Western District of Texas
Press releases recorded for this federal judicial district.
Eagle Pass Businessman Pleads Guilty to Bank FraudRead the Press Release
In Del Rio today, 41-year-old Jose Flores, III, owner of Eagle Pass-based N5 Group, LLC, (N5) pleaded guilty to a bank fraud scheme announced United States Attorney Robert Pitman and FBI Special Agent in Charge Armando Fernandez.
According to court records, the defendant, through N5, attempted to serve as raw materials transportation providers to businesses in Eagle Pass and to companies operating in the Eagle Ford Shale in South Texas. In April 2011, N5 established a Large Fleet Accounts Receivable Financing agreement with TAB Bank, Inc in Utah. The primary purpose of N5's account with TAB was to establish a factoring relationship between the two entities. In a factoring arrangement, a bank agrees, for a fee, to serve as the recipient of payments that are owed to a company. Once this agreement is made, the company will assign its accounts receivable to the bank. The bank will then advance a large percentage of the yet-unpaid accounts receivable to the business expecting payment. Thereafter, the bank will begin to collect payments from the customer indebted to the business. Ideally, the company expecting payment will benefit because it will obtain cash from the bank immediately and thus need not wait for its accounts to come due before receiving payment. The bank benefits as well because it charges a commission for its service as receiver of the outstanding accounts.
Appearing before U.S. District Judge Alia Moses, Flores pleaded guilty to one count of bank fraud. By pleading guilty, Flores admitted that in July 2011, he submitted to TAB Bank a forged invoice in the amount of $51,000 for work N5 was to perform for a customer. Pursuant to the factoring agreement, the defendant fraudulently received $35,000 from TAB Bank. When TAB subsequently began its efforts to collect payment from the customer, it found that N5 had never done any work for that customer. In fact, that customer owed N5 no money at all.
Flores faces up to 30 years in federal prison and a maximum $1,000,000 fine as well as $35,000 restitution to TAB Bank. He remains on bond pending sentencing scheduled for May 12, 2014, before Judge Moses in Del Rio.
This investigation was conducted by the Federal Bureau of Investigation and the Texas Department of Public Safety. Assistant United States Attorney Timothy A. Duree is prosecuting this case on behalf of the Government.
West, Texas Man Sentenced to Prison on Federal Firearms and Obstruction of Justice ChargesRead the Press Release
In Waco this afternoon, 31-year-old Bryce Ashley Reed of West, TX, was sentenced to 21 months in federal prison followed by three years of supervised release and ordered to pay a $2,000 fine for conspiracy to make an unregistered destructive device and attempting to obstruct justice announced United States Attorney Robert Pitman and ATF Special Agent in Charge Robert W. Elder, Houston Division.
On October 10, 2013, Reed pleaded guilty to the charges. By pleading guilty, Reed admittedly conspired with others from December 2012 until April 26, 2013, to construct and possess a pipe bomb, then attempt to conceal it from law enforcement or destroy it, thus impairing its availability for use in grand jury proceedings. According to court records, Reed used the Internet to place orders and arrange shipments to his residence of various bomb-making components. Reed also enlisted the assistance of another individual to construct the housing for the pipe bomb. Once completed, Reed took possession of the pipe and stored it inside his residence along with the other components inside two ammunition cans.
According to the factual basis in this case, after the events of April 17, 2013, wherein an explosion at the West Fertilizer Company resulted in the deaths of 15 individuals and the damage and destruction to many structures within a several-block radius of the plant, Reed, whose home was affected by the blast, was staying in a motel in West. On April 26, 2013, knowing that there was a possibility investigators might find the bomb-making components inside his residence and charge him, Reed enlisted the assistance of two individuals to travel to his home in West and retrieve the ammunition cans and bring them to him, which they did. Reed, subsequently, provided a box containing the ammunition cans and the bomb-making materials to another individual with instructions to “get rid of this.” The individual agreed to do so and placed the box in a spare bedroom in his home in Abbott, Texas. On May 7, 2013, the individual, for the first time, looked into the box and discovered its contents. He immediately notified the McLennan County Sheriff’s Office who took possession of the items.
This investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives together with the McLennan County Sheriff’s Office, McLennan County District Attorney’s Office, West Police Department, Texas State Fire Marshal’s Office and Texas Department of Insurance Fraud Unit. Assistant United States Attorneys Mark Frazier and Greg Gloff prosecuted this case on behalf of the Government.
San Antonio Bookeeper Sentenced to Federal Prison in Connection with A Million Dollar Bank Fraud and Identity Theft SchemeRead the Press Release
In San Antonio this afternoon, 50-year-old Sandra Sanchez Gonzalez was sentenced to 57 months in federal prison followed by three years of supervised release and ordered to pay a $1,074,096.36 in restitution for her role in a bank fraud and identity theft scheme announced United States Attorney Robert Pitman.
On August 1, 2013, Gonzalez pleaded guilty to one count of bank fraud and one count of aggravated identity theft. By pleading guilty, Gonzalez admitted that while employed by Allegro, LTD., from September 2006 until July 2011, she stole money from Allegro by forging the owner’s signature on company checks and also fraudulently obtained credit cards under the company name to pay for personal expenses. Gonzalez also admitted to stealing company funds by creating fictitious company pay stubs that incorrectly reflected that her son was employed by Allegro.
This investigation was conducted by agents with the U.S. Secret Service. Assistant United States Attorney Tom Moore prosecuted this case on behalf of the Government.
Austin Attorney Marc G. Rosenthal Sentenced to Federal Prison in Connection with South Texas Bribery SchemeRead the Press Release
In Brownsville last night, United States District Judge Andrew Hanen sentenced 51–year-old Austin attorney Marc Garrett Rosenthal to 20 years in federal prison followed by three years of supervised release and ordered him to pay $13,288,984.00 restitution for his role in a South Texas bribery scheme announced United States Attorney Robert Pitman, Federal Bureau of Investigation Special Agent in Charge Armando Fernandez, San Antonio Division, Drug Enforcement Administration Special Agent in Charge Javier Pena, Houston Field Division, Internal Revenue Service-Criminal Investigation Acting Special Agent In Charge Bernard Butler and Brownsville Police Chief Orlando Rodriguez.
In February, jurors convicted Rosenthal of conspiring to bribe a State District Judge, bribe witnesses in both state and federal court cases, file fraudulent personal injury cases in both state and federal courts and deprive the citizens of Cameron County, Texas, of the right to honest services of an elected official.
“Marc Rosenthal and the public officials with whom he conspired not only betrayed their professional ethical obligations but actively sought to corrupt the very legal processes that were designed to do justice,” stated United States Attorney Robert Pitman. “Sadly, innumerable honorable acts performed by honest lawyers and public officials are undone in the eyes of the public when the Marc Rosenthals of our profession violate the public trust for personal gain.”
Evidence presented at trial revealed that from November 2005 until December 2009, Rosenthal and others, including 404th Judicial District Court Judge Abel Corral Limas and former state legislator and attorney Jose Santiago “Jim” Solis, participated in a scheme in which Rosenthal directly, or facilitated by Solis, paid money and other considerations to Limas which resulted in favorable court rulings for Rosenthal & Watson clients.
The evidence also revealed that Rosenthal directed others to pay certain individuals, including funeral home directors and a public employee, for the referral of plaintiff’s personal injury cases; make arrangements to manipulate the random case assignment system at the Cameron County District Clerk’s Office so that cases were filed in Courts preferred by Rosenthal & Watson; and, pay witnesses to provide false testimony and statements.
Rosenthal was convicted of one count of conspiracy to violate the Racketeering Influenced Corrupt Organization (RICO) statute; five counts of mail fraud; three counts of tampering with witnesses or proceedings; one count of extortion; and, three counts of mail fraud, aiding and abetting and deprivation of honest services. At sentencing, Judge Hanen set aside two of the counts of conviction, both mail fraud counts.
This investigation was conducted by the FBI, DEA, IRS-Criminal Investigation and the Brownsville Police Department. Former Southern District of Texas Assistant United States Attorney Michael Wynne and Southern District of Texas Assistant United States Attorney Oscar Ponce prosecuted this case on behalf of the Government.
Former El Paso Businessman and City Representative Sentenced in El Paso Corruption CaseRead the Press Release
In El Paso this morning, Roberto “Bobby” Ruiz, a former representative for New York–based financial services firm Bear Stearns, was sentenced to two years in federal prison followed by three years of supervised release for his role in a “pay-to-play” scheme uncovered during the ongoing public corruption investigation in El Paso announced United States Attorney Robert Pitman and FBI Special Agent in Charge Douglas E. Lindquist, El Paso Division.
United States District Judge Frank Montalvo also ordered that Ruiz pay a $175,000 fine and to self-surrender to the Dallas office of the U.S. Marshals Service on January 7, 2014, to begin serving his prison term.
In sentencing Ruiz below the applicable advisory U.S. Sentencing Guidelines, Judge Montalvo took into consideration the Government’s request to the Court to acknowledge Ruiz’ lengthy, extensive and beneficial assistance to the Government in the El Paso public corruption investigation as well as his assistance to other state and federal initiatives in other jurisdictions.
Judge Montalvo also sentenced former El Paso city representative and attorney, Raymond Telles, this morning to five years of probation and ordered Telles to pay a $4,000 fine for his role in the conspiracy.
In sentencing Telles to a term of probation, Judge Montalvo took into consideration the Government’s recommendation regarding Telles’ sentencing based on Telles’ expeditious cooperation with the Government, within one month of learning he was under investigation, and Telles’ truthful and complete cooperation. In addition, the Judge recognized Telles’ minimal benefit as a result of corrupt conduct. According to counsel for Telles, the defendant voluntarily surrendered his Texas law license in 2009 and has no intent to practice law in the future.
Previously, Telles and Ruiz pleaded guilty to conspiracy to commit mail and wire fraud, and deprivation of honest services. By pleading guilty, both admitted to conspiring to participate in a bribery scheme in an effort to secure a $40 million El Paso County debt refinancing contract.
“The sentencing of Mr. Ruiz and Mr. Telles are a reminder that those who illegally conspire to profit from taxpayer dollars will have to answer to the people of El Paso,” stated FBI Special Agent in Charge Douglas E. Lindquist.
This FBI investigation has resulted in 39 federal convictions -- 36 individuals who entered guilty pleas and three individuals who were convicted by juries.
Assistant United States Attorneys Debra Kanof and Jose Luis Gonzalez prosecuted this case on behalf of the Government.
Waco Couple Admit to Robbing Local BankRead the Press Release
In Waco, 32-year-old Wendy Chudej (pronounced “Hoo-jay”) faces up to 20 years in federal prison after pleading guilty this afternoon to robbing a Waco bank in August 2013 announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent In Charge Armando Fernandez, San Antonio Division.
Appearing before United States District Judge Walter S. Smith, Chudej pleaded guilty to one count of bank robbery. By pleading guilty, Chudej admitted that she wrote the demand note and served as the getaway driver for her husband who robbed the First National Bank of Central Texas branch on North Valley Mills Drive in Waco on August 9, 2013. According to court records, 26-year-old Matthew Chudej entered the bank and presented a note to a teller demanding cash. The teller complied with Chudej’s request and handed him approximately $8,000 in U.S. currency.
Both Wendy and Matthew Chudej remain in federal custody pending sentencing. Wendy Chudej is scheduled to be sentenced on January 22, 2014. Matthew Chudej, who pleaded guilty to the same charge on October 17, 2013, is scheduled to be sentenced on December 4, 2013.
This investigation was conducted by the Federal Bureau of Investigation and the Waco Police Department. This case is being prosecuted by Assistant United States Attorney Greg Gloff.
Former Soldier Sentenced to 30 Years in Federal Prison for Aggravated Sexual Abuse of A ChildRead the Press Release
In Waco this afternoon, former U.S. Army Sergeant David J. Adams, age 38, was sentenced to 30 years in federal prison followed by five years of supervised release and fined $1,000 for the aggravated sexual abuse of a child announced United States Attorney Robert Pitman.
On September 30, 2013, a federal jury convicted Adams of one count of aggravated sexual abuse of a child. Evidence presented during trial revealed that on multiple occasions in 2006, after Adams returned from active duty in Iraq, Adams engaged in sexually explicit activity with a child at his residence located on Fort Hood.
This investigation was conducted by the United States Army Criminal Investigation Division and the Federal Bureau of Investigation. This case was prosecuted by Assistant United States Attorney Mary Kucera.
Career Bank Robber Sentenced to 15 Years in Federal PrisonRead the Press Release
In Waco this afternoon, 42-year-old Michael Harrison Mathews of Cedar Hill, TX, was sentenced to 15 years in federal prison for robbing a Hillsboro, TX, bank earlier this year and for being a career criminal announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent In Charge Armando Fernandez, San Antonio Division.
In addition to the prison term, United States District Judge Walter S. Smith ordered that Mathews pay a $1,000 fine and be placed under supervised release for a period of three years after completing his prison term.
