Western District of Texas

Scheme resulted in an estimated $10.6 million loss to over 150 investors

In Austin this morning, 43-year-old Christopher Brown Cornett of Buda, TX, and 49–year-old Heidi Beryl Beyer of Scottsdale, AZ, were sentenced to 40 years and six years in federal prison, respectively, for carrying out a Ponzi scheme which victimized more than 150 individuals and resulted in a total estimated loss to investors of over $10.6 million announced United States Attorney Robert Pitman, Federal Bureau of Investigation Special Agent in Charge Armando Fernandez and Internal Revenue Service-Criminal Investigation Special Agent in Charge Steve McCollough.

In addition to the prison terms, United States District Judge Sam Sparks ordered that the defendants jointly and severally pay restitution in the amount of $9,525,031.77.  Judge Sparks ordered Cornett to pay an additional $795,701.62 restitution.  Furthermore, Judge Sparks ordered that both defendants be placed under supervised release for a period of three years after completing their prison terms.  

“Mr. Cornett and Ms. Beyer defrauded investors out of millions of dollars, and the sentences handed down today exemplify the consequences criminals face for such crimes.  Investment schemes cause serious damage to victims, both financially and emotionally, and therefore demand serious punishments.  My office is committed to bringing white collar criminals to justice, and today’s sentences are evidence of that commitment,” stated United States Attorney Robert Pitman.

In October 2012, Cornett pleaded guilty to one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering; Beyer pleaded guilty to one count of wire fraud.  By pleading guilty, Cornett admitted that from April 2008 to October 2011, he devised a scheme to obtain money from investors under false pretenses.  Beyer joined in the scheme in September 2009.  According to court records, the defendants represented to investors that their money would be placed into a common pool of funds that would be invested in foreign currency exchange trades, and that investors would receive the profits of the trades, less a fixed share of the profits for the defendants (usually between 25 to 30% of the profits).  These representations were made both orally and in writing, in the form of emails and, eventually, in the form of a Subscription Agreement each investor had to sign.  

Information which the defendants failed to disclose to investors included the fact that: Cornett had previously been fired from Morgan Stanley for failure to follow company rules; Cornett was terminated from Brookstreet Securities in 2002 because he had violated securities regulations; on January 8, 2003, the National Association of Securities Dealers (“NASD”) barred Cornett from associating with any member of the NASD in any capacity based on Cornett’s theft of approximately $28,000 of an investor’s money; Cornett was not properly registered as required by the Commodities Exchange Act and CFTC regulations; as well as Cornett’s previous federal conviction in 2003 for five counts of federal bank fraud and the fact that he served two years in federal prison as a result of that prior conviction.

According to court records, the defendants solicited from pool participants a total of approximately $14.6 million during their scheme.  The defendants lost approximately $7.3 million of the pool’s funds in foreign currency exchange trading.  They used the remaining pool funds for personal enrichment or to make payments to other investors so as to lull those investors into the mistaken belief that their investment was profitable and sound.  Court records reflect that Cornett used pool funds to cover gambling losses in Las Vegas which exceeded $600,000 and to purchase a new Chevrolet Corvette.

“This type of scheme threatens our economy and undermines the trust in our financial system,” stated Internal Revenue Service-Criminal Investigation Special Agent in Charge Steve McCollough.  “IRS-Criminal Investigation wants to make sure that criminals face the consequences of their actions just as these defendants did.”

“The FBI, IRS-CI and the Western District of Texas United States Attorney's Office recognize the importance of protecting Americans from criminals who steal from victims without violence but through broken promises and deceit. Americans now, more than ever in tough economic times, count on law enforcement to protect them from white collar criminals and to send messages to future fraudsters that these law enforcement agencies will actively pursue them to ensure crime does not pay,” stated Federal Bureau of Investigation Special Agent in Charge Armando Fernandez.

This investigation was conducted by the Internal Revenue Service-Criminal Investigation and the Federal Bureau of Investigation.  Assistant United States Attorney Chris Peele prosecuted this case on behalf of the Government.

Jose Pardo, age 68, of Austin and Jorge Carrillo, age 45, of Lockhart, TX, both face between ten years and life in federal prison after a jury convicted them yesterday afternoon for their roles in a heroin distribution operation announced United States Attorney Robert Pitman. 

The jury convicted Pardo and Carrillo of one count of conspiracy to possess with intent to distribute and to distribute heroin.  Evidence presented at trial revealed the defendants conspired from May 2011 until their arrests in June of 2012 to distribute more than 17 kilograms of heroin.  Testimony also revealed that at least on one occasion, heroin was processed after business hours at the Pardo family-owned restaurant, Jovita’s, and that numerous drug transactions occurred right behind Jovita’s in co-defendant Amado Pardo’s house. 

