones Capital Management, Inc. (CDJCM), faces up to 20 years in federal prison after pleading guilty to wire fraud in connection with the theft of more than $8 million from his clients announced Acting United States Attorney Richard L. Durbin, Jr., U.S. Secret Service Special Agent in Charge Kathleen Hickman, Dallas Field Office, and Texas Department of Public Safety Director Steve McCraw.
According to court records, CDJCM provided fee-only personalized financial planning and investment management for individuals, trusts, foundations and retirement plans. From 2005 to 2012, the defendant stole money and property from his victim clients and used the stolen proceeds for his own personal benefit. To further perpetuate his Ponzi scheme, the defendant created false account statements and mailed or e-mailed them to his victim clients. Jones also caused fraudulent tax returns to be filed in order to cover up his theft. By the defendant’s own estimate, he stole approximately $8,378.524.94 from his clients.
Jones remains on bond pending sentencing which is scheduled for 1:00pm on April 15, 2015, before United States District Judge Walter S. Smith, Jr., in Waco.
This investigation was conducted by the United States Secret Service and the Texas Department of Public Safety Special Crimes Unit. Assistant United States Attorney Greg Gloff is prosecuting this case on behalf of the Government.
San Antonio Businessman Sentenced for V.A. Fraud SchemeRead the Press Release
In San Antonio today, 71-year-old Jonathan Patrick Saunders, President of Saunders MEP, Inc., was sentenced to one year and one day in federal prison followed by three years of supervised release and ordered to pay $1,494,000 restitution for defrauding the Department of Veterans Administration (VA) in connection with architectural and engineering contracts announced Acting United States Attorney Richard L. Durbin, Jr.
On January 6, 2015, Saunders pleaded guilty to one count of wire fraud. By pleading guilty, Saunders admitted that over a period of five years beginning in March 2008, he knowingly provided fraudulent information to the VA in order to obtain up to $2 million in task orders from the VA for projects to be performed in and around San Antonio.
Today, United States District Judge Orlando Garcia found that Saunders made false representations to the VA. In his SF-330 “Architect-Engineer Qualifications” package, Saunders falsely represented that his business qualified as a Service Disabled Veteran Owned Small Business, that certain persons with particular qualifications worked for his firm, and that certain projects were completed by his firm. Saunders used interstate wires to execute his fraud scheme.
This case was investigated by agents with the Office of Inspector Generals from the VA and the Small Business Administration. Assistant United States Attorney Thomas P. Moore prosecuted this case on behalf of the Government.
Austin Man Sentenced to 15 Years in Federal Prison for Production of Child PornographyRead the Press Release
In Austin today, U.S. District Judge Lee Yeakel sentenced 32-year-old Josh Rube to 15 years in federal prison followed by ten years of supervised release for production of child pornography announced Acting United States Attorney Richard L. Durbin, Jr., Federal Bureau of Investigation Special Agent in Charge Christopher Combs and Austin Police Chief Art Acevedo.
On May 30, 2014, federal and state authorities executed a search warrant on a recreational vehicle owned by the defendant and seized a digital camera, several computers and related storage media. An analysis of computer related equipment collected by authorities revealed numerous images of a minor female engaged in sexually explicit conduct, including several images where Rube sexually assaulted his victim. In October 2014, Rube pleaded guilty to enticing a person under the age of 18 into engaging in sexually explicit conduct for the purpose of producing images of such conduct.
This investigation was conducted by the FBI together with the Austin Police Department. Assistant United States Attorney Matthew Devlin prosecuted this case on behalf of the Government.
Federal Jury Convicts Burnet County Man of Firearms and Drug Trafficking ChargesRead the Press Release
In Austin last night, a jury convicted 44-year-old Bertram, TX, resident Jimmy Don Hardin of federal firearms and drug trafficking charges announced Acting United States Attorney Richard L. Durbin, Jr. and Texas Department of Public Safety Director Steve McCraw.
At the conclusion of a four-day trial, jurors convicted Hardin of conspiracy to possess with intent to distribute 500 grams or more of methamphetamine, possession of a firearm during a drug trafficking crime, possession of a stolen firearm and possession of a firearm by a convicted felon. Evidence presented during trial revealed that from May 2013 to December 2013, Hardin conspired with others to distribute methamphetamine throughout Burnet, Llano, Lampasas, Travis and Williamson counties. Authorities arrested Hardin on December 4, 2013, during the execution of a search warrant at his residence. At the time, Hardin was in possession of a stolen .45 caliber pistol as well as nine other firearms. Hardin’s criminal history revealed multiple convictions for manufacture of methamphetamine in Burnet County, TX.
Hardin remains in federal custody pending sentencing scheduled for April 23, 2015, before U.S. District Judge Lee Yeakel. He faces between ten years and life in federal prison. Two co-defendants--57-year-old Guillermo Naranjo Reyna, an illegal alien residing in Austin, and 60–year-old Nebes Montemayor of Austin--pleaded guilty to the drug conspiracy charge prior to trial. Reyna and Montemayor remain in federal custody pending sentencing scheduled for March 10, 2015, before Judge Yeakel. Reyna and Montemayor also face between ten years and life in federal prison.
This case was investigated by the Texas Department of Public Safety, Burnet County Sheriff’s Office, Burnet County District Attorney’s Office, Llano County Sheriff’s Office, Bastrop County Sheriff’s Office, Williamson County Sheriff’s Office, Austin Police Department, and the Cedar Park Police Department together with the Drug Enforcement Administration (DEA) and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Assistant United States Attorneys Doug Gardner and Matt Harding are prosecuting this case on behalf of the Government.
Greenville, TX Man Sentenced to Life in Federal Prison for Transporting A Minor to Mexico for Sexual PurposesRead the Press Release
In Midland today, U.S. District Judge Robert A. Junell sentenced 35-year-old Joel Aguirre-Lara of Greenville, TX, to life in federal prison for transporting a minor to Mexico for sexual purposes announced Acting United States Attorney Richard L. Durbin, Jr. and Homeland Security Investigations (HSI) Special Agent in Charge Waldemar Rodriguez in El Paso.
On October 15, 2014, a jury convicted Aguirre-Lara of one count of transportation of a minor to engage in sexual activity and one count of aggravated sexual abuse of a child under 12. Evidence presented at trial revealed that on January 10, 2014, Aguirre-Lara, formerly of Del Rio, TX, transported a minor female across the border to Ciudad Acuna, Mexico, where he then proceeded to engage in sexual activity with the minor. Testimony during trial also revealed that Aguirre-Lara had sexual relations with the minor female over a period of approximately three years beginning when she was eight years old.
On April 9, 2014, the Midland County Sheriff’s Office was contacted by the victim’s mother regarding the sexual assault of the victim in this case. The victim was taken to the Midland Rape Crisis and Children’s Advocacy Center for an evaluation and interview. A federal criminal complaint was filed on April 11, 2014, and an arrest warrant was issued for Aguirre-Lara. He was arrested on April 15, 2014, in Greenville, TX, and has remained in federal custody ever since.
This case was investigated by Homeland Security Investigations (HSI) together with the Texas Department of Public Safety, Midland County Sheriff’s Office and the Midland Rape Crisis and Children’s Advocacy Center. Assistant United States Attorney Austin Berry prosecuted this case on behalf of the Government.
Copperas Cove Women Sentenced for Lone Star Card FraudRead the Press Release
In Waco today, 33-year-old Jennifer Hailes of Copperas Cove, TX, was sentenced to six months in federal prison followed by three years of supervised release and ordered to pay $6,918.42 restitution for fraudulently using her Lone Star Card benefits announced Acting United States Attorney Richard L. Durbin, Jr.
In addition to Hailes, United States District Judge Walter S. Smith, Jr. sentenced 34-year-old LaToya Lewis to five years probation including six months electronic monitoring and ordered the Copperas Cove resident to pay $10,429.24 restitution for fraudulently using her Lone Star Card benefits.
The Supplemental Nutrition Assistance Program (SNAP), formerly known as the USDA Food Stamp Program, is the nation’s principal food assistance program which enables low income households to purchase food. The Lone Star Card is a USDA electronic benefits transfer card used in the State of Texas.
In December 2014, both defendants pleaded guilty to one count of benefits fraud. By pleading guilty, both admitted to illegally exchanging USDA SNAP benefits for cash on numerous occasions between 2010 and 2014 at Fong’s Seafood Market in Copperas Cove. Lone Star Cards and other personal identification information belonging to the defendants, as well as ledgers reflecting cash amounts paid to the defendants, were seized during the execution of a search warrant at the business in September 2013.
On October 29, 2014, Judge Smith sentenced store owner Fong Ing McCaffrey to three years probation and ordered her to pay $153,542.35 restitution for her role in the benefits fraud scheme.
This case was investigated by agents with the USDA-Office of Inspector General, Texas Department of Public Safety and Texas Health and Human Services Commission. Assistant United States Attorney Greg Gloff prosecuted this case on behalf of the Government.
Somali Citizen Sentenced to 15 Years in Federal Prison for Conspiring to Provide Material Support to Al-ShabaabRead the Press Release
This afternoon in San Antonio, 43-year-old Abdinassir Mohamud Ibrahim, a citizen of Somalia, was sentenced to 15 years in federal prison for conspiring to provide material support to Al-Shabaab, a designated foreign terrorist organization, and for making a false statement in an Immigration matter announced Assistant Attorney General for National Security John Carlin, Acting United States Attorney Richard Durbin, Jr., FBI Special Agent in Charge Christopher Combs, San Antonio Division and Chief Patrol Agent Rodolfo Karisch, U.S. Border Patrol, Del Rio Sector.
Ibrahim, 43, a citizen of Somalia, was charged in a two-count superseding information, returned on July 31, 2014 and unsealed today in San Antonio, and pleaded guilty to both counts of the information on July 31, 2014. Ibrahim admitted that from about May 18, 2010, to about Jan. 31, 2014, he knowingly conspired to provide material support and resources, specifically sending emails enlisting support for al-Shabaab and making a cash payment to a known member of al-Shabaab for the benefit of the organization. Ibrahim knew at the time that al-Shabaab was designated by the United States as a foreign terrorist organization.
Ibrahim also pleaded guilty to making a false statement in an immigration matter. According to the information, Ibrahim knowingly lied in his application for naturalization as he had previously lied on his request for refugee status, falsely claiming that he was of a member of the minority Awer clan in Somalia and subject to persecution by the majority Hawiye clan. However, Ibrahim was actually a member of the Hawiye clan and not subject to persecution. Ibrahim also admitted he had lied on his naturalization application by having previously lied on his refugee application by falsely claiming that he had not provided material support to a terrorist group, when he had in fact provided material support in the form of cash to an al-Shabaab member.
“Protecting Americans from the threat of terrorism both at home and abroad is the highest priority of this office, and today’s sentencing is yet another victory in that fight," said SAC Christopher Combs, San Antonio FBI. “FBI's Joint Terrorism Task Force (JTTF) is dedicated to investigating and vigorously prosecuting anyone who provides support or resources to terrorists or foreign terrorist organizations. We commend the hard work, dedication, and exceptional coordination of the local state and federal agencies assigned to the Joint Terrorism Task Force who made this case a success.”
“This conviction highlights the greater interagency cooperation that works to safeguard our communities against those that wish to do us harm,” said Chief Patrol Agent Rodolfo Karisch, U.S. Border Patrol, Del Rio Sector. “I applaud the hard work and dedication of all the men and women who protect our country on a daily basis.”
The case was investigated by the FBI and the Border Patrol together as part of the San Antonio Joint Terrorism Task Force. The case was prosecuted by Assistant U.S. Attorneys Mark Roomberg and Christina Playton for the Western District of Texas.
Jury Convicts Waco Man of Federal Drug ChargeRead the Press Release
A Waco, TX, man faces up to 20 years in federal prison after a jury convicted him today of his role in a family-based marijuana distribution conspiracy announced Acting United States Attorney Richard L. Durbin, Jr.
A federal jury in Waco convicted 59-year-old Phillip Larry Koss of conspiracy to possess with intent to distribute in excess of 50 kilograms of marijuana. The jury acquitted him of one count of possession with intent to distribute marijuana and one count of maintaining a drug involved premise. According to evidence presented during trial, the defendant participated in a drug trafficking scheme by using his bank account to finance portions of the operation including paying for cell phones, marijuana cultivating equipment and other miscellaneous bills.