On October 13, 2013, Mathews pleaded guilty to one count of bank robbery. By pleading guilty, Mathews admitted that on July 3, 2013, he robbed the Wells Fargo branch in Hillsboro, TX. Texas Department of Public Safety troopers subsequently arrested Mathews following a 25-mile high-speed chase on Interstate 35. At the time of Mathews’ arrest, authorities recovered approximately $730 stolen from the bank. Mathews’ criminal history revealed that since 2005, he was responsible for a total of nine bank robberies in the Dallas area, Waco, Austin and Houston.
This investigation was conducted by the Federal Bureau of Investigation and prosecuted by Assistant United States Attorney Sean Condron.
Tax Defier, Former NFL Player Convicted of Filing Fraudulent Income Tax ReturnsRead the Press Release
Gregory P. Boyd faces up to nine years in federal prison after a jury in Austin convicted him last week of filing income tax returns that did not accurately reflect his income, announced United States Attorney Robert Pitman and Internal Revenue Service-Criminal Investigation Special Agent In Charge Steve McCullough.
Last Thursday, jurors convicted Boyd of three counts of filing fraudulent income tax returns. Evidence and testimony presented during trial revealed that Boyd knowingly filed false income tax returns for 2004, 2005 and 2006. On each tax return, Boyd declared that he received zero income when in fact, he received roughly $180,000 in 2004, about $390,000 in 2005, and approximately $225,000 in 2006. The parties stipulated that Boyd owed income tax in the amount of $26,688 for 2004, at least $102,237 for 2005, and $49,155 for 2006.
Evidence at trial revealed that Boyd had not paid income taxes on any of the years 2004 through 2011. Boyd, who played football at the University of Arizona and then played in the NFL during the 1973 and 1974 seasons, worked in the field of real estate development during 2004, 2005 and 2006.
Boyd testified during the trial that he believed his tax returns were true and complied with the law, based on ideas he learned from the book “Cracking the Code” by Peter Eric Hendrickson. Hendrickson appeared at trial in Austin last week and testified as a witness for the defense. Boyd specifically testified that he believed, based on Hendrickson’s book, that the income tax applies only to the income of federal government employees and federal government contractors, as well as income derived from investments in federal government securities.
“Tax crimes cheat not only the government, but also every honest citizen who follows the rules and meets his or her obligations. We owe it to these citizens to bring justice to those who willfully break the tax laws,” stated U.S. Attorney Robert Pitman.
Boyd remains on a $25,000 unsecured bond pending sentencing scheduled for 9:00am on February 10, 2014, before U.S. District Judge Sam Sparks in Austin.
“Taxpayers need to be aware that frivolous tax arguments and schemes can land them in prison. All of these arguments have been repeatedly defeated in our courts, to include the Supreme Court. Mr. Boyd found out the hard way that Juries understand that we all must pay our taxes to keep our society free and functioning,” stated Internal Revenue Service-Criminal Investigation Special Agent In Charge Steve McCullough.
This investigation was conducted by the Internal Revenue Service-Criminal Investigation. The case is being prosecuted by Assistant United States Attorney Alan Buie.
Man Sentenced to Federal Prison for Using A Communication Device to Entice A MinorRead the Press Release
In Midland this afternoon, 21-year-old Juan Carlos Venegas, a Mexican citizen formerly living in Crane, TX, was sentenced to 11 years in federal prison followed by 20 years of supervised release for using a communication device to entice a minor to engage in sexual activity announced United States Attorney Robert Pitman and Homeland Security Investigations (HSI) Special Agent In Charge Dennis Ulrich.
On September 5, 2013, a federal jury convicted Venegas of knowingly using his cell phone on several occasions in June 2012 to entice a minor to engage in sexual activity with him. Venegas fled to Mexico shortly after being arrested by Crane County Sheriff’s deputies in July 2012. On February 16, 2013, approximately eight months after his initial arrest, Venegas was apprehended in Del Rio, TX, while attempting to re-enter the United States from Mexico. He has remained in federal custody ever since.
This investigation was conducted by the Homeland Security Investigations (HSI) and the Crane County Sheriff’s Office. The case was prosecuted by Assistant United States Attorney Austin Berry.
Former Credit Union Loan Officer in Midland Sentenced to Federal Prison for Multi-Million Dollar Auto Loan ScamRead the Press Release
In Midland this morning, 41-year-old Michael Ross Franco of Midland was sentenced to 18 months in federal prison for his role in a loan scheme in which a Midland credit union sustained losses in excess of $4 million announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent In Charge Douglas E. Lindquist, El Paso Division.
In addition to the prison term, United States District Judge Robert A. Junell ordered that Franco pay $4,122,532.19 restitution to the bank and be placed under supervised release for a period of five years after completing his prison term.
According to court records, Franco worked as a loan officer with My Community Federal Credit Union from May 22, 2006, until October 22, 2008. During that time, Franco knowingly issued approximately 487 fraudulent auto loans totaling in excess of $7 million. The fraudulent auto loans, which Franco approved, contained information which overstated or misstated the customer’s income, the customer’s debt-to-income ratio and/or the customer’s credit score. Franco, admittedly, accepted over $29,000 in kickbacks from co-conspirators for his role in the scheme.
On November 27, 2012, Franco pleaded guilty to one count of conspiracy to commit bank fraud. Co-defendants Raymond Holguin, Jr., operator of Motor City, an auto dealership in Odessa, TX, and Gustavo Pizarro, General Sales Manager at Motor City have each pleaded guilty to the same charge and are awaiting sentencing. Sentencing is scheduled for January 9, 2014.
This investigation was conducted by the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney V. LaTawn Warsaw.
Three More Eagle Pass Businessmen Indicted in Connection with Maverick County Bribery, Kickback and Bid-Rigging SchemeRead the Press Release
In Eagle Pass this morning, Federal Bureau of Investigation agents along with Texas Department of Public Safety investigators arrested 64-year-old Saul Lombrana, owner and operator of Fiesta Contractors based in Eagle Pass, in connection with an alleged bribery, kickback and bid-rigging scheme announced United States Attorney Robert Pitman and FBI Special Agent in Charge Armando Fernandez.
Lombrana is charged by a federal grand jury indictment returned yesterday with one count of paying a bribe to an agent of an organization receiving federal funds. According to the indictment, in March 2011, Lombrana submitted a $14,500 bid to construct 155 linear feet of concrete drain swell on Rafael Street in Precinct 1. Lombrana was awarded the contract. The indictment alleges that Lombrana never constructed the concrete drain swell, but requested and received full payment for the project. The indictment also alleges that in exchange for being awarded the contract, Lombrana paid a monetary bribe to a Maverick County employee.
In addition to indicting Lombrana, the federal grand jury sitting in Del Rio returned separate indictments against 46–year-old Alejandro Wheeler, owner and operator of TVAW, a media outlet based in Eagle Pass, and 55–year-old Marcelo Alvarez, a surveyor and consultant in Maverick County. Alvarez surrendered to federal authorities this morning. Authorities are still looking for Wheeler.
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 his indictment, in 2010 and 2011, Wheeler and Maverick County commissioners devised a scheme to have two contractors awarded Maverick County construction contracts. As part of the scheme, Wheeler allegedly received money from the contractors and the commissioners received bribes from the construction funds as well as discounted campaign advertising and media time.
Alvarez is charged with one count of paying a bribe to an agent of an organization receiving federal funds. According to his indictment, from 2010 to 2012, Alvarez corruptly paid money to Maverick County officials, including two county commissioners, in order to guarantee that engineering, project management and consulting services contracts valued at approximately $800,000 were awarded to a specific company. Alvarez, in turn, was designated as the Resident Project Representative on those projects and received payment for his services.
Upon conviction each charge calls for up to ten years in federal prison and a maximum $250,000 fine.
This ongoing investigation is being conducted by the Federal Bureau of Investigation and the Texas Department of Public Safety. 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 Michael Galdo 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 defendants are presumed innocent until proven guilty in a court of law.
San Antonio Businessman Pleads Guilty to Role in $133 Million Real Dollar Loss Fraud and Tax CaseRead the Press Release
In San Antonio this morning, 61-year-old businessman Charles Pircher pleaded guilty to his role in what is believed to be the largest real dollar loss fraud and tax related case ever prosecuted in the Western District of Texas announced United States Attorney Robert Pitman, FBI Special Agent in Charge Armando Fernandez and IRS-Criminal Investigation Special Agent In Charge Steve McCullough.
“This was a wide ranging and complex scheme, whose simple purpose was to steal money from company payroll by diverting tax and insurance payments all for personal enrichment. Pircher cheated clients and the taxpayers for years,” stated United States Attorney Robert Pitman.
Appearing before United States Chief District Judge Fred Biery, Pircher pleaded guilty to a Klein tax fraud conspiracy charge and a mail fraud conspiracy charge. According to the factual basis filed in this case, from 2002 to 2008, Pircher managed a series of Professional Employer Organizations (PEOs) based in San Antonio, including Service Professionals, which entered into staff leasing agreements with various client companies to manage their payroll and insurance programs. By pleading guilty, Pircher admitted that he and other co-conspirators stole more than $133 Million directly from their client companies’ programs.
Pircher faces up to 20 years in federal prison on the mail fraud conspiracy charge and up to five years in federal prison on the Kline tax fraud conspiracy charge. Sentencing has yet to be scheduled.
This investigation, conducted by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation, has resulted in guilty pleas by five defendants—Pircher; John D. Walker, II; John Bean; Mike Solis; and Pat Mire. A sixth defendant, San Antonio businessman Larry W. Kimes, is scheduled for jury selection and trial on January 23, 2014. Kimes is charged by federal grand jury indictment with one count of Klein tax fraud conspiracy, two counts of mail fraud conspiracy, one count of money laundering conspiracy and one substantive count of money laundering.
Assistant United States Attorney Thomas J. McHugh is prosecuting this case on behalf of the Government.
Federal Jury in Del Rio Convicts San Antonio-Area Woman in Crystal Methamphetamine Smuggling OperationRead the Press Release
Maria Landin, age 46, of Helotes, TX, faces between 10 years and life in federal prison after a jury in Del Rio convicted her this afternoon for her role in a scheme to smuggle into the United States 878.2 grams of pure crystal methamphetamine, announced United States Attorney Robert Pitman.
Jurors convicted Landin of one count of conspiracy to import a controlled substance. Sentencing for Landin, who remains in federal custody, is scheduled for May 5, 2014.
Evidence and testimony presented during trial revealed that on November 11, 2012, Landin hired two individuals—Paul McKinney and Anthony Cole, both of Corpus Christi, TX--to go and pick up the crystal methamphetamine in Piedras Negras, Mexico, and return to her residence in Helotes, Texas, for distribution in the San Antonio area. On November 12, 2012, McKinney and Cole were apprehended at the Eagle Pass Port of Entry, Bridge #2, while in possession of the crystal methamphetamine.
Testimony further revealed that the co-conspirators met at Landin’s residence in Helotes, where McKinney and Cole were given a cellular phone, cash, and instructions on how to make contact in Mexico with the source of the methamphetamine. Landin also instructed the two couriers to conceal the drugs on their bodies using tape. After retrieving the methamphetamine, Cole and McKinney became lost in Mexico. Landin assisted Cole and McKinney by providing them with directions back to the Port of Entry. Inspection at the port revealed two bundles of methamphetamine taped to Cole’s legs. The methamphetamine had a street value of approximately $100,000.
Cole and McKinney, who remain in federal custody, have already pleaded guilty to the conspiracy charge and are awaiting sentencing in March 2014.
This investigation was conducted by Special Agents from Homeland Security Investigations (HSI), and U.S. Customs and Border Protection (CBP). The case was prosecuted by Assistant United States Attorneys Patrick Burke and Katherine Nielsen.
Federal and State Authorities Make Arrests in El Paso Crack Cocaine Distribution InvestigationRead the Press Release
Federal and state authorities have arrested seven individuals, all of whom are believed to be associated with the Folk Nation gang operating in El Paso, charged in connection with a crack cocaine distribution conspiracy announced United States Attorney Robert Pitman, Drug Enforcement Administration Special Agent In Charge Joseph A. Arabit, El Paso Police Chief Greg Allen and El Paso County District Attorney Jaime Esparza.
Those arrested yesterday and charged federally include: Terry Golden (aka “G”), age 44; Lachundria Aguirre (aka “Lala”), age 22; Terry Devorn Pearson (aka “P”), age 30; Ricardo Lucio (aka “Lucio”), age 46; Dominic Martin, age 36; Bryant Berryman, age 27; and, Juan Escalera, age 33. Authorities arrested four additional individuals yesterday based on state charges.
Golden, Aguirre, Pearson and Lucio were charged in a federal grand jury indictment, returned on November 13, 2013, and unsealed today, with one count of conspiracy to possess a controlled substance with intent to distribute. According to the indictment, Golden, Aguirre, Pearson and Lucio conspired with each other between October 2013 and September 2013, to possess with intent to distribute more than 28 grams of crack cocaine.
Martin, owner of the In The Cutt Barbershop and Salon in El Paso, and Berryman and Escalera are charged in separate criminal complaints filed yesterday. Martin and Berryman are charged with possession of a controlled substance with intent to distribute; Escalera, with re-entry after deportation. According to one criminal complaint, Martin himself, and also through an associate, sold a total of approximately 27 grams of crack cocaine to individuals acting in an undercover capacity earlier this year. Berryman is alleged to have been in possession of cocaine following a traffic stop on October 2, 2013. Escalera is alleged to have illegally re-entered the United States after being formally deported on January 9, 2007.