Jose Pardo and Jorge Carrillo, along with 12 co-defendants who entered guilty pleas prior to trial, are scheduled to be sentenced at 9:00 a.m. on May 3, 2013, before United States District Judge Sam Sparks in Austin.  The alleged ringleader, Amado Pardo, passed away prior to trial. 

This case was investigated by the Federal Bureau of Investigation, Austin Police Department, Texas Department of Public Safety, Texas Department of Criminal Justice Office of the Inspector General, Drug Enforcement Administration and the Travis County Sheriff’s Office.  This matter is being prosecuted by Assistant United States Attorneys Dan Guess and Elizabeth Cottingham.

Defendants attempt to evade law enforcement resulted in three deaths

In San Antonio this morning, federal authorities filed a criminal complaint charging 31-year-old Javier Silva-Morales, a resident of Monterrey, Mexico, and 25–year-old Jose Abram Lopez-Lozano, a resident of Michoacàn, Mexico, with illegally transporting undocumented aliens announced United States Attorney Robert Pitman and Homeland Security Investigations (HSI) Acting Deputy Special Agent in Charge Monica Mapel.

According to the complaint, the driver, Silva-Morales and his accomplice, Lopez-Lozano, were attempting to transport undocumented aliens yesterday 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 12 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 twelve 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. 

Upon conviction, the defendants face up to life in federal prison.  Both remain in federal custody at this time.

This criminal complaint resulted from an investigation by HSI, the Texas Department of Public Safety and the Wilson County Sheriff’s Office.  Special Assistant United States Attorney Christina Playton 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.

Defendant was in possession of 5,342 videos and 133,345 images depicting child pornography

In El Paso this morning, 46-year-old Jose Miranda, a former mechanic with the El Paso Independent School District, was sentenced to six years in federal prison followed by a lifetime of supervised release for receipt and possession of material involving the sexual exploitation of children, announced United States Attorney Robert Pitman and Homeland Security Investigations Acting Special Agent in Charge Dennis Ulrich.

In addition to the prison term, Miranda is subject to an undetermined amount of restitution payable to the victims portrayed in the videos.  U.S. District Judge Frank Montalvo is expected to rule on the restitution matter in approximately 30 days.

On May 31, 2012, Homeland Security Investigations (HSI) Cyber Crimes Group 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 5,342 videos and 133,345 images of minors engaging in sexually explicit conduct. 

On October 22, 2012, Miranda pleaded guilty to one count of receipt of material involving the sexual exploitation of children and one count of possession of such material.

Assistant United States Attorney J. Brandy Gardes prosecuted this case on behalf of the Government.

In Austin this afternoon, Hussein Ali “Mike” Yassine, age 40, pleaded guilty to engaging in a tax fraud scheme using his Austin nightclubs.

Appearing before United States District Judge Sam Sparks, 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.  As a result of his guilty plea, Yassine faces up to three years in federal prison and a maximum $250,000 fine.  Sentencing has yet to be scheduled.

Yassine is currently in federal custody.  Last month, 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 are prosecuting this case on behalf of the Government.

In Midland today, a federal grand jury returned an indictment charging 38-year-old former Odessa Police officer Jackie Lynn Thompson and five other Odessa, Texas, residents in connection with a methamphetamine distribution conspiracy announced United States Attorney Robert Pitman, Drug Enforcement Administration Special Agent in Charge Joseph D. Arabit, El Paso Division, Federal Bureau of Investigation Special Agent in Charge Mark Morgan, El Paso Division and Midland Police Chief Price Robinson.

The indictment charges Thompson, as well as 36–year-old Jesse Ubaldo Rodriguez, 24-year-old Isai Ramirez,  45-year-old Jaime Yrvegas Castillo, 26-year-old Douglas James Lewis and 48–year-old Ernest Lee McCarty, with one count of conspiracy to possess with intent to distribute methamphetamine.  Upon conviction, each defendant faces a mandatory ten years up to life in federal prison.

The indictment alleges that from January 2012 until January 2013, the six defendants conspired to distribute more than 500 grams of methamphetamine.  All of the defendants are in federal custody.

This indictment resulted from an investigation by the Drug Enforcement Administration, the Midland Police Department, the Federal Bureau of Investigation, Homeland Security Investigations (HSI), and Texas Department of Public Safety in Midland.  Assistant United States Attorney Brandi Young 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.