On November 29, 2013, authorities executed a search warrant at the defendant’s residence and discovered approximately 12 pounds of tetrahydrocannabinol, commonly known as THC, several firearms and $27,000 in U.S. Currency. Authorities have also recovered approximately 200 pounds of marijuana resulting from related search warrants executed in California as well as traffic stops during this investigation. Testimony also revealed that Koss’ son, Conner, among others, cultivated high grade marijuana in the State of California and arranged for it to be transported to and distributed in the Austin area.
In July 2014, Phillip Larry Koss entered a guilty plea to possession with intent to distribute marijuana, but withdrew his guilty plea in November 2014 prior to sentencing. Sentencing for Phillip Larry Koss based on the jury’s verdict is scheduled for April 1, 2015, in Waco before United States District Judge Walter S. Smith, Jr.
Koss’ four co-defendants, including his wife and two sons, have been convicted of their roles in the marijuana trafficking conspiracy and sentenced as a result of this investigation. Last year, Conner Phillip Koss received a sentence of 121 months incarceration; Le’Ann Koss, 70 months incarceration; and, Brian Thomas Smith, two years incarceration. On January 7, 2015, Chad Koss was sentenced to three years probation including six months home confinement and ordered to pay a $1,000 fine.
This investigation was conducted by the McGregor Police Department, Texas Department of Public Safety and the Yuba County (CA) Narcotics Enforcement Team. Assistant United States Attorney Mary F. Kucera prosecuted this case on behalf of the Government.
Defendants in New Braunfels Texas Mexican Mafia Case Sentenced to Federal PrisonRead the Press Release
In San Antonio today, seven New Braunfels Texas Mexican Mafia (TMM) members, prospects and associates were sentenced to federal prison for their roles in a drug trafficking and extortion scheme announced Acting United States Attorney Richard L. Durbin, Jr., Federal Bureau of Investigation Special Agent in Charge Christopher Combs, Texas Department of Public Safety Director Steve McCraw and New Braunfels Police Chief Tom Wibert.
This morning, Chief U.S. District Judge Fred Biery sentenced the following TMM defendants:
- Ignacio Flores, Jr. (aka “Iggy”) – age 32 – TMM Sergeant -- sentenced to 235 months in federal prison followed by five years of supervised release after pleading guilty to conspiracy to possess with intent to distribute methamphetamine, interference with commerce by threat or violence, felon in possession of a firearm and possession of body armor by a convicted felon.
- Nicholas “Nicky” Flores – age 31 – sentenced to 235 months in federal prison followed by five years of supervised release after pleading guilty to conspiracy to possess with intent to distribute methamphetamine and interference with commerce by threat or violence.
- Rene Zamarripa – age 38 -- sentenced to 188 months in federal prison followed by five years of supervised release after pleading guilty to conspiracy to possess with intent to distribute methamphetamine and one count of interference with commerce by threat or violence.
- Juan Vega (aka “Johnny Boy”) – age 33 – sentenced to 130 months in federal prison followed by three years of supervised release after pleading guilty to interference with commerce by threat or violence .
- Javier Martin Meza – age 30 -- sentenced to 160 months in federal prison followed by five years of supervised release after pleading guilty to conspiracy to possess with intent to distribute methamphetamine and one count of interference with commerce by threat or violence.
- Gary Gonzales (aka “G Monster”) – age 23 – sentenced to 60 months in federal prison followed by five years of supervised release after pleading guilty to conspiracy to possess with intent to distribute methamphetamine and one count of interference with commerce by threat or violence.
Two co-defendants were sentenced last year for their role in the drug trafficking and extortion scheme. On May 23, 2014, 36-year-old Julian Morales (aka “Oso”) was sentenced to 168 months in federal prison followed by three years of supervised release. On October 31, 2014, 30-year-old TMM Lieutenant Abraham Ramirez (aka “Puppet”) was sentenced to 96 months in federal prison followed by three years of supervised release. Morales and Ramirez each pleaded guilty to one count of conspiracy to possess with intent to distribute methamphetamine and one count of interference with commerce by threat or violence.
According to court records, from May 2011 to July 2013, the defendants conspired to extort money from New Braunfels area drug traffickers so that the money could be distributed to members of the TMM. The defendants required persons who sold narcotics to pay the defendants a “tax” on the proceeds of drug distribution. This requirement that drug dealers pay the drug tax was enforced by the defendants through threats of force and physical violence, and actual force and violence. The defendants were also responsible for distributing between 500 grams and 1.5 kilograms of ICE methamphetamine in the New Braunfels area from May 2012 until July 2013.
In a separate, but related, matter, Chief Judge Biery sentenced 37–year-old Rocky Esquivel (aka “Rock”) this morning to ten years in federal prison followed by five years of supervised release after Esquivel pleaded guilty to possession with intent to distribute methamphetamine and possession of a firearm in furtherance of drug trafficking. On May 1, 2013, Esquivel was the subject of a traffic stop in New Braunfels. At the time, authorities discovered that he was in possession of 108 grams of methamphetamine, three firearms, body armor and $4,085.00 in U.S. Currency.
This case was investigated by the FBI, Texas Department of Public Safety and the New Braunfels Police Department.
Defendant in Los Zetas Money Laundering Case Sentenced to Maximum Federal Prison Term for Conspiring to Bribe JudgeRead the Press Release
In Austin this morning, 53-year-old Veracruz, Mexico businessman Francisco Antonio Colorado-Cessa (aka “Pancho”), was sentenced to the maximum five years in federal prison for attempting to bribe a federal judge announced Acting United States Attorney Richard L. Durbin, Jr., Federal Bureau of Investigation Special Agent in Charge Christopher Combs and Internal Revenue Service-Criminal Investigation Special Agent in Charge Steve McCollough.
This five-year prison term will be added to Colorado-Cessa’s maximum 20-year federal prison term for his role in a complex scheme to launder millions of dollars in illicit Los Zetas drug trafficking proceeds to purchase, train, breed, and race American quarter horses in the United States.
On March 12, 2004, Colorado-Cessa, his son, Francisco Agustin Colorado Cebado (aka “Panchito”), and his business partner, Ramon Segura Flores, pleaded guilty to one count of conspiracy to bribe a federal judge. All three admitted to conspiring last year to pay a $1.2 million bribe to a federal judge in order to secure a reduced sentence for Colorado-Cessa in the money laundering case. According to court records, at no time before or during this investigation was the judge involved in the alleged criminal activity.
“A fair and impartial criminal justice system is one of the cornerstones of our democracy, and it is not for sale. The FBI will continue to fiercely protect it against criminals who think they can buy their way to unjust freedom,” stated FBI Special Agent in Charge Christopher Combs.
On July 22, 2014, Colorado Cebado and Segura Flores were each sentenced to a year and a day in federal prison and ordered to pay a $10,000 fine for their roles in the scheme.
This case was investigated by the FBI and IRS-Criminal Investigation.
Final Defendant Sentenced in Odessa Credit Union ATM Theft CaseRead the Press Release
In Midland today, U.S. District Judge Robert A. Junell sentenced 25–year-old Jordan Reese Brashear of Odessa, to 33 months in federal prison for robbing a local credit union ATM announced Acting United States Attorney Richard L. Durbin, Jr., and Federal Bureau of Investigation (FBI) Special Agent in Charge Douglas E. Lindquist, El Paso Division.
In addition to the prison term, Judge Junell ordered that Brashear pay, jointly and severally with co-defendants, $30,262.60 restitution and be placed on supervised release for a period of three years after completing his prison term. Brashear’s co-defendants, 35-year-old Kelly Lee Harjo and 48–year-old Steven Lee Holstead, received two-year federal prison terms for their roles in the ATM theft. All three pleaded guilty to a charge of theft of credit union property.
According to court records, the three defendants used a forklift to steal an ATM from the Complex Community Credit Union on March 5, 2014. The defendants managed to steal over $30,000 from inside the ATM.
This case was investigated by the Federal Bureau of Investigation (FBI) together with the Odessa Police Department. Assistant United States Attorney John Klassen prosecuted this case on behalf of the Government.
Federal and State Authorities Arrest 23 Individuals Today in Relation to Cocaine and Methamphetamine Distribution Operations in Permian BasinRead the Press Release
In Midland and Odessa this morning, authorities arrested 23 individuals on federal drug and firearms charges announced Acting United States Attorney Richard L. Durbin, Jr., Drug Enforcement Administration Special Agent in Charge Will Glaspy, El Paso Division, and Midland Police Chief Price Robinson.
Federal grand jury indictments returned yesterday charge 21 of those arrested, as well as five other individuals who were already in custody prior to today and seven who are still at large, for alleged drug trafficking offenses or federal firearms violations stemming from two separate investigations. Two arrested today were charged by federal criminal complaints filed this morning. A complete list of defendants is below.
In the Cortez investigation, authorities arrested 14 individuals, including 30–year-old ringleader Andrew Cortez of Midland. Cortez is a partial owner and operator of a family business called “Alfredo’s Paleteria” with stores in Midland, Odessa, San Angelo and Fort Stockton. Authorities allege that Cortez, along with his 32-year-old brother, Albert Cortez, used the business operation as fronts for cocaine distribution. According to court records, the defendants allegedly conspired since February 2014 to possess with intent to distribute more than five kilograms of cocaine.
In the Derington investigation, authorities arrested a total of nine individuals on federal drug charges, including ringleader 33-year-old Brandon Derington of Midland. Authorities allege that Derington and the other defendants conspired since February 2014 to possess methamphetamine with intent to distribute it throughout the Permian Basin area. Ruben Long, a 35-year-old Midland resident who was also arrested today, is charged by federal indictment with being a convicted felon in possession of a firearm. Tiffany Thetford, age 26 of Odessa, and Michael Johnson, age 58 of Odessa were two non-indicted individuals arrested this morning in connection with the Derington investigation. Both have been charged by federal criminal complaints following their arrests. Thetford is charged with being a felon in possession of a firearm; Johnson, possession with intent to distribute methamphetamine.
During these investigations, authorities have seized 1.5 kilograms of cocaine, 1.5 kilograms of methamphetamine, 12 firearms, approximately $127,000 in U.S. Currency as well as two additional money seizures of unknown quantity.
“Today’s enforcement operations dismantled two separate but significant drug trafficking organizations involved in the distribution and trafficking of cocaine and methamphetamine in the Permian Basin. Jointly, through the hard work and dedication of our agents along with our federal, state and local law enforcement partners, these criminal organizations will now face west Texas justice,” stated DEA Special Agent in Charge Will Glaspy, El Paso Division.
Upon conviction, the defendants face sentences of between ten years and life in federal prison; between five and 40 years in federal prison; or, up to 20 years in federal prison depending on the amount of controlled substances involved. Thetford and Long each face ten years in federal prison upon conviction of the felon in possession charge. All of the defendants remain in federal custody. Detention hearings are scheduled for February 3, 2015, and February 9, 2015, in Midland before United States Magistrate Judge David Counts.