“This investigation, which was conducted jointly between DEA, the El Paso Police Department and other federal, state and local law enforcement agencies, targeted a gang-affiliated drug trafficking network responsible for the distribution of crack and powder cocaine in the El Paso area. The arrests of gang members and their associates further our efforts to stem the local drug trade and prevent gang-related violence and other crime,” stated DEA Assistant Special Agent In Charge Steve Whipple, El Paso Division. “DEA and our law enforcement partners will continue to work together to pursue those who threaten the safety of the communities in which we work and live,” he added.
All of the defendants who face federal charges remain in custody at this time. Upon conviction, each indicted defendant faces between five and 40 years in federal prison; Martin and Berryman each face up to 20 years in federal prison; and, Escalera faces up to two years in federal prison.
These charges resulted from a DEA El Paso Division Strike Force II investigation. The Strike Force is made up of investigators from the DEA, Homeland Security Investigations (HSI), U.S. Border Patrol, U.S. Marshals Service, El Paso Police Department and the El Paso County Sheriff’s Department. Agents from the Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Postal Inspection Service, U.S. Customs and Border Protection and Child Protective Services assisted in making the arrests.
According to Lt. Tyler Grossman of the El Paso Police Department, “Forty-seven confirmed gang members have been arrested over the past year, utilizing 4,000 man hours, which was made possible through the Stonegarden Grant. The Stonegarden Grant calls for cooperation of agencies to fight border violence and these arrests are proof of the successful partnership demonstrated by EPPD, DEA, FBI, US Marshals, Border Patrol and others.”
In addition to the arrests, this operation has resulted in the seizure of 190 grams of crack cocaine, 30 grams of cocaine, two firearms and more than $24,000 in U.S. currency.
An indictment, or a criminal complaint, 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.
Baptist Health Systems Settles Federal False Claims Act Civil LawsuitRead the Press Release
Baptist Health Systems, one of the largest health care providers in San Antonio, has paid $3,675,000 to the United States Department of Justice to settle allegations that it violated the federal False Claims Act by filing false claims for reimbursement under the Medicare program United States Attorney Robert Pitman announced today.
The federal investigation was triggered by allegations contained in a whistleblower lawsuit filed by Norma Rivera in United States District Court in San Antonio. The lawsuit alleged that Baptist Health Systems improperly filed claims with the Medicare program by failing to disclose on the claim that the patient receiving treatment had another insurance policy that covered the care at Baptist. The suit further alleged the Medicare program overpaid Baptist Health Systems on claims from 2003 through 2007. Under the law, a health care provider is required to disclose the fact that a patient has other insurance when it files its claim with Medicare. The claim is processed under the other insurance policy and, in most cases, Medicare pays whatever the patient was out of pocket (such as a deductible or copayment). If the health care provider receives a double payment because the insurance company is slow to pay, then the health care provider must reimburse Medicare.
United States Attorney Pitman stressed that Baptist Health Systems cooperated with the investigation, including conducting an audit of claims going back to January 2003. The audit was disclosed to the United States Attorney’s Office, allowing the government and Baptist to reach an acceptable settlement. Assistant United States Attorney Harold E. Brown, Jr., from the Affirmative Civil Enforcement Unit investigated the case and negotiated the settlement.
The False Claims Act provides that a whistleblower will receive a portion of the settlement for bringing the problem to the attention of the government. In this case, Norma Rivera received $661,500 as her share of the settlement. In addition to paying $3,675,000 to the Government, Baptist Health Systems paid Rivera’s attorneys’ fees and expenses.
Individuals who suspect Medicare fraud, waste or abuse are encouraged to report this information to the United States Department of Health and Human Services. Information on how to make this report is online at http://www.medicare.gov/forms-help-and-resources/report-fraud-and-abuse/report-fraud/reporting-fraud.html. You can also report Medicare fraud by calling 1-800-MEDICARE.
"Trick or Treat Bandit" Sentenced to Federal Prison for Series of Austin Bank RobberiesRead the Press Release
In Austin today, 34-year-old Antonio Cervantez of Austin, dubbed by law enforcement as the “Trick or Treat Bandit,” was sentenced to 11 years in federal prison followed by five years of supervised release for committing several Austin bank robberies announced United States Attorney Robert Pitman, FBI Special Agent in Charge Armando Fernandez, San Antonio Division, and Austin Police Chief Art Acevedo.
Cervantez, who has remained in custody since his arrest on May 29, 2013, received four years in federal prison for bank robbery plus a mandatory seven-year-consecutive prison term for possession of a firearm during a crime of violence. In addition to the prison term, United States District Judge Sam Sparks ordered that Cervantez pay a combined restitution in the amount of $127,885.49 to four different financial institutions—Bank of America, Wells Fargo, Capital One and International Bank of Commerce.
“It’s hard to know what someone considers when planning and committing an armed robbery, but this case should make them think about the fact that they’ll likely spend a long time in prison if we have anything to do with it,” stated United States Attorney Robert Pitman.In August, Cervantez pleaded guilty to the charges. By pleading guilty, Cervantez admitted that on the afternoon of May 29, 2013, he robbed the Bank of America located on West Parmer Lane in Austin. A bank customer, who witnessed the robbery from the drive-through banking lane, called the police and followed Cervantez after he fled the scene. Cervantez drove to his residence in the 4300 block of Northridge where authorities subsequently arrested him and recovered approximately $30,000 stolen from the bank and a .380 caliber firearm. According to court records, Cervantes is also responsible for committing seven other bank robberies in Austin dating back to October 2009.
“This case highlights the FBI’s commitment to working with our partners in the Central Texas Violent Crime Task Force, to aggressively investigate and prosecute dangerous serial armed bank robbers, who threaten the safety of our public,” stated FBI SAC Armando Fernandez.
This case was investigated by the Austin Violent Crime Fugitive Task Force. The Task Force is made up of investigators from the Federal Bureau of Investigation, Austin Police Department and the Round Rock Police Department. Assistant United States Attorney Gregg N. Sofer prosecuted this case on behalf of the Government.
Final Defendant in Uvalde/Crystal City-based Texas Mexican Mafia Racketeering Ring Sentenced to Federal PrisonRead the Press Release
In Del Rio this afternoon, 31-year-old Texas Mexican Mafia member Eliseo Sanchez, III, of Crystal City was sentenced to 70 months in federal prison for conspiring to violate the Racketeering Influenced Corrupt Organization (RICO) statute plus an additional 24 months in federal prison for violating supervised release conditions stemming from a prior alien smuggling conviction. Sanchez is the last of 12 convicted Uvalde and Crystal City, Texas-based TMM members and associates charged in this racketeering investigation to be sentenced announced United States Attorney Robert Pitman and FBI Special Agent in Charge Armando Fernandez.
The other TMM members convicted of the RICO conspiracy received the following prison sentences:
Jorge Abel Ramirez (a/k/a “Hondo,” a/k/a “Superdope”), of Hondo and Crystal City, 240 months;
Geronimo Torres (a/k/a “Jerry,” a/k/a “G”), of Uvalde, 180 months;
Benito Benavides (a/k/a “Benny”), of Uvalde, 240 months;
Chris Gutierrez (a/k/a “Fire”), of Uvalde, 108 months;
Albert Torres (a/k/a “Terrible”), of Uvalde; 168 months;
Eric Velasquez Solis (a/k/a “Kilo”), of Uvalde, 162 months;
Mario Zavala, of Crystal City, 108 months;
Rodolfo Villegas (a/k/a “Rudy”), of Crystal City, 72 months;
Charles Martinez (a/k/a “Charlie”), of Crystal City, 115 months; and,
Sebastian Cortinas (a/k/a “Seabass”), of Crystal City and Eagle Pass, 72 months.Additionally, Robert Marcus Castro (a/k/a “Tiny”), of Crystal City, pleaded guilty to committing a Violent Crime In Aid of Racketeering, and was sentenced to 97 months in federal prison.
The defendants conspired to engage in a pattern of organized criminal conduct including attempted murder, retaliation against an informant, extortion, and distribution of cocaine, heroin, marijuana and methamphetamine.
As a result of the same indictment, Carlos Guerrero of Uvalde, Zachary Vasquez of Uvalde and Jose Ibarra of Uvalde all pleaded guilty and were sentenced for conspiracy to possess with intent to distribute less than 500 grams of cocaine within 1,000 feet of Robb Elementary School in Uvalde, Texas. Guerrero was sentenced to 52 months incarceration; Vasquez to 24 months incarceration; Ibarra to 18 months incarceration.
Jorge Abel Ramirez was also found guilty of violently assaulting a prison guard while the RICO case was pending. He received 37 months incarceration for that offense, set to run consecutive to his 240 months RICO sentence, for a total of 277 months imprisonment.
“In this case, a dozen members of a violent drug gang have been sentenced to lengthy prison terms, and the community can rest assured that we will continue to use the resources of federal law enforcement to target the most dangerous offenders in the illegal drug trade,” stated United States Attorney Robert Pitman.
This case resulted from a joint investigation by the Federal Bureau of Investigation, Texas Department of Public Safety – Criminal Investigations Division, Uvalde County Sheriff’s Office, Drug Enforcement Administration and the U.S. Marshals Service, with assistance from the Real County Sheriff’s Office, Hondo Police Department, Zavala County Sheriff’s Office and Uvalde Police Department.Ringleader of El Paso and Baltimore-based Federal Human Trafficking Investigation Sentenced to 17 1/2 Years in Federal PrisonRead the Press Release
In El Paso, 45-year-old Alarcon Allen Wiggins (aka “Alarcon Tha Don”), the C.E.O. of 424 Records, 1 Team 1 Family Entertainment, DBD TV and DBD Productions in Baltimore, MD, was sentenced yesterday to 212 months in federal prison for his leadership role in a forced prostitution scheme based in El Paso and Baltimore announced United States Attorney Robert Pitman and FBI Special Agent in Charge FBI Special Agent in Charge Douglas E. Lindquist.
In addition to the prison term, United States District Judge Frank Montalvo ordered that Wiggins pay $24,879.83 restitution and be placed under supervised release for a period of ten years after completing his prison term. On August 8, 2013, Wiggins pleaded guilty to conspiracy to commit human trafficking and conspiracy to transport women for purposes of prostitution.
Alarcon and nine other Baltimore residents have been convicted and sentenced as part of this investigation. Sentences for the other defendants ranged from probation to 186 months incarceration.
According to court records, the defendants were involved in a scheme from January 2009 until their arrests in October 2011 which included human trafficking; transport via interstate commerce for prostitution; coercing and enticing for prostitution; and, the concealing, removing or confiscating identification documents—all for financial benefit. Wiggins and other defendants used their ties to the music industry to recruit young women then force them to work as strippers and prostitutes while confiscating all means of communication from the victims, namely cell phones and laptop computers; confiscating all identification documents from victims; prohibiting any communication by the victims and personal interaction with anyone outside the group without the defendants’ permission or in their presence; and, collecting all victims’ earnings for the benefit of the defendants.
This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorneys J. Brandy Gardes and Daniel Crumby prosecuted this case on behalf of the government.
Former El Paso County Assistant District Attorney Indicted by Federal Grand Jury in Connection with Bribery SchemeRead the Press Release
In El Paso, FBI agents arrested a former El Paso County Assistant District Attorney Antonio Reyes based on a federal grand jury indictment charging with conspiracy to commit wire fraud and the deprivation of honest services announced United States Attorney Robert Pitman and FBI Special Agent in Charge Douglas E. Lindquist.
The indictment, returned on Wednesday and unsealed today, alleges that from March 30, 2011, until April 15, 2011, Reyes conspired with others through text messaging to accept cash bribes in exchange for dismissing pending criminal cases.
Upon conviction, Reyes faces up to 20 years imprisonment.
“The arrest of Mr. Reyes demonstrates the FBI’s unwavering commitment to the citizens of El Paso that we will vigorously investigate allegations of public corruption in our community and bring those responsible to justice. The citizens of this community deserve to have a sense of confidence that their tax dollars are being spent efficiently for the public good and not for the private enrichment of those in a position of trust,” stated FBI Special Agent in Charge Douglas E. Lindquist.
This indictment resulted from an investigation conducted by the agents with the Federal Bureau of Investigation. Assistant United States Attorney William F. Lewis is 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.
Former Austin Area Woman Sentenced to Federal Prison for Identity Theft and Wire Fraud SchemeRead the Press Release
In Sherman, TX, this morning, Lynetta Mae Washington, formerly of the Austin area and current Denton, TX, resident, was sentenced to 63 months in federal prison for her role in an identity theft and wire fraud scheme announced United States Attorney Robert Pitman, FBI Special Agent in Charge Armando Fernandez and Internal Revenue Service-Criminal Investigation Special Agent in Charge Steve McCullough in San Antonio.
In addition to the prison term, United States District Judge Thad Heartfield ordered that Washington pay $407,448.62 restitution and be placed under supervised release for a period of five years after completing her prison term.