Erik Alan Garza, age 25, of Eagle Pass, TX, appeared in federal court this morning in San Antonio following his extradition late Friday from Mexico based on federal smuggling charges filed in the Western District of Texas announced United States Attorney Robert Pitman and Homeland Security Investigations (HSI) Acting Deputy Special Agent in Charge Monica Mapel, San Antonio Division.

Garza is charged by federal grand jury indictment returned in Del Rio in June 2012 with six counts of aiding and abetting the smuggling of goods from the United States.  According to the indictment, on various occasions between June 19, 2010, and February 17, 2012, Garza and an accomplice, 32-year-old Eagle Pass resident Rolando Tamayo, illegally attempted to smuggle defense articles into the Republic of Mexico from the United States.  Those items included night vision monocular goggles, a thermal goggle, 400 sets of AR-15 front and rear flip-up tactical sights, approximately 5,000 high-capacity assault rifle magazines and approximately 6,000 rounds of ammunition, including 100 rounds of .50 caliber ammunition.

The indictment also charges Tamayo, who remains a fugitive, with two counts of aiding and abetting the smuggling of goods from the United States. 

Each charge calls for a maximum sentence of ten years in federal prison upon conviction.

“Gun and drug trafficking fuels violence by criminal organizations and threatens the security of the people along our borders and throughout the country,” said Monica Mapel, acting deputy special agent in charge of HSI in San Antonio.  “HSI special agents will continue working jointly with our law enforcement partners to utilize our expertise in import and export enforcement in order to keep our citizens safe and secure.”

This case was investigated by agents with Homeland Security Investigations (HSI) and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).  The Department of Justice Office of International Affairs as well as the United States Marshals Service assisted in Garza’s extradition.  Assistant United States Attorney Michael Galdo 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.

Frank Gonzales Carrasco, age 45 and former Warehouse Operations Buyer for Midland Independent School District (MISD), faces up to ten years in federal prison after admitting to stealing construction materials from the school district announced United States Attorney Robert Pitman.

Appearing before U.S. Magistrate Judge David Counts in Midland this morning, Carrasco pleaded guilty to one count of theft concerning programs receiving federal funds. According to the factual basis filed in this case, between July 2009 and January 2012, Carrasco was employed by MISD as the Operations Buyer at the warehouse.  His job responsibilities included ordering and managing the inventory necessary to complete work at MISD facilities.  By pleading guilty, Carrasco admitted that during his employment, he ordered large amounts of copper pipe and electrical wire on behalf of MISD which exceeded any work orders anticipated by the school district.  Carrasco then took the extra copper pipe and electrical wire—more than 18,000 pounds--to Recycle Midland where he recycled it for cash.  Carrasco admittedly collected $46,041.71 from Recycle Midland for copper pipe and electrical wire that originally cost MISD more than $140,000.  To conceal his scheme, Carrasco hid the theft of the materials by adding pipe or wire to work orders for jobs that did not require it or had already been completed.

In addition to the prison time, Carrasco faces up to a $250,000 fine as well as restitution to MISD.  Carrasco is on a $10,000 bond pending sentencing.  A sentencing date has yet to be scheduled.

This case was investigated by the Midland Police Department with assistance from Midland Independent School District internal auditors.  Assistant United States Attorney V. LaTawn Warsaw is prosecuting this case on behalf of the Government.

Federal authorities arrested 12 former Ector County Correctional Center (ECCC) guards and one former ECCC employee this morning for allegedly accepting bribes in exchange for smuggling contraband to inmates inside the federal detention facility announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent in Charge Mark Morgan, El Paso Division.

The defendants are individually named in 13 federal grand jury indictments returned on January 23, 2013, and unsealed today.  The indictments allege that during 2011 and 2012, the correctional officers, as well as Barbara Garrett, a food service worker, smuggled in contraband to inmates, including cell phones and chargers as well as tobacco and marijuana, in exchange for cash in knowing violation of their official duties.  Those indicted and arrested include:

Jovanna Marie Olivarez, age 21, of Odessa; Matthew Ryan Williams, age 20, of Odessa; Dennis Earl Newsome, age 63, of Austin, TX; Charlette Smith, age 46, of Odessa; Nancy Torres Morales, age 36, of Odessa; Valerie Ann Arenivas, age 22, of Odessa; Gabriel Angel Navarette, age 23, of Odessa; Jennifer Armida Lopez, age 25, of Odessa; Jessica Lucia Smith, age 33, of Monahans, TX; Jazmine Desiree Cruz, age 19, of Odessa; Jonathon Wayne Meza, age 29, of Odessa; Barbara Jean Garrett, age 52, of Andrews, TX; and, Ashley Dawn Clark, age 29, of Crane, TX.