These federal charges and arrests resulted from investigations conducted by the Drug Enforcement Administration (DEA), Midland Police Department and the Ector County Sheriff’s Office together with the Federal Bureau of Investigation (FBI), Homeland Security Investigations (HSI) and the Midland County Sheriff’s Office. The United States Marshals Service and the Texas Department of Public Safety (DPS) Air Support Unit assisted in making today’s arrests. These matters are being prosecuted by Assistant United States Attorney Brandi Young.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
Cortez investigation defendants
Name Age Residence Charge Exposure
*Andrew Cortez 30 Odessa Conspiracy to PWITD Cocaine 10 years to life
*Jose Dominguez 37 Midland Conspiracy to PWITD Cocaine 5 to 40 years
*Daniel Yearicks 32 Midland Conspiracy to PWITD Cocaine up to 20 years
*Guillermo Borunda 19 Midland Conspiracy to PWITD Cocaine up to 20 years
*Manuel Valensuela 43 Odessa Conspiracy to PWITD Cocaine up to 20 years
*Albert Cortez 32 Odessa Conspiracy to PWITD Cocaine up to 20 years
*Fidel Segura 23 Midland Conspiracy to PWITD Cocaine up to 20 years
*Benito Sanchez 44 Midland Conspiracy to PWITD Cocaine up to 20 years
*Ramiro Castillo 56 Midland Conspiracy to PWITD Cocaine up to 20 years
*Jose Valenzuela 39 Odessa Conspiracy to PWITD Cocaine up to 20 years
*Curtis White 28 Midland Conspiracy to PWITD Cocaine up to 20 years
*Raul Saldana 22 Odessa Conspiracy to PWITD Cocaine 10 years to life
*Jose Gardea 25 Odessa Conspiracy to PWITD Cocaine 10 years to life
*Miriam Saenz 30 Odessa Conspiracy to PWITD Cocaine up to 20 years
**Avelardo Castillo 25 Stanton, TX Conspiracy to PWITD Cocaine up to 20 years
***Alejandro Esquivel 40 Odessa Conspiracy to PWITD Cocaine 10 years to life
***Gabriel Miller 30 Denver City Conspiracy to PWITD Cocaine 5 to 40 years
***Paul Hicks 34 Midland Conspiracy to PWITD Cocaine 10 years to lifeDerington investigation defendants
Name Age Residence Charge Exposure
*Brandon Derington 33 Odessa Conspiracy to PWITD Meth 10 years to life
*Chris Wayne Grimes 41 Odessa Conspiracy to PWITD Meth 10 years to life
*Steven Egge 45 Odessa Possess w/Intent To Distribute Meth up to 20 years
*John Steven Renfro 48 Big Spring, TX Conspiracy to PWITD Meth up to 20 years
*Jeffrey Lynn Lane 52 Odessa Conspiracy to PWITD Meth up to 20 years
*Lacy Brooks 32 Odessa Conspiracy to PWITD Meth up to 20 years
*Ruben Long 35 Odessa Felon in possession of firearm 10 years
*Michael Johnson 58 Odessa Possess w/Intent To Distribute Meth up to 20 years
*Tiffany Thetford 26 Odessa Felon in possession of firearm 10 years
**Sherry Ledford 44 Midland Conspiracy to PWITD Meth up to 20 years
**Olivia Ramon 18 Odessa Conspiracy to PWITD Meth 10 years to life
**Juan Martin Arteaga 44 Odessa Conspiracy to PWITD Meth 10 years to life
**Eddie Herbert Alviso 62 Riverside, CA Conspiracy to PWITD Meth 10 years to life
***Bryant Douglas Black 50 California Conspiracy to PWITD Meth 10 years to life
***Danny Ray Blakely 28 Odessa Conspiracy to PWITD Meth up to 20 years
***Wesley Williford 41 Odessa Conspiracy to PWITD Meth up to 20 years
***Ruben Mancha 53 Andrews, TX Possess w/Intent To Distribute Meth up to 20 years* Arrested today
** Already in custody prior to today
*** FugitiveBusinessman Sentenced in El Paso for Small Business Administration Contract Fraud SchemeRead the Press Release
In El Paso today, U.S. District Judge Philip R. Martinez sentenced Thomas Gregory Harris of Friendswood, TX, to two years in federal prison for his scheme to defraud the Small Business Administration (SBA) with respect to “Section 8(a) program” contracts announced Acting United States Attorney Richard L. Durbin, Jr., and Federal Bureau of Investigation (FBI) Special Agent in Charge Douglas E. Lindquist, El Paso Division.
In addition to the prison term, Judge Martinez ordered that the former Sr. Vice President for Luster National Inc., pay a $25,000 fine and a $1,600 special assessment. Judge Martinez also ordered that Harris be placed on supervised release for a period of three years after completing his prison term. Harris must surrender by March 3, 2015, to begin serving his prison term.
The SBA administers a program pursuant to the Small Business Act called the “Section 8(a) program” that is intended to promote the business development of companies owned and operated by “socially and economically disadvantaged individuals.” In that program, certain government contracts are sometimes set aside for performance by so-called “8(a) concerns,” that is, business entities whose owners/operators the SBA has determined meet the criteria for being "socially and economically disadvantaged."
In July 2010, the SBA approved a joint venture, called Tropical Luster Joint Venture ("TLJV"), between two business entities: Tropical Contracting, LLC ("Tropical"), which is based in San Antonio, and Luster National, Inc. ("Luster"), which has offices in Houston and California. The SBA had approved Tropical as an 8(a) concern in 2009. Luster was not a qualifying 8(a) concern.
Evidence presented during trial revealed that in 2010 and 2011, Harris, unbeknownst to the SBA, used Tropical’s qualifying 8(a) status to obtain three restricted contracts awarded by the SBA.
In 2011, the SBA awarded Harris and TLJV the “Net Zero contract” at Fort Bliss in El Paso to design and implement a written plan to reduce energy consumption at the base. In January 2012, the U.S. Army paid TLJV approximately $492,000 as compensation for work on the Net Zero contract.
In 2010 and 2011, the SBA awarded Harris and TLJV two separate contracts with the U.S. Army Corps of Engineers (USACE) in Galveston, TX for project management duties as assigned by USACE. From 2010 to 2012, USACE paid TLJV approximately $895,000 as compensation for work on USACE projects.
In all three matters, Tropical, the 8(a) concern, did not manage and control TLJV's performance of the contracts as required by law. In fact, personnel associated with Tropical did no work whatsoever on the contracts. Harris managed and controlled TLJV's entire performance of the contracts. Luster personnel, or subcontractors Luster retained, did all of the work. Had the SBA known that Tropical was not managing and controlling TLJV's work on any of the contracts, it would have disqualified TLJV as an approved 8(a) joint venture, which would have rendered it ineligible for the contracts to perform the work at Fort Bliss or USACE in Galveston.
On September 17, 2014, a federal jury in El Paso convicted Harris of 16 counts of wire fraud.
“Today’s sentencing of Mr. Harris demonstrates the FBI’s dedication and unwavering commitment to investigate and bring to justice those individuals involved in corruption within our community. The FBI will continue to hold accountable vendors and public servants who illegally and unfairly obtain public contracts for their own interests, depriving their constituents of honest services,” stated FBI Special Agent in Charge Douglas E. Lindquist.
This case was investigated by the Federal Bureau of Investigation (FBI) together with the United States Army Criminal Investigation Command, Major Procurement Fraud Unit. Assistant United States Attorneys John Klassen and Gregory McDonald prosecuted this case on behalf of the Government.
Monahans Man Pleads Guilty in Oil Theft SchemeRead the Press Release
In Midland, 33-year-old David Wayne Schroeder of Monahans, TX, faces up to ten years in federal prison for theft of approximately $58,000 worth of oil announced Acting United States Attorney Richard L. Durbin, Jr., and FBI Special Agent in Charge Douglas E. Lindquist, El Paso Division.
Appearing yesterday before United States Magistrate Judge David Counts, Schroeder pleaded guilty to three counts of theft from an interstate shipment. By pleading guilty, Schroeder admitted that on three separate occasions in November and December 2013, Schroeder stole oil from different Permian Basin companies. On November 13, 2013, Schroeder admittedly stole a truckload of oil from Williams Oil Company in Crane County and delivered it to Itero Energy’s site in Monahans for payment. On November 27, 2013, Schroeder admittedly stole a truckload of oil from Devon Energy in Crane County and delivered it to Itero for payment. The estimated value of each load of stolen oil is $10,000.
The final incident, according to court records, occurred during the evening hours of November 30, 2013, and into the early morning hours of December 1, 2013, when Schroeder admittedly used a stolen vacuum truck and trailer to steal five tankerloads (approximately 520 barrels) of oil from a Whiting Petroleum lease in Ward County. Schroeder delivered the stolen oil to Itero for payment. A Ward County Sheriff’s deputy dispatched to investigate a possible stolen vacuum truck on Itero’s site witnessed Schroeder off-loading oil and attempted to question him. After a brief altercation with the deputy, Schroeder managed to flee the scene in a stolen vehicle, but was apprehended later that morning in Monahans. Investigators discovered Schroeder had left four tickets each documenting a separate tanker load delivered to Itero’s site. In the normal course of business, the tickets would have justified and likely led to Itero’s payment for the oil deliveries.
Schroeder remains in federal custody pending sentencing scheduled for April 10, 2015, in Midland before U.S. District Judge Robert A. Junell.
This investigation was conducted by the FBI’s Permian Basin Oilfield Theft Task Force, which consists of federal agents as well as law enforcement officers from the Midland County Sheriff’s Office and the Andrews County Sheriff’s Office. Assistant United States Attorney John Klassen is prosecuting this case on behalf of the Government.
Jury Convicts Three Gang Members and A Former El Paso County Juvenile Probation Officer of Federal Sex Trafficking ChargesRead the Press Release
In El Paso, a federal jury convicted four Folk Nation/Gangster Disciples members, one of whom was a former juvenile probation officer, of federal sex trafficking charges announced Acting United States Attorney Richard L. Durbin, Jr., Homeland Security Investigations (HSI) Special Agent in Charge Waldemar Rodriguez and Federal Bureau of Investigation (FBI) Special Agent in Charge Douglas E. Lindquist, El Paso Division.
On Friday, jurors returned guilty verdicts against gang members Deion Lockhart, age 26, Richard Gray, age 25, and Emmanual Lockhart, age 24, and Timothy McCullouch, Jr. a 29-year-old former El Paso County juvenile probation officer of one count of conspiracy to commit sex trafficking of persons. Jurors also convicted: Deion Lockhart of one count of sex trafficking by force, fraud and coercion and one count of aiding and abetting sex trafficking of children; Richard Gray, one count of sex trafficking by force, fraud and coercion, one count of sex trafficking of children and one count of transportation for prostitution; and, Timothy McCullouch, one count of sex trafficking of children.
Testimony during trial revealed that between May 2012 and March 2013, the defendants were involved in the forced prostitution of juveniles and adults by the Folk Nation/Gangster Disciples street gang. The defendants used a combination of force, fraud, and coercion to compel their victims to engage in sexual activities for money in El Paso; Killeen, TX; Albuquerque, NM; Las Vegas, NV; and, in Colorado.
Each defendant faces up to life in federal prison. Sentencing is scheduled for April 2015, before U.S. District Judge Philip R. Martinez.
Two fellow gang members and co-defendants pleaded guilty prior to trial. In May of last year, Tai Von Lynch and Brandon Shapiro pleaded guilty to conspiracy to commit sex trafficking of persons. On October 28, 2014, Lynch was sentenced to 15 years in federal prison followed by five years of supervised release and ordered to pay a $2,500 fine. Shapiro, who remains in custody, is awaiting sentencing scheduled for February. He faces an agreed sentence of five years in federal prison.
In a separate, but related matter, Folk Nation/Gangster Disciples members Kiry Hakeem Nalls, age 25, and Grant Rutledge, age 25, were sentenced to federal prison for their roles in a forced prostitution scheme. In April 2014, Nalls was sentenced to ten years in federal prison followed by five years of supervised release and fined $2,500 after pleading guilty to one count of forced labor. In March 2014, Rutlege was sentenced to ten months in federal prison followed by five years of supervised release and fined $500 after pleading guilty to one count of misprision of felony.
These task force investigations were conducted by the ACTeam (Anti-Trafficking Coordination Team) comprised of personnel from Homeland Security Investigations (HSI), Federal Bureau of Investigation (FBI), U.S. Department of Labor and the United States Attorney’s Office together with the El Paso Police Department Gang Unit and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
“This verdict is a major victory for HSI and its law enforcement partners within the ACTeam,” said HSI Special Agent in Charge Waldemar Rodriguez. “HSI plans to employ its ample authority, resources and resolve to investigate human trafficking activity in our community, identify and rescue victims, and bring traffickers to justice."
“The FBI has a zero tolerance on Human Trafficking and all traffickers, whether gang members or government employees, and will be aggressively pursued and held accountable,” stated FBI Special Agent in Charge Douglas E. Lindquist.
Assistant United States Attorneys Rifian Newaz and Robert Almonte are prosecuting these cases on behalf of the Government.