On November 28, 2012, Washington pleaded guilty to two counts of making false claims, one count of misuse of a Social Security Number and one count of wire fraud. By pleading guilty, Washington admitted that in January 2007, she fraudulently assumed the identities of her father-in-law and deceased mother to present the Internal Revenue Service with two falsified 2006 Income Tax Returns in which she claimed entitlement to a total of $5,730.00 in tax refunds. According to court records, Washington also knowingly submitted a written Renewal Application for Loan Officer License with the Texas Department of Savings and Mortgage Lending in which she fraudulently claimed her mother’s Social Security Number as hers in order for her license to be renewed. Furthermore, Washington admitted that while working as a loan officer on behalf of one or more mortgage companies from 2006 to 2009, she collected a fee for providing fictitious employment and income information on a mortgage application in order to secure the loan
This prosecution resulted from an investigation conducted by agents with the Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation and the Texas Department of Public Safety. The matter was prosecuted by Assistant United States Attorney Ashley Hoff.
The case was transferred to the Eastern District of Texas from the Austin Division of the Western District of Texas for plea and sentencing due to the defendant’s residency. United States Attorney Robert Pitman is grateful for the valuable assistance provided by the United States Attorney’s Office for the Eastern District of Texas.
Former ACCESS President Sentenced to Federal Prison in El Paso Corruption CaseRead the Press Release
In El Paso today, former ACCESS Health Source Chief Executive Officer and President Frank Apodaca and El Paso Public Relations consultant Marc Schwartz were each sentenced to eight years in federal prison followed by three years of supervised release for their roles in conspiring to engage in a racketeering scheme focusing on the now-defunct company announced United States Attorney Robert Pitman and FBI Special Agent in Charge Douglas E. Lindquist.
United States District Judge Frank Montalvo also ordered that the defendants pay restitution in the following amounts: $4.1 million to the El Paso Independent School District (EPISD); $2,286,629.76 to the Ysleta Independent School District (YISD); and, $433,103.11 to El Paso County. Furthermore, Judge Montalvo ordered that each defendant self–surrender to a U.S. Bureau of Prisons designated facility on or before December 18, 2013, to begin serving his prison term.
“The sentences handed down today should reassure the public that we will be relentless in pursuing those who would attempt to corrupt public officials as well as those public officials who violate their public trust for personal gain,” stated U.S. Attorney Robert Pitman.
ACCESS, among other things, was a third party administrator of healthcare benefits for self-insured entities. Between 1998 and 2007, ACCESS contracted with self-insured local (El Paso) government entities, including the County, the City and all of the local school districts, among other entities, to provide administrative services for health insurance programs provided by their employer.
Last year, both pleaded guilty to one count of conspiracy to engage in racketeering activity (RICO). By pleading guilty, Apodaca and Schwartz admitted to participating in a scheme involving ACCESS and others to engage in a pattern of racketeering activity, including mail fraud, wire fraud and bribery with elected and appointed members of the El Paso County Commissioners Court and elected Trustees of EPISD, YISD and the Socorro Independent School District to secure and retain lucrative health care management service contracts. Specifically, Schwartz admitted that he carried out schemes on behalf of Apodaca, former ACCESS CEO and President and National Center for the Employment of the Disabled (NCED) Board member; ACCESS owner and NCED CEO Robert “Bob” Jones; and, El Paso attorney Luther Jones to pay bribes to elected officials, including former Socorro ISD Trustees Raymundo “Ray” Rodriguez, Guillermo “Willie” Gandara, Sr., and Charles “Charlie” Garcia; former YISD Trustees Linda Chavez and Mickey Duntley; former EPISD Trustee Salvador “Sal” Mena; former El Paso County Commissioners Elizabeth “Betti” Flores and Larry Medina; and, former El Paso County Judge Dolores Briones, for performing acts in their official capacity which benefitted ACCESS.
“The sentencing of Frank Apodaca Jr. and Marc Schwartz marks another chapter in a ten year investigation in which public confidence was betrayed by a group of elected officials and vendors who used their influence to promote their own personal greed. It also shows the continued commitment of the FBI to aggressively pursue individuals who violated the public’s trust by holding them personally accountable for their self-serving acts,” stated FBI SAC Douglas E. Lindquist.
This FBI investigation has resulted in 39 federal convictions -- 36 individuals who entered guilty pleas and three individuals who were convicted by juries.
Assistant United States Attorneys Debra Kanof and Jose Luis Gonzalez are prosecuting this case on behalf of the Government.Remaining Five Quarter Horses Allegedly Part of Los Zetas Money Laundering Operation Sold for Approximately $3.1 MillionRead the Press Release
Tempting Dash Sold For Record $1.7 Million
The remaining five quarter horses along with four embryos, part of more than 400 seized by federal authorities in June 2012 in connection with an alleged Los Zetas money laundering operation, have been sold for approximately $3.1 million, including Tempting Dash which sold for a record $1.7 million, announced United States Attorney Robert Pitman and Internal Revenue Service Criminal Investigation Special Agent in Charge Steve McCollough.
The horses, which were sold Friday, November 1, 2013, at Heritage Place Auction Facility in Oklahoma City, OK, included Tempting Dash, winner of the Dash for Cash at Lone Star Park race track in Grand Prairie, Texas, on October 24, 2009; Mr. Piloto, $1 million All American Futurity winner at Ruidoso Downs on Labor Day, 2010; Do Not Tempt Me, Dashin Follies; and, Separate Fire.
United States Attorney Robert Pitman noted that the proceeds from the sale of the quarter horses, totaling close to $12 million, will be held in escrow pending a final forfeiture action. Court documents allege that the horses were bought by and for members of the Los Zetas drug cartel with proceeds from narcotics trafficking.
“Like all criminal organizations, the Zetas are motivated by money. Identifying and taking their assets is an important way to lay an axe to the root of the tree. The forfeiture of these assets would represent a major step in our efforts to interrupt the cartel’s activity within this country,” stated United States Attorney Pitman. “It's always an added bonus when we are able to make the cartels effectively pay the costs of their own prosecutions.”
“This investigation has helped to disrupt this alleged international drug cartel’s U.S.-based money laundering operations and demonstrates the lengths that US law enforcement will go to deprive criminal organizations of the fruits of their illegal activities,” stated IRS-CI Special Agent in Charge Steve McCullough.
The sale of the horses is being made as a result of a court order in U.S. v. Miguel Angel Trevino Morales, et al. (WDTX case number A12cr210) and in accordance with industry practices.
San Antonio Man Pleads Guilty to Sex Trafficking of A MinorRead the Press Release
Pelly Lee Mason, age 51, faces not less than thirty years and up to life in federal prison after pleading guilty to transporting a minor across state lines with intent to engage in criminal sexual activity.
Mason came to the attention of law enforcement after a victim’s parent reported that Mason had performed sexual acts on her minor child. The sexual acts had occurred on several occasions during a trip from Flagstaff, Arizona, to Orlando, Florida. Some of the acts occurred while they were in San Antonio, Texas. Mason admitted to having performed sexual acts on the minor child during this trip. Mason has previously been convicted of engaging in lewd and lascivious conduct with a minor for which he served five years in prison. As a result of that conviction, Mason was required to register as a sex offender but failed to register upon his release from prison. Seven other victims have been identified since his arrest early this year.
This case is being investigated by the Federal Bureau of Investigation (FBI). Assistant United States Attorney Bettina Richardson is prosecuting this case on behalf of the Government.
Federal Prison Sentences Handed Down in Crystal Methamphetamine Trafficking ConspiracyRead the Press Release
In San Antonio this morning, U.S. District Judge David A. Ezra sentenced Israel Hernandez, Jr., of Rio Bravo, TX, to 300 months in federal prison for his role in a crystal methamphetamine trafficking conspiracy plus an additional 30 months in federal prison for violating his supervised release announced United States Attorney Robert Pitman and Drug Enforcement Administration Special Agent in Charge Javier Pena.
On June 3, 2013, Hernandez pleaded guilty to one count of conspiracy to distribute a controlled substance. By pleading guilty, Hernandez, a self-purported drug transportation coordinator, admitted that between March and September in 2012, he conspired with San Antonio residents Carlos Ruiz and Andrew Kessler, II, to transport crystal methamphetamine from Brownsville to Laredo. On September 14, 2012, DEA Task Force agents seized approximately 15 pounds of 99.9% pure crystal methamphetamine inside Kessler’s vehicle while in Mission, TX. According to court records, Ruiz offered to pay Kessler $1,200 for transporting the six kilograms of crystal methamphetamine to Laredo. The next day, federal agents in San Antonio arrested Hernandez and Ruiz as they were attempting to locate Kessler and the missing crystal methamphetamine.
On Monday, Judge Ezra sentenced Carlos Ruiz to 15 years in federal prison for his role in the conspiracy. On August 8, 2013, Andrew Kessler was sentenced to seven years in federal prison for his role in the conspiracy.
The case was investigated by the Drug Enforcement Administration Task Force made up of investigators from the New Braunfels Police Department, San Antonio Police Department, Boerne Police Department, Balcones Heights Police Department, Comal County Sheriff’s Office, Guadalupe County Sheriff’s Office, Kendall County Sheriff’s Office and the Texas Department of Criminal Justice.Jury Convicts El Paso Attorney Marco Delgado in Connection with A Multi-Million Dollar Money Laundering SchemeRead the Press Release
In El Paso 47-year-old El Paso attorney Marco Antonio Delgado, a.k.a. Marco Delgado Licon, faces up to 20 years in federal prison after a jury convicted him of conspiracy to launder up to $600 million in illegal drug proceeds announced United States Attorney Robert Pitman and Homeland Security Investigations Special Agent in Charge Dennis Ulrich.
Based on evidence presented during trial, the jury found that from a period of time between 2007 and 2008, Delgado conspired with other individuals to launder $600 million in illegal drug proceeds for members of the Milenio Drug Trafficking Organization. Two episodes of money laundering demonstrated to the jury included a Department of Homeland Security seizure in September 2007 of $1,000,000 in U.S. Currency traveling from Atlanta, GA to Mexico via El Paso; and, an HSI seizure of $50,000 in drug proceeds, in July 2008, in Chicago, IL, which was transported to El Paso and deposited in Delgado’s Attorney Interest on Lawyers’ Trust Account (IOLTA) bank account.
Delgado, who has remained in federal custody since his arrest in November 2012, is scheduled to be sentenced at 10:30am on January 24, 2014, before United States Senior District Judge David Briones.
Delgado is currently set to go to trial again on November 18, 2013, based on a separate indictment which charges him with two wire fraud counts and 15 money laundering counts. According to that indictment, in January 2010, Delgado, as a legal representative of FGG Enterprises, Inc. (FGG) signed a $121 million contract between FGG and the Comision Federal de Electricidad (CFE), a Mexican-state-owned utility company, for the acquisition and installation of equipment at the Agua Prieta II power plant located in Agua Prieta, Sonora, Mexico. Pursuant to the agreement, payments from CFE to FGG were to be deposited into a FGG bank account located in El Paso. The indictment alleges that Delgado, for the purpose of personal enrichment and without the consent of the sole owner of FGG, submitted a fraudulent written request to the Banco Nacional de Comercio Exterior in Mexico which caused two wire transfers—one on March 8, 2010, in the amount of $20 million and one on July 6, 2010, in the amount of $12 million—to be deposited into a bank account he controlled located in the Turks and Caicos Islands. The indictment further alleges that Delgado subsequently wire transferred approximately $1.15 million from the Turks and Caicos Island bank account to bank accounts in El Paso; Taos, NM; and, Pittsburg, PA, in order to conceal or disguise the nature, location, source ownership or the control of the proceeds from his scheme.
Upon conviction, Delgado faces up 20 years in federal prison per count. 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.
This indictment resulted from an investigation by Homeland Security Investigations (HSI). Assistant United States Attorneys Debra Kanof and Anna Arreola are prosecuting these cases on behalf of the Government.
Eagle Pass Businessman Pleads Guilty in Connection with Maverick County Bribery, Kickback and Bid-Rigging SchemeRead the Press Release
In Del Rio, Hipolito Amaya, 35-year-old owner of AM-ROD Construction based in Eagle Pass, faces up to ten years in federal prison after pleading guilty to a bribery charge in connection with an alleged bribery, kickback and bid-rigging scheme in Maverick County announced United States Attorney Robert Pitman and FBI Special Agent in Charge Armando Fernandez.
Appearing before United States Magistrate Judge Collis White this afternoon, Amaya admitted that in May 2011, he submitted a $35,800 bid to Maverick County to construct a concrete sidewalk on Lago Vista in Precinct 4 of Maverick County. Maverick County issued him a $17,900 check to commence work and then a $17,900 check for the completion of the sidewalk. Amaya further admitted that he made cash payments to two Maverick County employees so that he could be paid in full for work he never performed.
Amaya remains on bond pending sentencing scheduled for March 2014.
This ongoing investigation is being conducted by the Federal Bureau of Investigation and the Texas Department of Public Safety. 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 Michael Galdo is prosecuting this case on behalf of the Government.
Permian Basin Men Convicted in Multi-Million Dollar Bank Fraud SchemeRead the Press Release
Raymond Holguin, Jr., of Odessa, Texas, faces up to 30 years in federal prison after pleading guilty this morning to defrauding My Community Federal Credit Union of millions of dollars announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent in Charge Douglas E. Lindquist, El Paso Division.
Holguin, age 35, was the third man to enter a plea to conspiracy to commit bank fraud in connection with this investigation. Michael Franco, age 40, and Gustavo Pizarro, age 37, both of Midland, previously entered guilty pleas to the same charge and are awaiting sentencing.
According to court records, beginning in April 2007, Holguin, Pizarro and Franco engaged in an 18-month-long scheme that defrauded the FDIC-insured financial institution through the issuance of fraudulent car loans. Holguin, operator of Motor City, an auto dealership in Odessa, TX; Pizarro, General Sales Manager at Motor City; and, Franco, a loan officer at My Community Federal Credit Union, all devised a plan to approve car loans for customers who did not meet the credit union’s lending standards. Holguin and Pizarro presented auto loan applications to Franco that included false information such as inflated income. Holguin and Pizarro would also add amenities to the cars that did not exist in an effort to increase the value of the car and receive a larger loan amount. Franco never verified any of the information contained in the loan documents before processing the loans and, in return, was paid a kickback by Holguin for every car loan that was approved. The scheme resulted in Franco approving more than 300 fraudulent car loans on behalf of Holguin and Pizarro which led to a loss at My Community Federal Credit Union of approximately $3.9 million dollars.Franco is scheduled to be sentenced on November 22, 2013 before United States District Judge Robert A. Junell. Pizarro is scheduled for January 9, 2014. A sentencing date for Holguin has yet to be scheduled.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney V. LaTawn Warsaw.
Federal Judge in El Paso Sentences Michigan Businessman for Role in Scheme to Defraud the El Paso Independent School DistrictRead the Press Release
In El Paso yesterday, U.S. District Judge Frank Montalvo sentenced 61-year-old Gary Lange of Haslett, Michigan, to two years in federal prison and ordered him to pay more than $2.89 million in restitution for scheming to secure and maintain a lucrative El Paso Independent School District special education services contract announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent in Charge Douglas E. Lindquist.
In February 2009, Lange pleaded guilty to one count of conspiracy to commit mail fraud and deprivation of honest services. By pleading guilty, Lange admitted that from February 2003 to October 2007, he conspired with his business partner Joseph O’Hara of Albany, NY, former El Paso Independent School District Associate Superintendent Tomas Gabaldon and former El Paso Independent School District Trustee Sal Mena to fraudulently secure and maintain a contract to provide software to the special education department of EPISD and to provide services to obtain federal and state reimbursement funds for special education programs. Lange further admitted that he facilitated O’Hara in paying $100,000 in bribes to Gabaldon and a $5,000 kickback to Mena in 2005 for their help in securing the contract for O’Hara’s company, Strategic Government Solutions, Inc. SGS failed to provide working software to EPISD as required by the contract and it submitted improper claims for reimbursement funds.
“The sentencing of Mr. Lange once again demonstrates the continued commitment of the FBI to bring to justice those individuals who erode the public’s confidence in those entrusted to manage our educational institutions. The FBI will continue to aggressively pursue individuals who place their personal interests above those of the taxpayers of El Paso,” stated FBI Special Agent in Charge Douglas E. Lindquist.
Gabaldon and O’Hara have been sentenced to four years and three years, respectively, in federal prison and ordered to pay the restitution to EPISD for their roles in the scheme. Mena, who also pleaded guilty to a conspiracy charge, is scheduled to be sentenced at 9:00am on December 10, 2013, before Judge Montalvo.
The case was investigated by the Federal Bureau of Investigation along the U.S. Department of Education—Office of Inspector General. Assistant United States Attorneys Chris Skillern, Donna Miller and Laura Gregory prosecuted this case on behalf of the Government.
Federal Jury Convicts New Mexico Man for Leaking Information About Criminal InvestigationRead the Press Release
A retired educator and husband of a federal prosecutor in Albuquerque, New Mexico, faces potential federal prison time after a federal jury convicted him late Friday afternoon of leaking information regarding a criminal investigation to a target announced United States Attorney Robert Pitman.
The jury convicted Danny Burnett of one count of giving notice of certain electronic surveillance and one count of making a false statement to federal investigators. Evidence presented during trial revealed that on February 17, 2011, Burnett met at an Albuquerque restaurant with long-time friend Columbus Police Chief Angelo Vega and advised him that federal investigators had a wiretap on Vega’s phone. Burnett was also convicted of making a false statement to federal investigators on February 28, 2012, when he denied notifying Vega that he was the subject of a firearms trafficking investigation.
“Breaching the integrity of a criminal investigation not only compromises the ability of authorities to enforce the law but, more importantly, jeopardizes the safety of law enforcement officers. This prosecution demonstrates that we will pursue leaks and prosecute those responsible for unlawfully disclosing sensitive information,” stated United States Attorney Robert Pitman.
Burnett, who remains on bond pending sentencing, faces up to five years in federal prison per count. Sentencing is scheduled for January 14, 2014.
This case was investigated by agents with the Department of Justice Office of the Inspector General (DOJ-OIG), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and Homeland Security Investigations (HSI). Assistant United States Attorneys Steven Spitzer and Greg McDonald from the Western District of Texas are prosecuting this case on behalf of the government.
San Antonio Man Sentenced to Federal Prison for Downloading Child PornRead the Press Release
In San Antonio, 55-year-old Victor Zamarron, a former civilian contractor at Brooks Army Medical Center, was sentenced to 210 months in federal prison followed by 50 years of supervised release for downloading child pornography announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent in Charge Armando Fernandez, San Antonio Division.
In September 2012, a routine information technology inspection revealed that Zamarron was downloading and viewing child pornography through the government computer system. A subsequent search warrant executed by FBI agents at the defendant’s residence resulted in the seizure of two computers. A forensics examination of those computers revealed the presence of more than 30,000 images depicting child pornography. On June 24, 2013, Zamarron pleaded guilty to one count of receipt of child pornography.
This investigation was conducted by the Federal Bureau of Investigation together with the U.S. Army Criminal Investigation Division at Fort Sam Houston in San Antonio. Assistant United States Attorney Tracy Thompson prosecuted this case on behalf of the government.Bank Robber Sentenced to Federal Prison for Series of Robberies in Texas and MichiganRead the Press Release
In San Antonio, 34-year-old Michael Albert Amirante was sentenced to 63 months in federal prison for robbing several banks in Texas and Michigan announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent in Charge Armando Fernandez, San Antonio Division.
In addition to the prison term, United States District Judge Orlando Garcia ordered that Amirante pay $11,352 restitution to the financial institutions he robbed and be placed under supervised release for a period of three years after completing his prison term.
In January, Amirante pleaded guilty to three counts of unarmed bank robbery. By pleading guilty, Amirante admitted that he robbed the San Antonio Federal Credit Union (SACU) branch on Bandera Road on August 30, 2012; the First Convenience Bank branch in Duncanville, TX, on April 18, 2012; and, the First Convenience Bank branch in Mesquite, TX, on May 29, 2012. Amirante also admitted to robbing the Fifth Third Bank in Lansing, MI, on December 21, 2011.
Amirante has been in federal custody since being arrested by FBI agents on August 30, 2012, following the SACU robbery. This investigation was conducted by FBI agents in San Antonio, Dallas and Lansing together with the San Antonio, Duncanville, Mesquite and Lansing Police Departments. Assistant United States Attorney Michael Hardy prosecuted this case on behalf of the government.
El Paso Man Sentenced to 15 Years in Federal Prison for Firearms Straw Purchasing and Smuggling OperationRead the Press Release
In El Paso this morning, U.S. District Judge Frank Montalvo sentenced 25-year-old Julio Adrian Pesqueira-Galaviz, to the statutory maximum of 15 years in federal prison followed by five years of supervised release for his leadership role in a scheme to illegally purchase firearms in the U.S. then smuggle them into Mexico for the purposes of arming members of the Sinaloa Drug Trafficking Organization announced United States Attorney Robert Pitman, Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Robert Champion, Dallas Division, and Drug Enforcement Administration Special Agent in Charge Joseph M. Arabit, El Paso Division.
On June 26, 2013, Pesqueira pleaded guilty to one count each of conspiracy to make a false statement during the purchase of a firearm; false statement during the purchase of a firearm; and, conspiracy to transfer a firearm for use in a crime of violence or drug trafficking crime. By pleading guilty, Pesqueira admitted that from July 2010 to May 2013, he purchased firearms, as well as provided money to individuals in order for them to purchase firearms, from El Paso area gun dealers to include a Barrett .50 caliber rifle and an assortment of various military style semi-automatic firearms including, AK-47’s, AR-15’s and Draco 7.62x39 caliber pistols.
Pesqueira is the first of 11 defendants charged in this case to be sentenced. This investigation was conducted by ATF and DEA agents together with investigators from Homeland Security Investigations and the El Paso Police Department.
Mike Yassine Receives Three Years in Federal Prison in Austin Tax CaseRead the Press Release
In Austin this morning, U.S. District Judge Sam Sparks sentenced 41-year-old Hussein Ali “Mike” Yassine, to three years in federal prison and ordered him to pay over $2.5 million restitution to the Internal Revenue Service for engaging in a tax fraud scheme using his Austin nightclubs. Judge Sparks ordered that the three year term of imprisonment run consecutive to the 151–month prison term Yassine is currently serving for money laundering.
On February 6, 2013,Yassine pleaded guilty to one count of procuring the preparation of a false Income Tax Return. By pleading guilty, Yassine admitted that in October 2010, he provided a professional tax preparer with false information to be included in Yassine’s 2009 federal Income Tax Return. According to court documents, figures provided by Yassine understated by hundreds of thousands of dollars the actual gross receipts generated by his downtown Austin night clubs--Spill, Qua, Kiss & Fly, Pure and Malaia—in 2009.
In January, Yassine was sentenced to 151 months in federal prison after a jury convicted him on money laundering charges. The jury found that in 2008 and 2009, Yassine used several business establishments, including the above mentioned night clubs, to launder over $200,000 in cash, which he believed to be the proceeds of narcotics trafficking.
This investigation was conducted by agents and investigators with the Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation and the Austin Police Department together with the Drug Enforcement Administration, Texas Attorney General’s Office, Texas Alcoholic Beverage Commission and the Texas Comptroller’s Office. Assistant United States Attorneys Gregg Sofer and Alan Buie prosecuted this case on behalf of the Government.
San Antonio Area Convicted Felon Detained Pending Trial on Federal Firearm Possession ChargeRead the Press Release
Felon-In-Possession Charge Stems From the Illegal Sale of Firearms During an Austin Gun Show
In San Antonio, 65-year-old Manuel “Manny” Rodriguez of Spring Branch, TX, will remain in federal custody pending trial for being a convicted felon in possession of a firearm announced United States Attorney Robert Pitman and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Special Agent in Charge Melvin D. King, Houston Division.
A federal criminal complaint filed last week alleges that during a gun show in Austin on August 18, 2013, Rodriguez was in possession of an Intratec AB-10 9mm pistol which he later sold to an undercover officer for $650.00. The complaint further states that Rodriguez served 47 months in federal prison based on a 2002 conviction in the Central District of California for possession of a machine gun and dealing firearms without a ATF license.
Based upon the criminal complaint, ATF agents on Friday arrested Rodriguez and executed a search warrant at the defendant’s residence where they seized a total of 76 firearms and approximately $15,000 in U.S. Currency. The seized firearms included numerous AR-15 and AK-47 assault rifles.
This afternoon, United States Magistrate Judge John Primomo ordered Rodriguez held without bond. Rodriguez faces ten years in federal prison upon conviction.
This continuing investigation is being conducted by ATF special agents in Austin and San Antonio together with Homeland Security Investigations (HSI) agents. Assistant United States Attorney Jay Hulings is prosecuting this case on behalf of the Government.
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.
Final Defendant Sentenced to Federal Prison in Connection with Undocumented Immigrant Smuggling Incident That Resulted in 3 DeathsRead the Press Release
In San Antonio this afternoon, 26–year-old Jose Abram Lopez-Lozano, a resident of Michoacàn, Mexico, was sentenced to 36 months in federal prison in connection with an undocumented alien smuggling incident which resulted in three deaths announced United States Attorney Robert Pitman and Homeland Security Investigations (HSI) Special Agent in Charge Janice Ayala.
On March 27, 2013, Lopez-Lozano pleaded guilty smuggling undocumented aliens for financial gain. On the same day, his co-defendant, 32-year-old Javier Silva-Morales, a resident of Monterrey, Mexico, pleaded guilty to one count of smuggling undocumented aliens resulting in death. By pleading guilty, both admitted to transporting smuggled undocumented aliens on February 6, 2013, from Falfurrias, TX, to Houston when a Wilson County Sheriff’s deputy attempted to conduct a traffic stop near Poth, TX. A vehicle chase ensued. After losing sight of the vehicle, deputies subsequently discovered several individuals at the end of an open field standing on top of what appeared to be the same vehicle which was now submerged under water. A total of 13 individuals, including both defendants, were apprehended by sheriff’s deputies with assistance from Texas Department of Public Safety troopers. HSI agents later determined that the 13 were in the United States without proper documentation and placed them under arrest. A Texas Department of Public Safety dive team dispatched to the scene recovered three bodies from the bottom of the water near the vehicle.