Former Denver City Councilman Sentenced to Five Years in Federal Prison for Role in Midland-Based Heroin and Meth Distribution RingRead the Press Release
In Midland today, U.S. District Judge Robert A. Junell sentenced 50-year-old former Denver City (TX) councilman Joe Anthony Kay to five years in federal prison for his role in a Midland-based heroin and methamphetamine distribution ring, announced Acting United States Attorney Richard L. Durbin, Jr., Midland Police Chief Price Robinson and Texas Department of Public Safety Director Steve McCraw.
In addition to the prison term, Judge Junell ordered that Kay be placed under supervised release for a period of five years after completing his prison term.
On August 31, 2014, state and local authorities arrested Kay based on a federal grand jury indictment charging him with one count of conspiracy to possess with intent to distribute controlled substances. Kay pleaded guilty to the charge on September 16, 2014. By pleading guilty, Kay admitted that from June 2010 to April 2014, he conspired with others to distribute narcotics in the Midland, Odessa, and Denver City areas. According to court records, Kay conspired to distribute 20 kilograms of cocaine, 2 kilograms of heroin, 1 kilogram of methamphetamine, and 100 pounds of marijuana.
Kay is the last of seven defendants to be convicted and sentenced for their roles in this drug trafficking scheme. Yesterday, Judge Junell sentenced drug supplier Luis Jose Tarango Terrazas, age 51, of Fabens, TX, to 70 months imprisonment. Last month, Judge Junell sentenced 42–year-old Michael Alexander Lozano of Denver City, and 46–year-old William Ray Warren of Midland, each to ten years imprisonment; 30-year-old Cameron Edward Gee of Midland, to 71 months imprisonment; 31-year-old Quentin Zachery Bailey of Odessa, to 46 months imprisonment; and, 24-year-old Merin James McCulley of Seagraves, TX, to two years imprisonment.
This investigation was conducted by the Midland Police Department together with the Texas Department of Public Safety. Assistant United States Attorney Austin Berry prosecuted this case on behalf of the Government.
Physician-Owned Forest Park Medical Center to Pay $215,000 to Resolve Kickback Allegations Under Civil Settlement with United StatesRead the Press Release
Forest Park Medical Center, LLC (“FPMC”), a physician-owned hospital located in Dallas, Texas, will pay $215,000 under a civil settlement with the United States Department of Justice, announced Acting United States Attorney Richard L. Durbin, Jr. The settlement resolves allegations that the hospital paid kickbacks in exchange for referrals of patients covered by the federal workers’ compensation program, known as FECA.
FECA, a federal health care program administered by the United States Department of Labor (“DOL”), provides workers’ compensation benefits to federal workers who suffer job-related injuries. The program covers roughly 3 million federal civilian and postal employees. Benefits include payment of a covered worker’s medical and rehabilitation expenses. DOL uses federal funds to reimburse health care providers that treat injured workers covered by FECA.
The Department of Justice investigated whether FPMC violated the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), and submitted false claims for reimbursement to the FECA program in violation of the False Claims Act, 31 U.S.C. §§ 3729-3733. Between August 1, 2011 and March 1, 2012, FPMC caused payments to be made to individuals and entities located in the Western District of Texas for “marketing” and “management” services. The United States contends that these payments were, in reality, unlawful kickbacks made in exchange for the referral of patients covered by FECA in violation of the Anti-Kickback Statute. The United States further contends that, by billing the FECA program for services rendered to patients whose referrals were secured through kickbacks, FPMC submitted false claims for payment to the DOL in violation of the False Claims Act, which provides for treble damages and civil penalties.
Under the settlement announced today, FPMC will pay $215,000 to resolve the hospital’s potential False Claims Act liability. The settlement, which follows an earlier resolution reached with the United States Attorney’s Office for the Northern District of Texas regarding claims submitted to the TRICARE program, is not an admission of liability by FPMC or its affiliates. FPMC cooperated with the government’s investigation.
Acting United States Attorney Durbin commended the efforts of the investigating agencies, including the United States Postal Service -- Office of the Inspector General, United States Army Criminal Investigation Division -- Major Procurement Fraud Unit, Federal Bureau of Investigation, and the United States Department of Labor -- Office of the Inspector General. Assistant United States Attorney John J. LoCurto and Auditor Jamie Cole, CPA handled the investigation for the United States Attorney’s Office.
Federal Jury Convicts Mexican Citizen Living in San Antonio for His Role in Kidnapping SchemeRead the Press Release
In San Antonio today, a federal jury convicted 36-year-old Agustin Sergio Deleon Garza for his role in the kidnapping of a Mexican businessman in December 2013 announced Acting United States Attorney Richard L. Durbin, Jr., Special Agent in Charge Christopher Combs of the FBI’s San Antonio Division and Special Agent in Charge Joseph M. Arabit of the DEA’s Houston Division.
The jury found Deleon Garza guilty of one count of conspiracy to kidnap; one count of aiding and abetting kidnapping; two counts of receipt of ransom money; one count of interstate communication of ransom; one count of conspiracy to commit money laundering; and, one count of aiding and abetting money laundering.
Evidence presented during trial revealed that on December 27, 2013, Jorge Luis Martin Cavazos Cantu was kidnapped from his Monterrey, Mexico residence by several men. While Cantu was in the custody of his abductors in Mexico, Deleon Garza placed several phone calls from Bexar County to Cantu’s family seeking ransom. In each call, Deleon Garza used a cellphone app which disguised his voice and his location. Cantu was released on January 29, 2014, after a $75,000 ransom was paid.
Deleon Garza remains in federal custody pending sentencing. He faces up to life in federal prison when he is sentenced on March 30, 2015, by visiting Senior U.S. District Judge Royce Lamberth in San Antonio.
This case was investigated by special agents with the Federal Bureau of Investigation (FBI) and the Drug Enforcement Administration (DEA) in San Antonio and in Mexico (Monterrey and Mexico City) in cooperation with the State of Nuevo León anti kidnapping unit and the attorney general's office in Monterrey. Assistant United States Attorney Erica Benites Giese is prosecuting this case on behalf of the Government.
San Antonio Man Sentenced to 70 Months in Federal Prison for Receipt of Child PornographyRead the Press Release
In San Antonio today, U.S. District Judge Orlando Garcia sentenced 43-year-old Raul Salazar to 70 months in federal prison followed by a 20 years of supervised release for receipt of child pornography announced Acting United States Attorney Richard L. Durbin, Jr., and Homeland Security Investigations (HSI) Special Agent in Charge Janice Ayala.
On August 28, 2013, federal and state authorities executed a search warrant at the defendant’s residence. An analysis of computer related equipment collected by authorities revealed that on August 25, 2013, Salazar downloaded and viewed over 150 images depicting child pornography. On March 3, 2014, Salazar pleaded guilty to the receipt of child pornography charge.
“By conducting these types of investigations, HSI is taking child predators off the Internet, off the streets, and putting them behind bars,” said Special Agent in Charge, Janice Ayala, HSI San Antonio. “Targeting these crimes against children is a high priority for HSI. We will continue to dedicate law enforcement resources to identify and bring to justice child predators that traumatize and victimize children.”
This investigation was conducted by HSI together with the Texas Department of Public Safety. Assistant United States Attorney Tracy Thompson prosecuted this case on behalf of the Government.
Three Permian Basin Business Owners and Title Company Executive Sentenced for Their Roles in Multi-Million Dollar Mortgage Fraud SchemeRead the Press Release
In Midland, three former Permian Basin business owners and a title company executive were sentenced this afternoon for their roles in a mortgage fraud scheme that involved approximately 800 real estate properties and about $45 million in loans announced Acting United States Attorney Richard L. Durbin, Jr., and Federal Bureau of Investigation Special Agent in Charge Douglas E. Lindquist, El Paso Division.
This afternoon, United States District Judge Robert A. Junell sentenced:
- Stephen Mark Hilliard, age 59, owner of Comeback Properties, LLC, Hilliard Properties, LLC, SMH Properties, LTD, and Katpast Enterprises, LP, to three years in federal prison followed by four years of supervised release. On August 12, 2014, Hilliard pleaded guilty to one count of conspiracy to commit bank fraud and one count of conspiracy to commit money laundering;
- Michael Duraine Cowan, II, age 43, owner of TLC Properties, LLC, and MCBW Properties, LTD, to three years in federal prison followed by four years of supervised release. On August 5, 2014, Cowan pleaded guilty to one count of conspiracy to commit bank fraud and one count of conspiracy to commit money laundering;
- Berta Laura McFaddin, age 56, former Division Vice President of Administration for Stewart Title Company in Midland, to one year and one day in federal prison followed by four years of supervised release. Judge Junell also ordered McFaddin to pay a $25,000 fine. On July 29, 2014, McFaddin pleaded guilty to one count of conspiracy to commit bank fraud; and,
- Cynthia Gayle Hirsch, a 62-year-old Odessa real estate agent, to five years probation including one year of home confinement and ordered to complete 300 hours of community service. On August 12, 2014, Hirsch pleaded guilty to one count of conspiracy to commit bank fraud.
As part of the plea agreements, Judge Junell ordered Hilliard to pay a $1 Million money judgment; Cowan to pay a separate $1 Million monetary judgment; and, Hirsch to pay a $100,000 monetary judgment. Also, Hilliard forfeited to the Government a 2009 Lincoln MKX, 2003 Mercedes Benz SL500R, 2004 GMC Yukon, and two 2006 Yamaha Waverunners. These monetary amounts and property represented the proceeds derived from their fraudulent scheme.
According to court records, from March 2003 until August 2011, the defendants were involved in a fraudulent “same-day property flip” scheme. Admittedly, Hilliard and Cowan purchased a property utilizing one of their respective investment companies, and then re-sold the same property on the same day at an “inflated” sales price to another one of their investment companies.
In order to substantiate inflated prices, Hirsch admittedly created a Broker’s Price Opinion for each property in the amount directed by Hilliard or Cowan. McFaddin, admittedly, assisted in the completion of HUD-1 forms on the same-day property flips. Hilliard and/or Cowan obtained mortgage loans by submitting to the bank fraudulent and misleading documentation created by the defendants and without disclosing to the bank the initial sale of the property.
“Today’s sentencings culminate a multi-million dollar mortgage fraud scheme which was investigated over several years. The success of this investigation relied heavily on interagency cooperation between the FBI, Texas Department of Insurance and various private sector entities. The diligence displayed by investigators and professional staff proved to Midland area residents this type of crime will not be tolerated during the economic growth being experienced in the surrounding communities,” stated FBI SAC Douglas E. Lindquist.
Assistant United States Attorney Austin Berry prosecuted this case on behalf of the Government.
El Paso Couple Sentenced to Federal Prison for Inducing Foreign or Interstate Travel for ProstitutionRead the Press Release
In El Paso today, 45-year-old Maria Blake (aka “Jessica”, “Yvonne”) and her 45–year-old husband, Ronald, were sentenced to 30 months and six months in federal prison respectively inducing foreign or interstate travel for prostitution announced Acting United States Attorney Richard L. Durbin, Acting Homeland Security Investigations (HSI) Special Agent in Charge Tom Hernandez and Federal Bureau of Investigation (FBI) Special Agent in Charge Douglas E. Lindquist.
In addition to the prison terms, United States District Judge Kathleen Cardone ordered that Maria Blake pay a $1,000 fine and be placed under supervised release for a period of ten years after completing her prison term. Judge Cardone also ordered that Ronald Blake pay a $500 fine, remain under home confinement for six months and be placed under supervised release for a period of ten years after completing his prison term. Furthermore, Judge Cardone ordered that the defendants’ residence located in the 2400 block of Tierra Nueva in El Paso be forfeited to the Government as it was used to facilitate their prostitution scheme.
In October 2014, both defendants pleaded guilty to one count of aiding and abetting coercion and enticement. By pleading guilty, the Blakes admitted that from July 2011 until January 2013, they ran a prostitution service whereby they knowingly persuaded, or attempted to persuade, approximately five females to travel from Juarez to El Paso to engage in sexual activity for financial gain.
The Blakes were arrested based on an investigation initiated by the El Paso Anti-trafficking Coordination Team (ACT Team). The ACT Team is a human trafficking task force composed of members from the FBI, HSI and the Department of Labor.