On July 7, 2013, U.S. District Judge Xavier Rodriguez sentenced Silva-Morales to 150 months in federal prison.
This case was investigated by HSI, the Texas Department of Public Safety and the Wilson County Sheriff’s Office. Special Assistant United States Attorney Christina Playton prosecuted this case on behalf of the Government.Defendant in Los Zetas Money Laundering Case, His Son, and A Business Associate Charged with Attempting to Bribe A Federal JudgeRead the Press Release
Federal authorities have charged 52-year-old Veracruz, Mexico businessman Francisco Colorado Cessa, his son, 25–year-old Francisco Colorado Cessa, Jr., and a business associate, 52–year-old Ramon Segura Flores for attempting to bribe a federal judge announced United States Attorney Robert Pitman and FBI Special Agent in Charge Armando Fernandez, San Antonio Division.
On May 9, 2013, a federal jury convicted Colorado Cessa of conspiring to commit money laundering 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. Yesterday afternoon, Colorado Cessa was sentenced to the statutory maximum of 20 years in federal prison.
A federal criminal complaint filed yesterday charges Colorado Cessa, Colorado Cessa, Jr. and Segura Flores with conspiracy to bribe a federal judge. The complaint alleges that over the past couple of months the defendants conspired to pay a $1.2 million bribe to a federal judge in order to secure a reduced sentence for Colorado Cessa. According to the criminal complaint, at no time before or during this investigation was the judge involved in the alleged criminal activity.
“We have said from the beginning that this case represents our commitment to keep the violence and corruption associated with Mexican drug cartels out of the United States. The sentences handed down yesterday emphasize our determination to seek the most severe penalties for importing the brand of corruption that has become endemic in Mexico. The latest allegation, if proven, demonstrates that individuals associated with the most violent drug cartel believe that they can corrupt what we hold as the bedrock of American justice – the United States Courts. This community should rest assured that we will stop at nothing to send the message that we are one step ahead of them and if they continue to try to function as they do in Mexico, we will find them, we will stop them, and we will do whatever it takes to ensure that they are punished to the full extent of the law,” stated United States Attorney Robert Pitman.
FBI agents arrested Colorado Cessa, Jr., and Segura Flores yesterday evening without incident. All three remain in federal custody at this time. Initial appearances are scheduled for 2:00 pm this afternoon before United States Magistrate Judge Andrew Austin in Austin.
Upon conviction, the defendants face up to five years in federal prison and a maximum $250,000 fine. This case is being investigated by the FBI.
A criminal complaint 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.
Austin Horse Trainer Sentenced to Federal Prison in Multi-Million Dollar Money Laundering Conspiracy Involving Los Zetas Drug Trafficking Proceeds, Extortion, and BriberyRead the Press Release
In Austin, Eusevio Maldonado Huitron, a 50-year-old horse trainer residing in Austin was sentenced this morning to 97 months in federal prison followed by three years of supervised release for his role in a complex conspiracy 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 announced United States Attorney Robert Pitman, FBI Special Agent in Charge Armando Fernandez, Richard Weber, Chief, Internal Revenue Service Criminal Investigation and DEA Special Agent in Charge Javier Pena.
United States District Judge Sam Sparks this morning also sentenced co-defendant Raul Ramirez, age 21 of El Paso, TX, to one year plus one day in federal prison after pleading guilty prior to trial to the conspiracy charge. Other co-defendants who pleaded guilty to various federal charges prior to trial received probation sentences today including: Zulema Trevino, age 39 (3 years); Alexandra Garcia Trevino, age 22, of Oceanside, CA, (2 years); 33-year-old horse trainer Adan Farias of Norco, CA, (3 years); and 29–year-old Felipe Alejandro Quintero of Los Alamitos, CA, (3 years). Judge Sparks also ordered that Farias, Quintero and Ramirez each pay a $3,600 fine. Sentencing for 27-year-old Carlos Miguel Nayen Borbolla of Santa Anna, CA, was postponed.
Yesterday, Judge Sparks sentenced 46-year-old Jose Trevino Morales of Balch Springs, TX, and Francisco Colorado Cessa, a 52-year-old Veracruz, Mexico businessman, each to 240 months in federal prison; and, Fernando Solis Garcia, a 30-year-old horse trainer and purchasing agent from Ruidoso, NM, to 160 months in federal prison followed by three years of supervised release for their roles in the money laundering scheme. Jose Trevino Morales is the brother of purported Los Zetas leaders, Miguel Trevino Morales (aka “40”) and Oscar Omar Trevino Morales (aka “42”).
On May 9, 2013, a federal jury convicted Jose Trevino Morales, Francisco Colorado Cessa, Fernando Solis Garcia, and Eusevio Maldonado Huitron of one count of conspiracy to commit money laundering. Evidence presented during trial revealed that Los Zetas are a powerful drug cartel based in Mexico and generate multi-million dollar revenues from drug trafficking. Since 2008, Miguel and Oscar Trevino Morales would direct portions of the bulk cash generated from the sale of illegal narcotics to Jose Trevino and his wife, Zulema Trevino, for purchasing, training, breeding and racing American quarter horses in the United States.
Testimony also revealed a shell game by the defendants involving straw purchasers and transactions worth millions of dollars in New Mexico, Oklahoma, California and Texas to disguise the source drug money and make the proceeds from the sale of quarter horses or their race winnings appear legitimate. Furthermore, the defendants implemented a scheme to structure cash deposits in amounts under $10,000 in order to circumvent mandatory bank reporting requirements.
Over 400 quarter horses (which were seized by federal authorities in June 2012 as part of the above-mentioned money laundering operation) have been sold for approximately $9 million. Most of the horses were sold at Heritage Place Auction Facility in Oklahoma City, Oklahoma in the past year including A Dash of Sweet Heat, which sold for $1 million. Approximately 100 broodmares were sold prior to auction for approximately $35,000. The federal government still retains possession of five quarter horses, including Tempting Dash, winner of the Dash for Cash at Lone Star Park race track in Grand Prairie, Texas, on October 24, 2009; Mr. Piloto, $1 million All American Futurity winner at Ruidoso Downs on Labor Day 2010; Dashin Follies; Separate Fire; Y516, a yearling seized in Lexington, OK; and four embryos transferred from donor mares, Dashin Follies and Separate Fire.
U.S. Attorney Pitman noted that the proceeds from the sale of these quarter horses are being held in escrow pending the resolution of a forfeiture action. The Government also seeks the forfeiture of real property in Lexington, OK; farm and ranch equipment located at that site; and funds contained in multiple bank accounts allegedly used in the defendants’ scheme. The Government also seeks a monetary judgment in the amount of $60 million representing property involved in and derived from the conspiracy.
Authorities continue to seek the apprehension of seven co-defendants in this case including purported leaders of the Los Zetas, Miguel Trevino Morales (aka “40”) and his brother, 39-year-old Oscar Trevino Morales (aka “42”), as well as 32–year-old Victor Manuel Lopez, 41-year-old Sergio Guerrero Rincon, 41-year-old Luis Gerardo Aguirre, Erick Jovan Lozano Diaz and Gerardo Garza Quintero.
This investigation was conducted by agents with the Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation and the Drug Enforcement Administration with assistance from the United States Marshals Service, Immigration and Customs Enforcement Homeland Security Investigations (ICE-HSI) and U.S. Customs and Border Patrol, as well as local law enforcement agents in Irving, TX, Lorena, TX, Bruceville-Eddy, TX, Fort Worth, TX and Laredo, TX. The investigation received assistance from the Texas Army National Guard, Cleveland County (OK) Sheriff’s Office, and the Oklahoma and New Mexico Racing Commissions. The U.S. Attorney’s Office for the Eastern District of Texas prosecuted several members of the Los Zetas drug cartel on drug trafficking charges related to this conspiracy and provided substantial assistance to this investigation. The U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) provided assistance with the forfeiture action in this case.
Maverick County Commissioner Cesar Flores Pleads GuiltyRead the Press Release
In Del Rio, Texas this morning, Maverick County Precinct Four Commissioner Cesar Flores, age 46 of Eagle Pass, Texas, pleaded guilty to his role in a bribery, kickback and bid-rigging scheme announced United States Attorney Robert Pitman and FBI Special Agent in Charge Armando Fernandez. This is the third Maverick County Commissioner to plead guilty as part of this investigation.
Flores pleaded guilty to count one of his indictment, which charged him with receiving bribes. 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—those contracts involved in excess of $5,000.
Flores faces up to ten years in federal prison, a $250,000 fine, three years of supervised release, and, pursuant to his plea agreement, he will pay restitution as ordered by the Court at sentencing. Flores will appear before Judge Alia Moses for sentencing at a date to be determined.
Assistant United States Attorney Michael Galdo is prosecuting this case on behalf of the Government.
This ongoing investigation is being conducted by the Federal Bureau of Investigation and the Texas Department of Public Safety. 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.Federal Prison Terms Handed Down in Multi-Million Dollar Money Laundering Conspiracy Involving Los Zetas Drug Trafficking Proceeds, Extortion and BriberyRead the Press Release
In Austin this afternoon, three men including Jose Trevino Morales, the brother of purported Los Zetas leaders, Miguel Trevino Morales (aka “40”) and Oscar Omar Trevino Morales (aka “42”), were sentenced to lengthy federal prison terms for their roles in a complex conspiracy 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 announced United States Attorney Robert Pitman, FBI Special Agent in Charge Armando Fernandez, Richard Weber, Chief, Internal Revenue Service Criminal Investigation and DEA Special Agent in Charge Javier Pena.
United States District Judge Sam Sparks sentenced Jose Trevino Morales, age 46, of Balch Springs, TX, and Francisco Colorado Cessa, a 52-year-old Veracruz, Mexico businessman, each to 240 months in federal prison followed by three years of supervised release. Judge Sparks also sentenced Fernando Solis Garcia, a 30-year-old horse trainer and purchasing agent from Ruidoso, NM, to 160 months in federal prison followed by three years of supervised release. Judge Sparks also remanded Garcia into federal custody following today’s hearing.
“The activities of Mexican drug cartels have taken a terrible toll within Mexico. This prosecution and the sentences imposed today should send a clear message to those who would attempt to import their brand of corruption and violence into the United States. We will find you, we will prosecute you and we will seek the most severe consequences the law allows,” stated United States Attorney Robert Pitman.
On May 9, 2013, a federal jury convicted Jose Trevino Morales, Francisco Colorado Cessa, Fernando Solis Garcia, and Eusevio Maldonado Huitron of one count of conspiracy to commit money laundering. Evidence presented during trial revealed that Los Zetas are a powerful drug cartel based in Mexico and generate multi-million dollar revenues from drug trafficking. Since 2008, Miguel and Oscar Trevino Morales would direct portions of the bulk cash generated from the sale of illegal narcotics to Jose Trevino and his wife, 39-year-old Zulema Trevino, for purchasing, training, breeding and racing American quarter horses in the United States.
Testimony also revealed a shell game by the defendants involving straw purchasers and transactions worth millions of dollars in New Mexico, Oklahoma, California and Texas to disguise the source drug money and make the proceeds from the sale of quarter horses or their race winnings appear legitimate. Furthermore, the defendants implemented a scheme to structure cash deposits in amounts under $10,000 in order to circumvent mandatory bank reporting requirements.
“Today’s sentencing marks the successful culmination to a complex, intensive investigation where the FBI, working together with U.S. Attorney’s Office and our law enforcement partners, has demonstrated the ability to dismantle the financial arm of a violent and ruthless drug cartel which has attempted to influence and control legitimate U.S. enterprises and threatened the safety of our community,” stated FBI Special Agent in Charge Armando Fernandez.
Drug Enforcement Administration Special Agent in Charge Javier F. Peña stated, “DEA is satisfied with today’s sentencings. Each sentence handed out today represents the relentless hard work and unyielding dedication DEA and its counterparts utilized to bring the defendants to justice.”
Over 400 quarter horses (which were seized by federal authorities in June 2012 as part of the above-mentioned money laundering operation) have been sold for approximately $9 million. Most of the horses were sold at Heritage Place Auction Facility in Oklahoma City, Oklahoma in the past year including A Dash of Sweet Heat, which sold for $1 million. Approximately 100 broodmares were sold prior to auction for approximately $35,000. The federal government still retains possession of five quarter horses, including Tempting Dash, winner of the Dash for Cash at Lone Star Park race track in Grand Prairie, Texas, on October 24, 2009; Mr. Piloto, $1 million All American Futurity winner at Ruidoso Downs on Labor Day 2010; Dashin Follies; Separate Fire; Y516, a yearling seized in Lexington, OK; and four embryos transferred from donor mares, Dashin Follies and Separate Fire.
U.S. Attorney Pitman noted that the proceeds from the sale of these quarter horses are being held in escrow pending the resolution of a forfeiture action. The Government also seeks the forfeiture of real property in Lexington, OK; farm and ranch equipment located at that site; and funds contained in multiple bank accounts allegedly used in the defendants’ scheme. The Government also seeks a monetary judgment in the amount of $60 million representing property involved in and derived from the conspiracy.
“Today’s sentencing of top leaders of the Los Zetas crime syndicate is a decisive blow against its drug trafficking and money laundering network. It also sends a clear message to those who attempt to hide their ill-gotten gains through investment in legitimate businesses,” said Richard Weber, Chief, IRS Criminal Investigation. “All financial transactions leave a trail and we have the unique expertise to follow those leads. The special agents of IRS Criminal Investigation are committed to taking the profit away from drug traffickers and putting those individuals in jail. IRS Criminal Investigation was proud to provide this financial expertise as we worked alongside our law enforcement partners and bring these brutal criminals to justice.”
Authorities continue to seek the apprehension of seven co-defendants in this case including purported leaders of the Los Zetas, Miguel Trevino Morales (aka “40”) and his brother, 39-year-old Oscar Trevino Morales (aka “42”), as well as 32–year-old Victor Manuel Lopez, 41-year-old Sergio Guerrero Rincon, 41-year-old Luis Gerardo Aguirre, Erick Jovan Lozano Diaz and Gerardo Garza Quintero. Co-defendants Zulema Trevino, Jose Trevino Morales’ daughter Alexandra Garcia Trevino, age 22, of Oceanside, CA, 33-year-old horse trainer Adan Farias of Norco, CA, 27-year-old Carlos Miguel Nayen Borbolla of Santa Anna, CA, 29–year-old Felipe Alejandro Quintero of Los Alamitos, CA, Eusevio Maldonado Huitron, a 50-year-old horse trainer residing in Austin; and 21-year-old Raul Ramirez of El Paso, TX, are scheduled to be sentenced tomorrow beginning at 9:00am before Judge Sparks in Austin.
This investigation was conducted by agents with the Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation and the Drug Enforcement Administration with assistance from the United States Marshals Service, Immigration and Customs Enforcement Homeland Security Investigations (ICE-HSI) and U.S. Customs and Border Patrol, as well as local law enforcement agents in Irving, TX, Lorena, TX, Bruceville-Eddy, TX, Fort Worth, TX and Laredo, TX. The investigation received assistance from the Texas Army National Guard, Cleveland County (OK) Sheriff’s Office, and the Oklahoma and New Mexico Racing Commissions. The U.S. Attorney’s Office for the Eastern District of Texas prosecuted several members of the Los Zetas drug cartel on drug trafficking charges related to this conspiracy and provided substantial assistance to this investigation. The U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) provided assistance with the forfeiture action in this case.
Normangee, TX Police Chief Arrested in Connection with Methamphetamine Trafficking InvestigationRead the Press Release
Normangee Police Chief Joseph Ray “Jody” Navarro, age 40, is in federal custody charged with allegedly using a law enforcement computer system to aid a methamphetamine trafficker announced United States Attorney Robert Pitman, Texas Department of Public Safety (DPS) Director Steven McCraw and Leon County Sheriff Kevin Ellis.
A criminal complaint, filed last Thursday and unsealed today, charges the Madisonville, Texas, resident with one count of intentionally exceeding authorized access to a protected computer. According to the criminal complaint, in May 2013, Navarro ran a background check on a name supplied to him by suspected methamphetamine trafficker and Normangee resident Brenda Antanette Evans, age 45.
A separate, but related, criminal complaint filed last Thursday and unsealed today, charges Evans and 25–year-old Joshua Troy Thomas of Normangee with one count of possession with intent to distribute methamphetamine. According to that complaint, on April 26, 2013, during an undercover investigation, Evans purchased close to one ounce of methamphetamine from Thomas on behalf of an undercover agent for approximately $1,200.
Authorities arrested Navarro and Thomas yesterday without incident. Both had their Initial Appearances in Federal court this morning and are scheduled to have a detention hearing on September 3, 2013, before United States Magistrate Judge Jeffrey C. Manske in Waco. Evans has yet to be apprehended. Upon conviction, Navarro faces up to five years in federal prison and a maximum $250,000 fine; Thomas and Evans, up to 20 years in federal prison and a maximum $250,000 fine.
This ongoing investigation is being conducted by the Texas Department of Public Safety Criminal Investigation Division, Leon County Sheriff’s Office and the Federal Bureau of Investigation. Agents with the Drug Enforcement Administration as well as Deputy U.S. Marshals assisted with the arrests. Assistant United States Attorney Mary Kucera is prosecuting this case on behalf of the Government.
A criminal complaint 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.
Alleged El Paso Cell Ringleader for Vicente Carrillo Fuentes Drug Trafficking Organization Detained Pending TrialRead the Press Release
In El Paso, 36-year-old Manuel Gerardo Velasquez (aka “Shorty”), an El Paso cell ringleader for the Vicente Carrillo Fuentes drug trafficking organization, will remain in federal custody pending trial for allegedly operating a Continuing Criminal Enterprise (CCE) responsible for the smuggling and distribution of more than 1,000 kilograms of marijuana and the repatriation of drug proceeds to the Republic of Mexico announced United States Attorney Robert Pitman and Drug Enforcement Administration Special Agent in Charge Joseph M. Arabit.
This morning, Velasquez waived his right to a detention hearing originally scheduled for today in United States Magistrate Court in El Paso. A 13-count federal grand jury indictment returned on August 7, 2013, charges Velasquez and others with one count of conspiracy to possess with intent to distribute marijuana. The indictment alleges that from January 1997 until the present, the defendants conspired to distribute more than 1,000 kilograms of marijuana throughout Texas, Oklahoma and into Kansas. In addition to the drug conspiracy charge, Velasquez is charged with one count of operating a continual criminal enterprise, one count of conspiracy to commit money laundering, eight counts of aiding and abetting the intentional possession of marijuana; and, two counts of maintaining a drug involved premise. The indictment also seeks the criminal forfeiture of proceeds derived from the criminal scheme including cash and eight real estate properties in El Paso; Afton, OK; and, Grove, OK. During this investigation, authorities have seized some 3,800 pounds of marijuana and approximately $10,000 in U.S. Currency.
Other defendants charged in this indictment include: 39-year-old Jose Antonio Cabral-Espinoza, a Mexican citizen residing in El Paso; 30-year-old Juan Carlos Campa-Gutierrez of Juarez, Mexico; 44-year-old Cesar Ricardo Olague-Duran, of Juarez, Mexico; 47-year-old Octavio Alonso Montenegro-Muniz of El Paso; 58-year-old Cecil Ellis Blythe of Afton, OK; 32-year-old Carlos Alberto Gijon of El Paso; 31-year-old Daniel Medina of El Paso; 44-year-old Mario Garcia-Reveles, a Mexican citizen residing in El Paso; 31-year-old Joshua Lee Harris of Wichita, KS; 61-year-old Richard Lee Harris of Wichita, KS; 31-year-old Endi Alberto Renteria Bravo of Wichita, KS; 74-year-old Gilberto Velasquez, Sr., of El Paso; 66-year-old Victoria Consuelo Velasquez of El Paso; 52-year-old Sally Barraza-Mena of El Paso; and, 40-year-old Maria Elena Avila of El Paso. Blythe, Gijon, Medina, Gilberto and Victoria Velasquez, Barraza and Avila have been released on bond pending trial. The other named defendants are in custody.
“The numerous arrests and seizures that occurred in this investigation have severely disrupted the operations of this drug trafficking organization. In El Paso and all across our region, DEA and our partners are determined to continue to identify drug traffickers, shut down their operations and bring them to justice,” stated DEA Special Agent in Charge Joseph M. Arabit, El Paso Division.
Velasquez faces between 20 years and life in federal prison upon conviction of the CCE charge. All of the defendants face between ten years and life in federal prison upon conviction of the drug trafficking conspiracy charge.
This case resulted from an investigation by the Drug Enforcement Administration together with Homeland Security Investigations, U.S. Border Patrol, U.S. Marshals Service, El Paso County District Attorney’s Office, El Paso Police Department, Anthony Police Department, El Paso County Sheriff’s Office and the Texas Office of the Attorney General.
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.
Austin Man Pleads Guilty to Bank Robbery and Firearms ChargesRead the Press Release
In Austin, 34-year-old Antonio Cervantez faces federal prison time after pleading guilty to federal charges stemming from a bank robbery in May announced United States Attorney Robert Pitman and FBI Special Agent in Charge Armando Fernandez, San Antonio Division.
Appearing before United States Magistrate Judge Mark Lane this afternoon, Cervantez pleaded guilty to one count of bank robbery and one count of possession of a firearm during a crime of violence. By pleading guilty, Cervantez admitted that on the afternoon of May 29, 2013, he robbed the Bank of America located on West Parmer Lane in Austin. A bank customer, who witnessed the robbery from the drive-through banking lane, called the police and followed Cervantez after he fled the scene. Cervantez drove to his residence in the 4300 block of Northridge where authorities subsequently arrested him and recovered approximately $30,000 stolen from the bank and a .380 caliber firearm.
Cervantez, who has remained in custody since his arrest on May 29, 2013, faces up to 25 years in federal prison on the bank robbery charge and a mandatory seven year consecutive prison term for the firearm charge. He will be sentenced at a later date by United States District Judge Sam Sparks.
This case was investigated by the Austin Violent Crime Fugitive Task Force. The Task Force is made up of investigators from the Federal Bureau of Investigation, Austin Police Department and the Round Rock Police Department. Assistant United States Attorney Gregg N. Sofer is prosecuting this case on behalf of the Government.
Former UTSA Projects Manager Indicted by Federal Grand Jury in Connection with A Bribery SchemeRead the Press Release
A federal grand jury in San Antonio this week returned a bribery indictment against 41–year-old James Paul Council, a former project manager in the Facilities Department at the University of Texas at San Antonio, and three other San Antonio area residents in connection with a bribery scheme announced United States Attorney Robert Pitman and FBI Special Agent in Charge Armando Fernandez. As of today, all four defendants have surrendered to federal authorities.
The 17-count indictment charges Council; 47-year-old Alfredo Romero Gonzalez, owner of Power Source Electric, an electrical construction and repair business in San Antonio; 60-year-old Power Source Electric chief estimator and project manager Magin Villalon (a.k.a. “Buddy”); and, Villalon’s wife, 56-year-old Sarah Anne Luna with one count of conspiracy to commit bribery concerning programs receiving Federal funds and four counts of mail fraud. Council is also charged with six counts of receiving a bribe; the other defendants, six counts of paying a bribe.
According to the indictment, from approximately August 2011 through September 2012, the defendants allegedly conducted a scheme to bribe a purchasing officer in order to secure UTSA construction contracts. The indictment further alleges that the defendants colluded in the submission of fraudulent, inflated bids to UTSA under the names of sham companies, GNZ Enterprise, LLC and Vista Contracting, and fixed at least 40 UTSA contracts. Authorities estimate the submitted bids totaled more than $200,000. Furthermore, the indictment alleges that Council received cash as well as improvements to his residence for his role in the scheme.
Upon conviction, the defendants face up to five years imprisonment on the conspiracy count, up to ten years imprisonment for each bribery related count and up to 20 years in federal prison for each mail fraud count. All four defendants are on bond pending further court proceedings.
This indictment resulted from an investigation conducted by the agents with the Federal Bureau of Investigation together with the San Antonio Police Department and the University of Texas at San Antonio Police Department. Assistant United States Attorney James Blankinship is 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.
Federal Jury Convicts Del Rio Man in Child Porn CaseRead the Press Release
Law Enforcement testimony revealed that defendant possessed over 1,000 videos and 100 images depicting child pornography
In Del Rio, 39-year-old Ruben A. Vazquez, a teacher at Calderon Elementary in the San Felipe Independent School District, faces a minimum of five years in federal prison after a jury convicted him this afternoon of child pornography charges, announced United States Attorney Robert Pitman and Homeland Security Investigations (HSI) Special Agent in Charge Janice Ayala.
The jury convicted Vazquez of one count of receipt of child pornography, one count of distribution of child pornography and one count of access with the intent to view child pornography. Evidence presented during trial revealed that Vazquez was using peer to peer file sharing programs to access, receive and distribute videos of child pornography. Law enforcement officers testified that Vazquez admitted to them that he had over 1,000 images and over 100 videos of child pornography.
On June 21, 2012, HSI special agents executed a search warrant at the defendant’s residence and seized several computers and related equipment. According to court records, a forensics evaluation of the seized items revealed the presence of child pornography videos that depict minors engaging in sexually explicit conduct along with evidence of child pornography files that had previously resided on the computer.
Vazquez faces between five and 20 years in federal prison on each receipt and distribution count; and, up to ten years in federal prison on the access count. Vazquez remains in federal custody pending sentencing scheduled for January 16, 2014, before United States District Judge Alia Moses.
This case was investigated by HSI agents together with the investigators from the Beaumont Police Department. Assistant United States Attorneys Meghan McCalla and Ralph Paradiso are prosecuting this case on behalf of the Government.