“The ACT Team is an effective and efficient law enforcement force multiplier by which we can identify, arrest and prosecute criminals involved in luring and prostituting young women,” said Acting HSI SAC Hernandez. “Criminal networks that may have operated in our region and gone undetected before are on our radar now.”
Assistant United States Attorney Rifian Newaz prosecuted this case on behalf of the Government.
For-Profit College Kaplan to Refund Federal Financial Aid Under Settlement with United StatesRead the Press Release
Over $1 Million will be paid in the form of tuition refunds for 289 students
Kaplan Higher Education (“Kaplan”), a leading for-profit education company with campuses located throughout the country, will pay roughly $1.3 million under a civil settlement with the United States Department of Justice. The settlement resolves whistleblower allegations that the company employed unqualified instructors at its campuses in Texas, Acting U.S. Attorney Richard L. Durbin, Jr. announced today.
Kaplan operates for-profit colleges on several campuses in Texas, including Kaplan College – San Antonio (San Pedro) and Kaplan College – San Antonio (Ingram). These campuses offer a mix of degree and diploma programs, such as a Medical Assistant Diploma program designed to train students for entry-level positions in the health care field. Many of Kaplan’s students receive financial assistance under federal programs that help eligible students obtain higher education. These federal programs, authorized under Title IV of the Higher Education Act of 1965 (“Title IV”), include the Federal Pell Grant Program, Federal Direct Loan Program, and Federal Family Education Loan Program, among others.
The Department of Justice began investigating Kaplan after a whistleblower, Leslie Coleman, filed a qui tam lawsuit under the False Claims Act accusing Kaplan of employing unqualified instructors to teach Medical Assistant courses at its San Antonio campuses. The suit alleged that Kaplan knowingly requested, received, and retained federal tuition funds for courses taught by individuals who did not meet the minimum requirements established by Texas law. Following the United States’ investigation, the parties negotiated a settlement pursuant to which Kaplan will pay $1,329,753.25 to resolve the whistleblower claims. The majority of the settlement – roughly $1,077,000 – will be paid in the form of tuition refunds. These refunds will benefit 289 students, whose student loan debt will decrease as a result of the settlement.
Kaplan fully cooperated with the government’s investigation and negotiated the settlement in good faith, stated Acting U.S. Attorney Durbin. The settlement is not an admission of liability by Kaplan or its affiliates.
The Department of Education Office of Inspector General (DOE-OIG) and the U.S. Attorney’s Office for the Western District of Texas investigated the allegations raised in the whistleblower suit captioned United States ex rel. Leslie Coleman v. Kaplan, Inc., The Washington Post Company, Kaplan Higher Education Corporation, Kaplan College – San Antonio (San Pedro) and Kaplan College – San Antonio (Ingram), no. SA:12-cv-0459-FB (W.D. Tex.) DOE-OIG Special Agent Edd Cole, Assistant U.S. Attorney John J. LoCurto, and ACE Auditor Jamie Cole, CPA handled the investigation for the Government.
Individuals who suspect Title IV fraud, waste, or abuse are encouraged to report their information to the Department of Education by calling the Inspector General’s fraud hotline at 1-800-MIS-USED.
LaVernia Restaurant Operator Pleads Guilty to Immigration Document Fraud SchemeRead the Press Release
In San Antonio today, 49–year-old Yolanda Hernandez de Arteaga, the former operator of the Los Compadres Restaurant in LaVernia, TX, pleaded guilty to federal charges in connection with the execution of a fraud scheme for financial benefit which targeted individuals seeking legitimate immigration documents announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent in Charge Christopher Combs, San Antonio Division.
Appearing before Chief U.S. District Court Judge Fred Biery this morning, Arteaga pleaded guilty to one count of conspiracy to commit wire fraud and five substantive counts of wire fraud.
By pleading guilty, Arteaga admitted that from October 2010 through December 2012, she and her co-defendant, 56–year-old Maria de Lourdes Montano-Vicencio, an undocumented alien living in Houston, initiated a series of financial fraud schemes including numerous incidents of wire fraud whereby they would induce vulnerable immigrants in the LaVernia area into giving them money in exchange for securing legal immigration status documents. In the schemes, the defendants claimed to have personal contacts with immigration authorities who could provide each victim with items such as a social security card, a resident alien car and a work permit in about six months-time. It was part of the scheme that the defendants did not provide any documents to the undocumented aliens. During the time of the conspiracy, the defendants collected over $100,000 from more than 60 immigrants desperate for legal immigration status documents. When the victim-immigrants became angry because they never received any documents or refunds, the defendants threatened to notify immigration authorities and facilitate the deportation of the immigrants if the victims made trouble. During the scheme, Arteaga wired proceeds from the scheme from LaVernia to Montano-Vicencio in Houston via Western Union or MoneyGram.
Arteaga, who is on a $25,000 bond and confined to her residence pending sentencing, faces up to 20 years in federal prison. The federal government is also seeking a $150,000 monetary judgment against the defendants representing the proceeds derived from their alleged scheme.
Montano-Vicencio, who is in federal custody, is currently awaiting sentencing after pleading guilty to four counts of wire fraud in February of last year. Arteaga and Montano-Vicencio are scheduled to be sentenced on March 6, 2015.
This case resulted from an investigation conducted by the agents with the Federal Bureau of Investigation with assistance from Homeland Security Investigations (HSI), U.S. Border Patrol and the LaVernia Police Department. Assistant United States Attorney Bettina Richardson is prosecuting this case on behalf of the Government.
Four Receive Federal Prison Terms for Role in Firearms Trafficking SchemeRead the Press Release
In San Antonio this morning, four individuals received federal prison terms for their roles in a San Antonio-based firearms trafficking scheme announced U.S. Attorney Robert Pitman, Homeland Security Investigations (HSI) Special Agent in Charge Janice Ayala and Special Agent in Charge Robert Elder, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Houston Division.
Chief U.S District Judge Fred Biery sentenced 40–year-old ringleader Roberto Loera and his brother, 31–year-old Manuel Loera-Cazares each to ten years in federal prison. Judge Biery also sentenced 35–year-old Jose Fedencio Mendez Cadena of San Antonio and 42–year-old Jose Driscoll to four years in federal prison. In addition, Judge Biery sentenced a fifth defendant, 25–year-old Daniel DeLeon, to five years probation.
On October 17, 2014, co-defendants Santos Ligues, III, age 36, and Juan Jose Flores were sentenced to 20 months in federal prison and five years probation, respectively. An eighth defendant, 30-year-old Agustin Aguilar-Torres failed to appear for today’s sentencing. An arrest warrant has been issued for Aguilar-Torres.
All of the defendants entered guilty pleas to various firearms trafficking charges earlier this year. According to court records, from February 2012 until April 2012, the defendants were involved in a firearms trafficking scheme in the Western and Southern Districts of Texas. The scheme involved the purchasing of assault weapons from federal firearms licensees (FFLs) in San Antonio, then obliterating their serial numbers. The defendants would subsequently dismantle the firearms and conceal them inside the I-beams of a pick-up truck in an attempt to smuggle them into Mexico. On April 24, 2012, Frio County Sheriff’s deputies conducted a traffic stop on the truck being driven by Driscoll and seized $50,000 in U.S. Currency as well as five AR-15 assault rifles.
This investigation was conducted by HSI and ATF together with assistance from the Frio County Sheriff’s Office.Former Seguin Businessman Pleads Guilty to Accepting SNAP Benefits for Prohibited ItemsRead the Press Release
In San Antonio today, the former owner of J.M. Food Mart in Seguin, Texas, admitted to collecting approximately $275,000 from a scheme to trade Supplemental Nutrition Assistance Program (SNAP) benefits for ineligible items announced United States Attorney Robert Pitman.
Appearing before United States Magistrate Judge John Primomo this morning, 55-year-old Aijaz Aslam pleaded guilty to one count of wire fraud. By pleading guilty, Aslam admitted that from November 2009 until May 2013, he conducted materially fraudulent transactions by selling ineligible items such as alcohol and tobacco products to SNAP beneficiaries using their Lone Star Cards at the point of sale. Aslam also admitted that he fraudulently traded SNAP benefits for cash while generally charging SNAP beneficiaries up to double the amount of cash received.
Aslam faces up to 20 years in federal prison. He is currently on bond pending sentencing scheduled for March 2, 2015, before United Stated District Judge David A. Ezra.
This case was investigated by the U.S. Department of Agriculture (USDA). Assistant United States Attorney Thomas P. Moore is prosecuting this case on behalf of the Government.Killeen Man Sentenced to Federal Prison for Intimidating WitnessRead the Press Release
Defendant intimidated witness in trial of Killeen brothers convicted of distributing close to 30 kilograms of cocaine
In Waco today, U.S. District Judge Walter S. Smith, Jr., sentenced 33-year-old Carrick Mondale Mango of Killeen, TX, to ten years in federal prison followed by three years of supervised release and ordered him to pay a $1,000 fine for witness tampering announced United States Attorney Robert Pitman, Federal Bureau of Investigation Special Agent in Charge Christopher Combs, San Antonio Division, and United States Marshal Robert Almonte.
On June 12, 2014, Mango pleaded guilty to one count of obstruction of justice and one count of witness tampering. According to court records, on March 6, 2014, during the trial of U.S. v. Cornelius Tywarren Wilson, et al. (W-13-CR-138) in federal court in Waco, Mango approached a trial witness and instructed the witness not to testify against defendant Christopher Wilson. The witness told deputy U.S. Marshals that Mango gave the witness an intimidating look, which made the witness feel threatened and uncomfortable. The witness took the stand during trial and testified but failed to identify Christopher Wilson, even though they were neighbors.
Mango’s intimidation tactics also included accosting the prosecutor trying the case and intentionally following another government witness to the lobby of the United States Attorney’s Office.
On March 10, 2014, the jury found Christopher and his brother, Cornelius Wilson, guilty of multiple drug charges in connection with their cocaine distribution operation based in Killeen. On April 30, 2014, Christopher and Cornelius Wilson were sentenced to 35 years and 30 years in federal prison, respectively.
This case was investigated by the Federal Bureau of Investigation together with the United States Marshals Service. Assistant United States Attorney Greg Gloff prosecuted this case on behalf of the Government.
El Paso Business and Businessowner Charged in Connection with an Alleged Fraud and Trade Based Money Laundering Scheme Associated with Black Market Peso ExchangeRead the Press Release
In El Paso, federal and state authorities have arrested the owner and two employees of ERENE, Inc., (ERENE) for their alleged roles in an estimated $100 million trade based money laundering scheme announced U.S. Attorney Robert Pitman and Homeland Security Investigations (HSI) Acting Special Agent in Charge Tom Hernandez, El Paso Division.
ERENE, doing business as “J&E Sports,” “Rise High Skateshop,” Quicken,” “Quicken Footwear & Accessories,” “Pepes Casual,” “Arise 915,” and “Forward Footwear,” is an El Paso-based business which primarily sells shoes and other goods to U.S. and Mexican-based customers.
A 61–count federal grand jury indictment unsealed today in El Paso, charges ERENE, 52–year-old owner Jose Luis Rodriguez, 40–year-old ERENE Assistant Manager Jorge Penuelas, and 53-year-old ERENE employee Manuel Rodriguez with multiple money laundering conspiracy charges. Other charges alleged in the indictment include smuggling goods from the United States; engaging in monetary transactions in property derived from specified unlawful activity; conspiracy to commit mail and wire fraud; mail fraud; and, wire fraud.
The indictment alleges that since May 2007, Rodriguez on behalf of ERENE, made false and material representations to shoe suppliers that ERENE would only sell their product on a retail bases i.e. to end use consumers. On the basis of this representation, suppliers provided ERENE with millions of dollars in product which was primarily sold on a wholesale basis to Mexican and U.S. based purchasers. Once these goods were obtained, the indictment alleges, ERENE and the Mexican based wholesale purchasers used smugglers or “pasadors” to unlawfully smuggle shoes into Mexico from the United States. Through this method, ERENE and the Mexican based wholesale purchasers avoided tariffs, duties, and fees imposed by the Mexican government on the import of shoes into Mexico. Further, although the goods smuggled into Mexico are sold for pesos, the Mexican based wholesale purchasers paid for a significant majority of those goods with U.S. cash dollars.