Steven Prewit Pleads Guilty to Federal Firearms Charge in MidlandRead the Press Release
Midland resident and land surveyor Steven Leonard Prewit, age 54, faces up to ten years in federal prison after pleading guilty this afternoon to the possession of unregistered silencers in violation of National Firearms Registration requirements, announced United States Attorney Robert Pitman, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Dallas Field Office Special Agent in Charge Robert Champion and Federal Bureau of Investigation (FBI) Special Agent in Charge Mark Morgan.
Appearing this morning before United States Magistrate Judge David Counts in Midland, Prewit admitted to illegally possessing eight (8) unregistered firearms silencers. According to court records, a search by the ATF and FBI of both his home and a ranch near Balmorhea on May 2, 2013, uncovered the silencers as well as a number of fully automatic machine guns and improvised explosive devices (IEDs). Specifically, Prewit possessed eight (8) firearms silencers, eighteen (18) fully automatic machine guns, one (1) short barreled rifle and four (4) IEDs; all of which were unregistered. All eight of the unregistered firearms silencers did not have serial numbers or manufacturer’s markings as required.
The investigation into Prewit began in March of this year when ATF and FBI agents received information that Prewit was in possession fully automatic machine guns, firearms silencers and IEDs. An FBI undercover employee was on the ranch with Prewit in both March and April of 2013 when he saw Prewit in possession of multiple fully automatic machine guns, silencers and IEDs. Prewit admitted to the FBI undercover employee that none of the weapons, silencers and/or IEDs was registered to him and that he knew they should have been.
Under Title 26, United States Code, Chapter 53, any individual who possesses a machine gun, destructive device, or firearm silencer is required by federal law to register the firearms and/or devices with the Alcohol Tobacco and Firearms (ATF) National Firearms Act Branch (NFA). The applicant must complete and have approved an ATF Form 4: Application for Tax Paid Transfer and Registration of the Firearm and pay a tax. After the application is approved, the firearm may be transferred and the applicant will be entered into the National Firearms Registration and Transfer Record.
In exchange for Prewit’s guilty plea today, the government has agreed to dismiss counts one and two which involved the possession of the machine guns and explosive devices. Prewit will remain on bond pending his sentencing hearing later this fall. Assistant United States Attorney LaTawn Warsaw is prosecuting this case on behalf of the Government.
Final Sentencing Concludes Fraud Prosecutions Related to 2011 Bastrop WildfiresRead the Press Release
Four Defendants Were Convicted Of Submitting False Claims To FEMA
United States Attorney Robert Pitman announced today that on Thursday, August 15, 2013, United States District Judge Sam Sparks sentenced Roy Albert McDougald, Jr., age 46, formerly of Spicewood, Texas, to imprisonment for 12 months and a day for making a false claim for housing benefits to the Federal Emergency Management Agency (“FEMA”) in the wake of the wildfires that erupted in Central Texas around Labor Day 2011. McDougald was the fourth of four defendants to be sentenced in the Austin Division of the Western District of Texas for similar crimes related to the wildfires.
The fires began on August 30, 2011, and destroyed more than a thousand homes as they continued into September. President Obama declared a major disaster on September 9, 2011. FEMA personnel began arriving in Central Texas to provide disaster relief while the wildfires were still burning, and they eventually processed thousands of applications for individual benefits. Among other forms of monetary relief, benefits up to a maximum of $30,200 were available to owners of homes that had been damaged or destroyed.
On December 4, 2012, a federal grand jury in Austin, Texas indicted three defendants on charges of filing a fraudulent claim for federal disaster relief, in violation of 18 U.S.C. § 1014. The Defendants were McDougald; Manuel Hernandez, age 53, of Smithville, Texas; and Ginger Roe, age 65, of Temple, Texas. On February 19, 2013, the federal grand jury indicted Andre Oliver, age 48, of Paige, Texas, on similar charges.
Each indictment alleged that the defendant had made a claim to FEMA for housing benefits, asserting that the wildfires had destroyed a trailer home that he or she owned and lived in as his or her primary residence. Each of the indictments alleged that the defendant’s claim was false and fraudulent, either because the trailer home was not the defendant’s primary residence or because the defendant did not own the trailer home. Hernandez, Roe, and Oliver each received $30,200 from FEMA based on their applications, and McDougald received $20,420.
Each of the four defendants eventually entered into a plea bargain with the United States Attorney’s Office, under which the defendants pleaded guilty to making a false claim to the United States, in violation of 18 U.S.C. § 287. McDougald was the last of the defendants to be sentenced, and the other three received sentences as follows:
• On May 10, 2013, Judge Sparks sentenced Hernandez to a five-year term of probation and a $3,000 fine.
• On June 24, 2013, Judge Sparks sentenced Oliver to imprisonment for 12 months and a day, followed by a 3-year term of supervised release.
• On July 25, 2013, United States District Judge Lee Yeakel sentenced Roe to a five-year term of probation.Each of the four of the defendants was also ordered to repay to FEMA the money they received as a result of their false claim ($30,200 each for Hernandez, Olive and Roe, and $20,420 for McDougald).
These cases were investigated by the Office of Inspector General of the United States Department of Homeland Security.
San Antonio Self Proclaimed Modeling Promoter Convicted of Child Pornography Receives 898-Year Federal Prison TermRead the Press Release
In San Antonio this afternoon, Chief U.S. District Judge Fred Biery sentenced 36-year-old Gemase Lee Simmons of San Antonio to 10,776 months, or 898 years, in federal prison after convicting him in February of 39 counts of various bank fraud and child pornography related offenses announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent in Charge Armando Fernandez.
In addition, Judge Biery ordered that Simmons pay $52,788.12 in restitution and a special assessment of $3,900. Simmons has been in federal custody since his arrest in January 2012.
“This man abused and exploited his victims in unspeakable ways. This sentence will ensure that he will not pose a risk to the public again,” stated United States Attorney Robert Pitman.
On February 11, 2013, following a six-day bench trial, Judge Biery convicted Simmons of six counts of bank fraud, four counts of extortion and 29 counts of sexual exploitation of a child including production, distribution, transportation, receipt and possession of child pornography.
Testimony and evidence introduced during trial established that between May 2011and January 2012, Simmons and others at his direction knowingly engaged in an approximate $70,000 check kiting scheme using local bank accounts. Simmons directed other individuals to withdraw cash from bank accounts he and others established using checks drawn on other bank accounts which Simmons knew either had insufficient funds or were closed.
Testimony also revealed that Simmons and others used those proceeds to implement and further a child exploitation scheme. Acting as himself and by assuming fake personas, Simmons recruited, enticed and coerced over 100 minors and adults, male and female, to engage in sexually explicit conduct and recorded the activity under the pretenses of helping them establish a modeling career. Testimony also revealed that Simmons oftentimes transmitted the images and videos of sexually explicit conduct to his female victims as a means to control them. Simmons then threatened to release the sexually explicit material publicly if the victims did not comply with his requests for additional images and sexual activity.
The case was investigated by the Federal Bureau of Investigation. Assistant United States Attorneys Tracy Thompson and Bettina Richardson prosecuted this case on behalf of the Government.
Somalian Sentenced to Federal Prison for Making False Statements During A Terrorism InvestigationRead the Press Release
In San Antonio this morning, 29-year-old Abdullahi Omar Fidse, a citizen of Somalia, was sentenced to eight years in federal prison after admitting to making false statements under penalty of perjury during a terrorism investigation announced United States Attorney Robert Pitman, Federal Bureau of Investigation Special Agent In Charge Armando Fernandez, San Antonio Division and Acting Special Agent in Charge Vincent Iglio, Homeland Security Investigations (HSI) in San Antonio.
“This prosecution demonstrates the vigilance of the federal government in detecting and disabling individuals who seek to enter the country illegally with the purpose of doing harm. We will continue to be aggressive in protecting our borders and seeking severe punishment for those who violate our laws,” stated U.S. Attorney Robert Pitman.
According to court records, on June 24, 2008, Fidse and 25-year-old Deka Abdalla Sheikh, who was serving as Fidse’s English interpreter, arrived at the Hidalgo, TX, Port of Entry without any identification and claimed asylum based upon Fidse’s father being murdered by “al-Qaida” in the father’s store in Mogadishu, Somalia, while in the presence of Fidse. Fidse was placed in an Immigration Detention Facility located in Pearsall, Texas, while his asylum claim was investigated.
Recorded conversations between Fidse and Sheikh during Fidse’s detention revealed that prior to arriving in Hidalgo, the defendants admittedly planned to provide false testimony to authorities about how they first met, that they were married and that they had lived together for three years. Furthermore, they discussed hand signals to be used to communicate during hearings in an effort to ensure that their individual testimony would match.
Fidse’s stories changed over the course of his detention, including who was responsible for his father’s death. Fidse initially told Customs and Border Protection officers that al-Qaida killed his father while they lived in Somalia. He subsequently told an Immigration Court judge that the Islamic Courts were responsible for his father’s death. In truth, his father had died of natural causes years before and Fidse actually had lived in Kenya since he was in grade school. Because of Fidse’s credibility and his inability to get his story straight on who killed his father, on March 31, 2009, the Immigration Court denied Fidse’s asylum request. He remained in the detention facility since he is a Somali national and travel documents could not be obtained from that country.
The previously mentioned recordings also revealed discussions Fidse had with an undercover source in which Fidse professed his support for violent, radical Jihad; the killing of non-Muslims; and, his adoration for Osama Bin Laden. While still in custody, Fidse also made recorded comments that he purchased an armed vehicle and weapons to be used by terrorists. Fidse told an undercover source how he bought a vehicle and armed it for an al-Shabaab squad and that the vehicle was ultimately destroyed while fighting the Ethiopian defense forces supporting the Somalia Transitional Government. Fidse also told the undercover source that, “We are terrorists.”
Fidse initially denied making the recorded statements when interviewed by federal investigators and furthermore, refused to provide them with more specifics about the armed vehicle. However, on December 5, 2012, Fidse pleaded guilty to one count of conspiracy to obstruct an immigration proceeding and one count of conspiracy to make a false statement during a terrorism investigation. Today, Fidse received four years imprisonment for each count to run consecutively. On September 20, 2012, Sheikh pleaded guilty to one count of conspiracy to make a false statement in a terrorism investigation. By pleading guilty, Sheikh admitted that she and Fidse conspired to provide false information to authorities to gain entrance into the United States as well as provide false information to authorities concerning support for terrorist organizations. Yesterday, Judge Biery sentenced her to five years probation.
“This case demonstrates the Joint Terrorism Task Force's commitment to protecting the U.S. from individuals who seek to do us harm by gaining entry to the U.S. through deception, manipulation and violation of the law,” stated FBI Special Agent in Charge Armando Fernandez.
“Homeland Security Investigations’ (HSI) unique law enforcement authorities provide the tools essential to investigating a wide variety of criminal violations and immigration offenses. These authorities proved to be a critical advantage in building a case against Abdullahi Omar Fidse,” said HSI Acting Special Agent in Charge Vincent Iglio. “HSI will continue to use it’s vast investigative enforcement authorities to help prosecute those who threaten our national security or provide support to those who intend to do harm against our citizens.”
This case was investigated by agents with the Joint Terrorism Task Force, Federal Bureau of Investigation (FBI), Homeland Security Investigations (HSI), U.S. Border Patrol, and the Department of Homeland Security Citizenship and Immigration Services (CIS) and Detention and Removal Operations (DRO). Assistant United States Attorney Mark Roomberg prosecuted this case on behalf of the government.
California Man Pleads Guilty to Interference with A Flight CrewRead the Press Release
Bryan Ray Allen, 32, of San Juan Capistrano, California, faces an agreed sentence of forty-eight (48) months in federal prison after admitting to interference with a flight crew, United States Attorney Robert Pitman, FBI Special Agent in Charge Mark Morgan, El Paso Division, and Midland Police Chief Price Robinson announced today.
Appearing in United States District Court before Judge Robert Junell in Midland this afternoon, Allen pleaded guilty to one count of interference with a flight crew. According to the factual basis filed in the case, on May 23, 2013, Allen boarded Southwest Airlines flight 863 in Los Angeles, California, with a final destination of Dallas, Texas. The flight had stops in Las Vegas, Nevada, and Midland, Texas. Allen admitted that in the twenty-four hours before the flight he smoked methamphetamine twice and drank whiskey at the airport. On the flight from Las Vegas to Midland, Allen began hallucinating. He believed the pilots of the plane were evil and that it was a “plane ride to hell”. Allen felt he needed to either get off the plane or get into the cockpit to stop the pilots. As the plane began its descent into Midland, after all the passengers were instructed to remain seated, Allen approached the cockpit door, ignoring flight crew instructions to return to his seat and attempted multiple times to enter the cockpit. Once the plane landed, Allen pushed a flight attendant out of the way of the cabin door and ran up the jet way ramp into the airport where he was met by Midland Police Department officers who had to physically subdue him.
Allen has been and will remain in the custody of the United States Marshals pending a sentencing hearing on October 10, 2013, before United States District Judge Robert A. Junell in Midland.
This case was investigated by the Federal Bureau of Investigation with assistance from the Midland Police Department. Assistant United States Attorney V. LaTawn Warsaw is prosecuting this case on behalf of the Government.