The aforementioned schemes generated significant proceeds which the indictment alleges were laundered by the defendants through various means such as the purchase of U.S. Postal money orders.
Trade based money laundering (TBML) is the exploitation of the international trade system, including its financial system, to launder illicit proceeds. A subset of TBML is the Black Market Peso Exchange (BMPE). According to the indictment, criminal organizations are using the BMPE to convert the proceeds of their illegal activities from U.S. dollars to Mexican pesos in order to avoid the risk of smuggling bulk amounts of U.S. Currency across the border; risk detection by having to wire transfer the proceeds; and, to evade Mexican anti-money laundering regulations announced in June 2010 that restrict the amount of physical U.S. currency that Mexican banks may receive.
Generally, the BMPE scheme involves a drug trafficking organization or other criminal organization obtaining large amounts of U.S. dollars through illegal activity. These organizations, either directly or in conjunction with Mexican wholesalers/retailers or other third parties, then use these U.S. cash dollars to purchase goods within the United States, such as shoes. These goods are then brought into Mexico and sold for pesos.
All three defendants, who were arrested yesterday without incident, remain in federal custody pending detention hearings next week. In addition, federal and state law enforcement executed several search warrants yesterday at various locations and seized approximately $600,000 from four bank accounts affiliated with ERENE and Rodriguez as well as approximately 25,000 pairs of shoes with a rough estimated domestic value of $1,125,000.
Each money laundering conspiracy, mail and wire fraud conspiracy, mail fraud and wire fraud charge carries a maximum penalty of 20 years in federal prison upon conviction. Each money laundering and smuggling charge carries a maximum of ten years imprisonment upon conviction.
This investigation is being conducted by the HSI’s Financial Operations & Currency Unified Strikeforce (FOCUS). FOCUS is comprised of investigators from HSI, IRS – Criminal Investigation (IRSCI), U.S. Postal Inspection Service (USPIS), Customs and Border Protection – Office of Field Operations (CBP-OFO) and the El Paso Police Department. The Government of Mexico Servicio de Administracion Tributaria (SAT) also assisted in this investigation. The case is being prosecuted by Assistant United States Attorney Joseph Blackwell.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.San Antonio Texas Mexican Mafia Member Arrested and Charged in Connection with Three MurdersRead the Press Release
In San Antonio this morning, FBI agents arrested 36–year-old Texas Mexican Mafia (TMM) member Ruben Reyes (aka “Menace”) in connection with the alleged murders of three high ranking TMM members announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent in Charge Christopher Combs, San Antonio Division.
A federal criminal complaint filed today charges Reyes, a former TMM “Lieutenant of Lieutenants,” with one count of using or discharging a firearm during a crime of violence, specifically, violent crimes in aid of racketeering (VICAR). According to the complaint, on January 13, 2014, Reyes shot and killed TMM “Captain” Mark Anthony Bernal (aka “Lefty”), TMM “General” Carlos Chapa (aka “Worm”), and TMM “Lieutenant of Lieutenants” Johnny Solis (aka “Smiley”) for their alleged mishandling of approximately $60,000 and making poor decisions in regards to the TMM daily operations. The complaint further alleges that Reyes transported and buried the bodies of Bernal, Chapa and Solis in Pearsall, TX.
Reyes, who remains in federal custody, faces between ten years and up to life in federal prison upon conviction.
This complaint resulted from an investigation conducted by the FBI together with the San Antonio Police Department, Texas Department of Public Safety Criminal Investigations Division, Bexar County Sheriff’s Department and the Texas Department of Criminal Justice.
A criminal complaint is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.
Former Jarrell Police Chief Sentenced to Federal PrisonRead the Press Release
In Austin today, 52-year-old former Jarrell (TX) Police Chief Andres Tomas Gutierrez was sentenced to 54 months in federal prison followed by three years of supervised release for a wire fraud/theft of honest services scheme announced United States Attorney Robert Pitman; Homeland Security Investigations (HSI) Special Agent In Charge Janice Ayala in San Antonio; Department of Homeland Security Office of Inspector General–Investigations Special Agent In Charge J. Kirk Beauchamp in Houston; and Federal Bureau of Investigation Special Agent In Charge Christopher Combs, San Antonio Division.
On February 7, 2014, Gutierrez pleaded guilty to the wire fraud/theft of honest services charge. By pleading guilty, Gutierrez admitted that from the Fall of 2011 to November 2013, he devised a scheme to defraud and deprive the citizens of Jarrell of their right to his honest services through bribery and concealment of information. Gutierrez solicited and accepted cash bribes—between $10,000 and $40,000—from several undocumented aliens in return for requesting and obtaining for the aliens limited immigration benefits that the U.S. government intended and designed for law enforcement purposes. Gutierrez falsely represented to the U.S. government that the undocumented aliens were assisting the Jarrell Police Department with ongoing investigations into narcotics trafficking and human trafficking.
According to court records, individuals unconnected to the City of Jarrell and its Police Department introduced Gutierrez to undocumented aliens who had money to pay for immigration benefits. Gutierrez or the individuals who made the introductions, or both, then met with the aliens and explained the benefits they could receive if they paid certain amounts of money. They lied to the aliens, telling them that the Jarrell Police Department would receive the money and use it to pay for law enforcement operations. They also told the aliens that they would provide information or assistance to the Jarrell Police Department, for use in criminal investigations, in return for the immigration benefits. That was also a lie. Gutierrez never asked the aliens to provide assistance or information in connection with criminal investigations. What Gutierrez asked for and received from the aliens was money.
Furthermore, with the help of the individuals who introduced him to the aliens, Gutierrez simply sold the aliens the benefits. After an alien paid his or her money, Gutierrez would submit to the U.S. government an application for the alien to receive what is known as a Significant Public Benefit Parole, which is a type of immigration status that federal immigration laws make available to aliens who actually assist federal, state and local law enforcement agencies. The Paroles authorize an alien to reside and work in the United States for up to a year, and they can be renewed. The applications that Gutierrez submitted said the aliens were providing assistance with ongoing criminal investigations by the Jarrell Police Department, which was false. Also, Gutierrez never disclosed to the United States government that he was selling the Paroles.
“The sentencing of Andres Gutierrez, the former Jarrell Police Chief, is the culmination of a long-term investigation into corruption and the violation of public trust,” said Special Agent in Charge Janice Ayala of Homeland Security Investigations (HSI) in San Antonio. “This case illustrates the ability of federal law enforcement agencies to leverage resources and work together to achieve justice.”
“Acts of corruption within law enforcement threaten our nation’s system of justice and undermine the honest and hardworking law enforcement personnel who consistently strive to keep that system the best in the world. The Department of Homeland Security will not tolerate corruption, and we will aggressively pursue those who choose to break the law,” stated DHS OIG SAC J. Kirk Beauchamp.
“The FBI will continue to utilize all resources to investigate those who have taken an oath to serve and protect our communities and use their position as a public servant to shield their criminal activities and violate the trust of those they serve,” stated FBI Special Agent in Charge Christopher Combs.
This investigation was conducted by agents with Homeland Security Investigations, Department of Homeland Security Office of Inspector General--Investigations and the Federal Bureau of Investigation. Assistant United States Attorneys Alan M. Buie and Gregg N. Sofer prosecuted this case on behalf of the Government.
Federal Jury Convicts U.S. Army Officer in Connection with Sex Trafficking of Minors SchemeRead the Press Release
In San Antonio today, a federal jury convicted 41-year-old U.S. Army Lieutenant Colonel Raymond Valas of sex trafficking of a minor announced United States Attorney Robert Pitman, Special Agent in Charge Christopher Combs of the FBI’s San Antonio Division and Texas Attorney General Greg Abbott.
The jury found that Valas, a U.S. Army War College fellow at Syracuse University and a member of the New Hampshire National Guard, solicited a minor using the internet for the purpose of engaging in commercial sex. Further, jurors found that Valas knowingly had sex with that minor female in a San Antonio hotel on two occasions in August 2013 while on temporary duty.
Valas faces between ten years and life in federal prison when he is sentenced on February 27, 2015. Following the reading of the verdict, on the motion of the Government, Chief U.S. District Judge Fred Biery remanded Valas into federal custody.
All three of Valas’ co-defendants have been convicted of sex trafficking of minors as a result of this investigation. San Antonio residents Marcus Deshawn Wright, age 38, Malcolm Deandre Copeland, age 22, and Amber Doak, age 20, await sentencing on February 27, 2015.
This case was investigated by the Federal Bureau of Investigation (FBI) together with the San Antonio Police Department. Assistant United States Attorney Bettina Richardson and Special Assistant United States Attorney Geoff Barr from the Texas Attorney General’s Office are prosecuting this case on behalf of the Government.
Western District of Texas U.S. Attorney's Office Collected over $20 Million in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2014Read the Press Release
United States Attorney Robert Pitman announced today that the Western District of Texas (WDTX) collected $20,238,152 in criminal and civil actions in Fiscal Year 2014. Of this amount, $8,945,457.88 was collected in criminal actions and $11,292,694.70 was collected in civil actions.
Additionally, the Western District of Texas worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $12,748,758.80 in civil actions pursued jointly with these offices.
“While convictions and prison terms get a lot of attention, these collections demonstrate that we vigorously pursue justice on behalf of victims and the citizens of the Western District of Texas. These collection figures, together with the asset forfeiture recoveries, show that we will make strong efforts to separate ill-gotten gains from those who violate criminal and civil laws, and hold them fully accountable,” stated United States Attorney Robert Pitman.
In San Antonio, the WDTX collected $450,000 restitution in December from Thomas Shriver. Shriver was sentenced to two years probation and ordered to pay restitution for his role in a Health Care fraud scheme.In July, the WDTX collected $311,000.00 towards defendant Sherri Lynn Brewer’s Court ordered restitution. On August 2, 2013, Brewer was sentenced to serve 15 years of probation and to pay $6,445,370 in restitution for contract procurement fraud against the United States Air Force.
In December, the WDTX collected $178,166.25 from Jimmie Fulton Gibson. Gibson was sentenced to 15 years incarceration followed by a lifetime of supervised release for receipt of child pornography. At sentencing, the Court ordered that Gibson pay a fine for his cost of incarceration at $2,000.00 per month from his military retirement.
In El Paso, the WDTX collected $223,413.80 restitution in January from Albert G. Torres who was convicted of wire fraud and deprivation of honest services and sentenced to 18 months in federal prison for defrauding the City of El Paso with respect to contracts for repairs and service to city garbage trucks.
In Midland, the WDTX collected $100,000 towards restitution in August from Jose Luis Suarez. In June, Suarez was sentenced to 21 months imprisonment and ordered to pay approximately $229,000 restitution for subscribing false tax returns.
In November 2013, the WDTX collected $84,000 from Tammie Stephens following her conviction for wire fraud. At sentencing, the Court ordered Stephens to pay $84,000 restitution for embezzling from her employer, Big Lake Service.
In April, the WDTX collected $43,872.14 towards restitution from Brantten Rhodes. Last November, Brantten was sentenced to two years in federal prison and ordered to pay $235,300 for stealing copper wire from oilfield drilling rigs.
In Austin, the WDTX collected $61,000 towards restitution in March from Christina Newsome. On April 15, 2013, Newsome was sentenced to five years probation and ordered to pay $240,132.32 in restitution for a Health Care fraud and money laundering scheme.
In August, the WDTX collected $17,924.61 towards restitution from Manuel Hernandez for defrauding FEMA. Last year, Hernandez was sentenced to five years probation and ordered to pay $30,000 restitution and a $3,000 fine for making a false claim to FEMA that his primary residence was destroyed as a result of the Labor Day 2011 wildfires in Bastrop County.
In Del Rio, the WDTX collected $61,000 restitution in July from John Andrew Cardenas who was convicted of aiding and abetting the preparation and presentation of a false and fraudulent federal tax return.
In Waco, the WDTX collected $20,157.32 towards restitution last month from Jamal and Magdalena Akhter. In August 2013, the Akhters were sentenced to 21 months and 18 months in federal prison, respectively, and ordered to pay $295,737.64 in restitution to the USDA following wire fraud convictions for fraudulently handling SNAP benefits.
In Pecos/Alpine, the WDTX collected $8,800 from Billy Wayne King this year. In August 2010, King was sentenced to 18 months imprisonment and ordered to pay a $10,000 fine for possession of marijuana with intent to distribute. The $8,800 was collected in April, June and October thereby paying off King’s debt in full.
Those cases were reflected in today’s announcement by Attorney General Eric Holder that the Justice Department collected $24.7 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2014. The more than $24 billion in collections in FY 2014 represents nearly eight and a half times the appropriated $2.91 billion budget for the 94 U.S. Attorney’s offices and the main litigating divisions in that same period.
“Every day, the Justice Department’s federal prosecutors and trial attorneys work hard to protect our citizens, to safeguard precious taxpayer resources, and to provide a valuable return on investment to the American people,” said Attorney General Holder. “Their diligent efforts are enabling us to achieve justice and recoup losses in virtually every sector of the U.S. economy. And this result shows the fruits of the Justice Department’s tireless work in enforcing federal laws; in protecting the American people from violent crime, national security threats, discrimination, exploitation, and abuse; and in holding financial institutions accountable for their roles in causing the 2008 financial crisis.”
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Additionally, the U.S. Attorney’s office in the Western District of Texas, working with partner agencies and divisions, collected $10,925,262 in asset forfeiture actions in FY 2014. Forfeited assets deposited into the department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.Three Charged in Eagle Ford Shale Oil Theft CaseRead the Press Release
In Laredo, TX, today, federal authorities arrested 37-year-old Victor Manuel Guerra, Jr., in connection with an alleged theft of Eagle Ford Shale oil announced United States Attorney Robert Pitman; Christopher Combs, Federal Bureau of Investigation (FBI) Special Agent in Charge of the San Antonio Division; and William Cotter, Internal Revenue Service (IRS) Criminal Investigation Acting Special Agent in Charge.
Last month, a federal grand jury in Del Rio, TX, indicted the Laredo resident and two others--49-year-old Juan Martin Bernal of Eagle Pass, TX, and 25-year-old Carlos Samuel Pena of Del Rio--on charges of theft of oil from interstate shipment, wire fraud, and money laundering. Guerra is charged with two counts of theft from interstate shipment, sixty-nine counts of wire fraud and fifty-eight counts of money laundering. Bernal and Pena, who were arrested earlier this month, are both charged with one count of theft from interstate shipment and sixty-nine counts of wire fraud.
The indictment alleges that between January 2011 and August 2014, the defendants devised a scheme to steal oil from energy companies operating in the South Texas’ Eagle Ford Shale, including a company Bernal worked for, Newfield Exploration Company, and Anadarko Petroleum Corporation, a company that employed Pena. Guerra, who owned Las Lomas Vacuum Services and AVG Vacuum Services, provided wastewater removal services from oil field well sites. According to the indictment, Guerra’s trucks had no authority from the Texas Railroad Commission to receive or transport oil. Further, the wastewater trucks were not designed to safely carry and transport oil.
The indictment further alleges that although Guerra’s company had no contract or permission to be on Newfield or Andranko property, Pena and Bernal covertly allowed the wastewater trucks onto the victims’ properties. Instead of removing wastewater from the oil field storage tanks, the drivers, in collusion with Pena and Bernal, would take oil. The pilfered oil was then transported to Guerra’s property where Guerra would sell the stolen product for financial gain to third-party buyers who would pay for the oil via wire transfer.
The indictment also includes a notice of criminal forfeiture wherein the Government is seeking proceeds derived from the fraudulent scheme as well as funds totaling more than $1.5 million, which represents the amount of proceeds obtained, directly or indirectly, as a result of the criminal scheme.
“The vast expanse of the Eagle Ford Shale and the high level of oil and gas drilling and production in the area provide many opportunities for those inclined to cheat and steal. This indictment gives notice that this office will work closely with federal and state law enforcement agencies to vigorously investigate and prosecute those who perpetrate unlawful schemes to exploit the financial opportunities presented in the oil field,” stated United States Attorney Robert Pitman.
“While the theft the defendantsallegedly engaged inresulted in significant losses for two publicly traded companies, this type of criminal activity often harms the American public as well by hindering the creation of new jobs, raising prices for consumers, and depriving communities of tax revenue needed to fund infrastructure and other vital projects,” said Christopher Combs, Special Agent in Charge of the San Antonio Division of the Federal Bureau of Investigation. “The FBI will continue to work side-by-side with our law enforcement partners to investigate and prosecute those who put their greed above the law.”
IRS Criminal Investigation Acting Special Agent in Charge William Cotter said: “No matter how slick a criminal thinks he is, there’s always a trail to follow. In this case, IRS CI Special Agents employed their financial investigative expertise to separate the oil from the water, leading them to Guerra Jr., Bernal, and Pena.”
Upon conviction, the theft and money laundering counts are punishable by imprisonment up to ten years and a fine of $250,000 and the wire fraud counts are punishable by imprisonment up to 20 years and a fine of $250,000.
This indictment resulted from an investigation conducted by agents with the Federal Bureau of Investigation (FBI), Internal Revenue Service (IRS) Criminal Investigation, Texas Attorney General’s Special Investigations Unit, Bexar County District Attorney’s Office, Texas Department of Public Safety, Texas Rangers, Dimmit County Sheriff’s Office, and the Texas Railroad Commission. Assistant United States Attorneys Bryan Nathan Reeves and Timothy Adam Duree are prosecuting this case on behalf of the Government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
Temple Man Sentenced to Federal Prison for Possession of Child PornographyRead the Press Release
In Waco today, 47-year-old James Fudge of Temple, TX, was sentenced to 108 months in federal prison for possession of child pornography announced United States Attorney Robert Pitman and Special Agent in Charge Janice Ayala, Homeland Security Investigations (HSI) in San Antonio.
In addition to the prison term, United States District Judge Walter S. Smith, Jr. ordered that Fudge pay a $1,000 fine and be placed on supervised release for a period of five years after completing his prison term.
On September 18, 2014, Fudge pleaded guilty to possession of child pornography. By pleading guilty, Fudge admitted to being in possession of child pornography and sharing child pornography with others via the Internet. On October 15, 2013, HSI agents executed a search warrant at the defendant’s residence and seized his computer and other related media. A forensics examination of the computer revealed the presence of approximately 970 images depicting child pornography.
"The prevention and investigation of the exploitation of minors is a priority for HSI," said Special Agent in Charge Janice Ayala, HSI San Antonio. "These investigations are pursued by dedicated special agents who not only work with the United States Attorney's Office to bring predators to justice, but work tirelessly to prevent these crimes through extensive outreach and education."
Assistant United States Attorney Greg Gloff prosecuted this case on behalf of the Government.
Killeen Man Sentenced to Federal Prison for Defrauding Soldiers in Loan ScamRead the Press Release
In Waco today, 21-year-old Daniel Lee Rosales of Killeen, TX, was sentenced to two years in federal prison for stealing money from U.S. Army soldiers though a fraudulent loan scam announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent in Charge Christopher Combs, San Antonio Division.
In addition to the prison term, United States District Judge Walter S. Smith, Jr. ordered that Rosales pay $28,180 restitution to his victims and be placed on supervised release for a period of five years after completing his prison term.
On September 4, 2014, Rosales pleaded guilty to one count of false statement on loan or credit application. By pleading guilty, Rosales admitted that in May 2013, he posed as a Sergeant in the First Cavalry Unit at Fort Hood to befriend new Army enlistees and encourage them to apply for signature loans at area banks in order to build up their credit. Rosales further admitted to instructing them to place false residential and marital status information on loan applications in order to increase the loan amount enlistees could receive from the institution. After the loans were obtained and the checks cashed, Rosales insisted on retaining the majority of the loan proceeds, in his words, “for safekeeping.”
This investigation was conducted by the FBI and prosecuted by Assistant United States Attorney Mark Frazier.
Former McLennan County Justice of the Peace Sentenced to Federal Prison on Theft ChargeRead the Press Release
In Waco today, 60-year-old former McLennan County Justice of the Peace Erma Jean Laster Boone was sentenced to 9 months in federal prison in connection with a scheme to steal Social Security Income benefits announced United States Attorney Robert Pitman.
In addition to the prison term, United States District Judge Walter S. Smith, Jr. ordered that Boone pay a $5,000 fine and be placed on supervised release for a period of three years after completing her prison term.
On September 11, 2014, Boone pleaded guilty to theft of Government property. According to court records, Robert Martin Davis died on May 27, 2010, and the defendant was the reporting party on Davis’ death certificate. From Davis’ death until October 2013, the Social Security Administration continued to deposit Social Security benefits, which totaled approximately $63,000, into Davis’ bank account. The defendant had access to Davis’ bank account. Boone admitted to authorities that she spent over $16,000 from Davis’ account on “fixing stuff up around the house.” In March 2014, Boone paid back to the Social Security Administration the money she had fraudulently embezzled and used.
This investigation was conducted by the United States Social Security Administration, Office of Inspector General. Assistant United States Attorney Greg Gloff prosecuted this case on behalf of the Government.
Federal Grand Jury Indicts Monahans Man for Oil Theft SchemeRead the Press Release
In Midland, a federal grand jury returned an indictment charging a Monahans, TX, man in connection with a scheme to steal an estimated $58,000 worth of oil announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent in Charge Douglas C. Lindquist, El Paso Division.
The indictment charges 33–year-old David Wayne Schroeder with three counts of theft from an interstate shipment. The indictment alleges that on three separate occasions in November and December 2013, Schroeder stole oil from different Permian Basin companies. The final incident, according to court records, occurred during the evening hours of November 30, 2013, and into the early morning hours of December 1, 2013, when Schroeder used a stolen vacuum truck and trailer to steal five tankerloads (approximately 520 barrels) of oil from a Whiting Petroleum lease in Ward County. Schroeder delivered the stolen oil to Itero Energy’s site in Monahans for payment. A Ward County Sheriff’s deputy dispatched to investigate a possible stolen vacuum truck on Itero’s site witnessed Schroeder off-loading oil and attempted to question him. After a brief altercation with the deputy, Schroeder managed to flee the scene in a stolen vehicle, but was apprehended later that morning in Monahans. Investigators discovered Schroeder had left four tickets each documenting a separate tanker load delivered to Itero Energy’s site. In the normal course of business, the tickets would have justified and likely led to Itero Energy’s payment for the oil deliveries.
This investigation was conducted by the FBI’s Permian Basin Oilfield Theft Task Force, which consists of federal agents as well as law enforcement officers from the Midland County Sheriff’s Office and the Andrews County Sheriff’s Office. Assistant United States Attorney John Klassen is prosecuting this case on behalf of the Government.
Upon conviction of each theft charge, Schroeder faces up to 20 years in federal prison. Schroeder remains in federal custody pending trial. No trial date has been scheduled.China Spring Man Sentenced to Federal Prison for Waco Bank RobberyRead the Press Release
In Waco today, 51-year-old Milton Lewis Anglin of China Spring, TX, was sentenced to 51 months in federal prison for bank robbery announced United States Attorney Robert Pitman and Christopher Combs, Federal Bureau of Investigation Special Agent in Charge of the San Antonio Division.
In addition to the prison term, United States District Judge Walter S. Smith, Jr. ordered that Anglin pay a $1,000 fine and be placed on supervised release for a period of five years after completing his prison term.
On September 18, 2014, Anglin pleaded guilty to a bank robbery charge admitting that he robbed the First National Bank of Central Texas located on China Spring Road in Waco with a dangerous weapon on January 31, 2014. During the heist, Anglin stole approximately $2,832 from the financial institution. Authorities arrested Anglin on February 3, 2014. He has remained in federal custody since.
This case was investigated by the Federal Bureau of Investigation together with the Waco Police Department. Assistant United States Attorney Greg Gloff prosecuted this case on behalf of the Government.
Vascular Solutions Inc. and Its CEO Charged with Selling Unapproved Medical Devices and Conspiring to Defraud the United StatesRead the Press Release
UPDATE - The defendants in this case, Howard Root and Vascular Solutions Inc., were acquitted of the charges alleged in the indictment described in the press release below.
An indictment was filed today charging Vascular Solutions Inc. (VSI) and its chief executive officer, Howard Root, with selling medical devices without U.S. Food and Drug Administration (FDA) approval and conspiring to defraud the United States by concealing the illegal sales activity. The announcement was made today by Acting Assistant Attorney General Joyce R. Branda for the U.S. Department of Justice’s Civil Division, U.S. Attorney Robert Pitman for the Western District of Texas and Special Agent in Charge Antoinette V. Henry of the U.S. Food and Drug Administration (FDA)’s Office of Criminal Investigations, Metro Washington Field Office. The devices at issue are from VSI's “Vari-Lase” product line, a system designed to treat varicose veins by burning or “ablating” them with laser energy.
Root and VSI are each charged with one count of conspiracy and eight counts of introducing adulterated and misbranded medical devices into interstate commerce. The case is pending in the U.S. District Court for the Western District of Texas.
“These charges involve a deceptive sales campaign led by the CEO of a public company,” said Acting Assistant Attorney General Branda. “The indictment charges that the sales campaign persisted in the face of FDA warnings, a whistleblower’s complaint to the CEO and a failed clinical trial showing that the device was less safe and less effective than a product that had already been approved. We will take action to hold corporations and their leaders responsible when they violate laws intended to protect public health.”
According to the indictment, the Vari-Lase products were cleared by the FDA only for the treatment of superficial veins, but Root and VSI sold them for the ablation, or removal, of “perforator” veins, which connect the superficial vein system to the deep vein system. Because perforator veins come into direct contact with deep veins, treating them with lasers was a more difficult and risky procedure.
Root is charged with leading the illegal sales campaign, which lasted from 2007 until 2014, and conspiring with others to hide it from the FDA. The indictment alleges that Root authorized the campaign after VSI failed to obtain FDA authorization to sell the Vari-Lase system for ablation of perforator veins. The sales campaign is alleged to have ignored FDA concerns about the safety and effectiveness of the procedure and specific warnings from the FDA not to sell Vari-Lase products for treatment of perforator veins. The indictment alleges that, with Root’s approval, the sales continued even after the company sponsored an unsuccessful clinical trial that showed that the Vari-Lase system was less safe and effective than a competing device that the FDA had cleared for perforator vein treatment. According to the indictment, the sales continued even after a whistleblower complained to Root in 2009 and the government told the company about its investigation in 2011.
The indictment also charges VSI and Root with deceiving the FDA. In late 2007, Root decided to launch a special “Short Kit” designed for perforator vein treatment, despite the lack of FDA marketing authorization, by claiming that the product was intended for “short vein segments” or “short veins.” At the same time, the government alleged that internal company documents approved by Root taught the sales force that these terms included perforator veins and urged salespeople to suggest to health care providers that Vari-Lase devices could be used to treat perforator veins. After learning about the government’s investigation, members of the sales force began using the term “short vein segments” in field trip reports to disguise that they were still selling Vari-Lase devices for perforator vein treatment, according to the indictment. Two other members of the sales force are alleged to have misled investigators; in addition, the indictment charges that one member falsely denied his conduct and another tried to scapegoat a low-level salesman.
In July 2014, VSI agreed to pay $520,000 to resolve allegations that it caused false claims to be submitted to federal health programs by marketing the Vari-Lase devices for treating perforator veins. In that civil action, the government alleged that VSI knowingly caused physicians and other purchasers of the Short Kit to submit false claims to federal health care programs for uses of the Short Kit that were not reimbursable.
“FDA is committed to protecting the public health and the integrity of the regulatory system,” said Special Agent in Charge Henry.
The case is being prosecuted by Trial Attorney Timothy Finley of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Bud Paulissen of the Western District of Texas. The case was investigated by the FDA’s Office of Criminal Investigations and the U.S. Department of Health and Human Services’ Office of the Inspector General.
An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Former Fort Bliss Soldier Sentenced to Federal Prison for Stealing Military EquipmentRead the Press Release
In El Paso on Friday, 31-year-old former U.S. Army Sergeant Dexroy Germaine Hamilton was sentenced to six months in federal prison followed by six months home confinement for the illegal importation of International Trafficking in Arms Regulations (ITAR) controlled military equipment valued at approximately $30,000 announced United States Attorney Robert Pitman and Homeland Security Investigations (HSI) Special Agent In Charge Dennis Ulrich.
In addition to the prison term, Senior United States District Judge David Briones ordered that Hamilton perform no less than 100 hours of community service and be placed under supervised release for a period of three years after completing his prison term.
On August 22, 2014, Hamilton pleaded guilty to one count of conspiracy to commit theft of government property and one count of smuggling goods into the United States. By pleading guilty, Hamilton admitted that while on deployment in Afghanistan between July 2013 and March 2014, he conspired with others to steal U.S. military munitions property including optical sights, night vision equipment and infrared lasers, then transport those items to the United States for resale.
On March 20, 2014, HSI agents executed a search warrant at the defendant’s residence in El Paso where they recovered five (5) AN/PVS-14 night vision monocular devices, fifty-two (52) PMAG 5.556 x 42 military magazines, and nineteen (19) M-16 magazines (government owned).
This investigation was conducted by Homeland Security Investigations. Assistant United States Attorney Greg McDonald prosecuted this case on behalf of the Government.
Hewitt Mother and Son Sentenced to Federal PrisonRead the Press Release
In Waco today, 26-year-old Conner Phillip Koss and his mother, 60-year-old Le’Ann Koss, both of Hewitt, TX, were sentenced to 121 months and 70 months in federal prison, respectively, for their roles in a marijuana distribution scheme announced United States Attorney Robert Pitman.
In addition to the prison terms, United States District Judge Walter S. Smith, Jr., ordered that Conner and Le’Ann Koss each pay a $2,000 fine and be placed under supervised release for a period of five years after completing their prison terms.
On July 24, 2014, Le’Ann Koss pleaded guilty to one count of conspiracy to possess with intent to distribute marijuana and one substantive count of possession with intent to distribute marijuana. On June 26, 2014, Conner Koss pleaded guilty to the same charges. By pleading guilty, the defendants admitted that from October 2010 until November 2013, they conspired with family members and others to possess over 50 kilograms of marijuana.
Also sentenced today was Brian Thomas Smith, age 23. Judge Smith sentenced Smith to two years in federal prison followed by three years of supervised release after pleading guilty in July to his role in the marijuana distribution scheme. Judge Smith also ordered Smith to pay a $1,000 fine.
Hewitt
Phillip Larry Koss, age 59, remains in federal custody awaiting sentencing after pleading guilty in March to one count of possession with intent to distribute marijuana. Originally scheduled to be sentenced today, Phillip Larry Koss instead requested new counsel be appointed to represent him--a request which Judge Smith granted today. He faces up to five years in federal prison.On November 29, 2013, authorities executed a search warrant at the Koss’ residence and discovered approximately 12 pounds of tetrahydrocannabinol, commonly known as THC, several firearms and some $27,000 in U.S. Currency. Court records allege that the defendants obtain high grade marijuana from the State of California and arrange for it to be transported to their residence in Hewitt for distribution. Authorities have also recovered approximately 200 pounds of marijuana resulting from related search warrants executed in California as well as traffic stops during this investigation.
The Koss’ other son, Chad, is scheduled for a re-arraignment hearing at 10:00am tomorrow before Judge Smith. He faces the conspiracy charge only.
This investigation is being conducted by the McGregor Police Department, Texas Department of Public Safety and the Yuba County (CA) Narcotics Enforcement Team. Assistant United States Attorney Mary F. Kucera is prosecuting this case on behalf of the Government.
El Paso Couple Plead Guilty to Inducing Foreign or Interstate Travel for ProstitutionRead the Press Release
In El Paso, 45-year-old Maria Blake (aka “Jessica”, “Yvonne”) and her 45–year-old husband, Ronald, face up to 20 years in federal prison after pleading guilty to federal charges involving foreign or interstate travel for prostitution announced United States Attorney Robert Pitman, Homeland Security Investigations (HSI) Special Agent in Charge Dennis Ulrich and Federal Bureau of Investigation Special Agent in Charge Douglas E. Lindquist.
Appearing before United States Magistrate Judge Norbert Garney this morning, Ronald Blake pleaded guilty to one count of aiding and abetting coercion and enticement. Maria Blake pleaded guilty to the same charge yesterday. By pleading guilty, the Blakes admitted that from July 2011 until January 2013, they ran a prostitution service whereby they knowingly persuaded, or attempted to persuade, approximately five females to travel from Juarez to El Paso to engage in sexual activity for financial gain.
The Blakes are on bond pending sentencing. No sentencing date has been scheduled. The Government is also seeking the criminal forfeiture of their residence located in the 2400 block of Tierra Nueva in El Paso. Authorities allege that the residence was used to facilitate their prostitution scheme.
The Blakes were arrested based on an investigation initiated by the El Paso Anti-trafficking Coordination Team (ACT Team). The ACT Team is a human trafficking task force composed of members from the Department of Justice, Federal Bureau of Investigation, Homeland Security Investigation, and the Department of Labor.Assistant United States Attorney Rifian Newaz is prosecuting this case on behalf of the Government.
Statement by United States Attorney Robert Pitman Concerning the November 2014 General ElectionRead the Press Release
Today, United States Attorney Robert Pitman announced the appointment of Assistant United States Attorney (AUSA) Tom Moore as the District Election Officer. AUSA Moore will lead the efforts of the United States Attorney’s Office for the Western District of Texas in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 4, 2014, general elections. AUSA Moore will be responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.
United States Attorney Pitman said, “Every citizen must be able to vote without interference or discrimination and to have that vote counted without it being stolen because of fraud. The Department of Justice will act promptly and aggressively to protect the integrity of the election process.”
The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on Election Day.
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.
In order to respond to complaints of election fraud or voting rights abuses on November 4, 2014, and to ensure that such complaints are directed to the appropriate authorities, United States Attorney Pitman stated that AUSA/DEO Moore will be on duty in this District while the polls are open. He can be reached by the public at the following telephone number: (210) 384-7188.
In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on Election Day. The San Antonio FBI field office can be reached by the public at (210) 225-6741. The El Paso FBI field office can be reached by the public at (915) 832-5000. Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington by phone at 1-800-253-3931 or (202) 307-2767, by fax at (202) 307-3961, by email to [email protected] or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.United States Attorney Pitman said, “Ensuring free and fair elections depends in large part on the cooperation of the American electorate. It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my Office, the FBI, or the Civil Rights Division.”
Georgia Convicted Felon Sentenced in El Paso to Seven Years in Federal Prison for Possessing A Firearm During Interstate KidnappingRead the Press Release
In El Paso today, 27-year-old Wano McSwain of Dahlonega, Georgia, was sentenced to seven years in federal prison for being a convicted felon in possession of a firearm during an interstate kidnapping announced United States Attorney Robert Pitman and Douglas E. Lindquist, Federal Bureau of Investigation (FBI) Special Agent in Charge of the El Paso Division.
In addition to the prison term, United States District Judge Philip R. Martinez ordered that McSwain be placed under supervised release for a period of three years after completing his prison term and forfeit two firearms and an assortment of ammunition seized by law enforcement at the time of his arrest.
According to court records, on February 5, 2014, a 78-year-old man reported to a store clerk at the Love’s Truck Stop on Interstate 10 in Anthony, TX, that he was in fear of his life. The man told the clerk that two days prior, while in Georgia, McSwain forced him at gunpoint to drive McSwain to Albuquerque, NM. Anthony police officers arrived on the scene and began searching for McSwain. They subsequently arrested McSwain nearby and recovered a .25 caliber pistol and a .20 gauge shotgun belonging to McSwain.
McSwain’s criminal history reveals that he was convicted of Pandering of a Child on April 19, 2005 in Clark County, NV, and subsequently sentenced to two to eight years in the Nevada Department of Corrections. Further investigation revealed a police report on file in Lumpkin County, GA, which alleged that McSwain stole the .20 gauge shotgun recovered by authorities on February 5, 2014. On August 29, 2014, McSwain pleaded guilty to the federal felon-in-possession charge in El Paso.
This case was investigated by special agents with the Federal Bureau of Investigation together with the Anthony Police Department. Assistant United States Attorney Rifian Newaz prosecuted this case on behalf of the Government.