Each defendant is charged with one count of accepting a bribe.  Upon conviction, each defendant faces up to 15 years in federal prison and a maximum $250,000 fine.

This case was investigated by agents with Federal Bureau of Investigation together with investigators from the  Odessa Police Department and the Ector County Sheriff’s Office along with cooperation from the United States Marshals Service and ECCC.  Assistant United States Attorney John Klassen 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.

United States Attorney Robert Pitman announced that 27-year-old Francisco Jose Cantu, of Andrews, TX, faces five to twenty years in federal prison after pleading guilty to receipt of materials relating to the sexual exploitation of children.

Appearing before United States Magistrate Judge David Counts yesterday, Cantu admitted that in October 2012, he received images of child pornography via the Internet.  According to the factual basis filed in this case, Cantu also admitted to distributing images of child pornography via the Internet.  On November 29, 2012, Homeland Security Investigations (HSI) agents executed a search warrant at Cantu’s residence and seized several computer devices.  A forensics examination of the seized items revealed the presence of more than 600 images of minors engaged in sexually explicit conduct.

Sentencing before United States District Judge Robert A. Junell in Midland has not yet been scheduled.

This case was investigated by Homeland Security Investigations agents. Assistant United States Attorney Austin Berry is prosecuting this case on behalf of the Government.

In Austin this morning, brothers Hussein Ali “Mike” Yassine, age 40, and Hadi Ali Yassine, age 36, were sentenced to 151 months and 60 months in federal prison, respectively, for their roles in a money laundering scheme.

In addition to the prison terms, U.S. District Judge Sam Sparks ordered that Mike Yassine pay a $60,000 fine; Hadi Yassine, a $30,000 fine.  Judge Sparks also ordered that both defendants be placed under supervised release for a period of three years after completing their prison terms.

On October 12, 2012, following a seven-day trial, a jury convicted Mike and Hadi Yassine of one count of conspiracy to commit money laundering.  The jury also convicted Mike and Hadi Yassine of three counts and two counts of money laundering, respectively.  The jury found that in 2008 and 2009, Mike and Hadi Yassine used several business establishments, including nightclubs, located in downtown Austin to launder over $200,000 in cash, which they 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 Attorney Gregg N. Sofer is prosecuting this case on behalf of the Government.

United States Attorney Robert Pitman and FBI Special Agent in Charge Mark Morgan announced that in El Paso this morning, 47-year-old Joe Tapia, III, of El Paso, was sentenced to the statutory maximum of 30 years in federal prison followed by a lifetime of supervised release after pleading guilty in October to solicitation of material relating to the sexual exploitation of children.

By pleading guilty, the former Excel Learning Center (ELC) admissions service representative and local church youth minister admitted that he had sexually explicit instant messenger chats with multiple minors on both his work and home computers.  Furthermore, Tapia admitted that he recorded video and still images of two children while they were changing clothes prior to a church performance and used those recordings to solicit other sexually explicit images of children. 

Tapia has remained in custody since his arrest by special agents with the Federal Bureau of Investigation in May 2012.

This case was investigated by the Federal Bureau of Investigation together with the El Paso Police Department.  Assistant United States Attorney J. Brandy Gardes prosecuted this case on behalf of the Government.

In Austin, federal authorities announced the indictment and arrest this morning of 56–year-old Russell Allen Erxleben for allegedly running a Ponzi scheme that generated more than $2 million.

An eight–count federal grand jury indictment, returned on Tuesday and unsealed today, charges the Dripping Springs, Texas, resident with five counts of wire fraud, one count of securities fraud, and two counts of money laundering.  According to the indictment, from 2005 until October 2009, Erxleben devised and implemented a scheme to defraud and to obtain money from investors by the use of fraudulent pretenses, representations and promises.  The indictment alleges that Erxleben used several companies, including WALTEC Consultants, LRE Holdings, and The MDM Group, to promote investments in fraudulent ventures, namely, in post-WWI German government gold bearer bonds and in a work of art purportedly by Paul Gauguin, a famous late 19th-early 20th century artist.  The indictment further alleges that Erxleben used investment proceeds for the benefit of himself and his family, and to pay dividends to previous investors.  In furtherance of the fraudulent scheme, the indictment also alleges that Erxleben made various wire transfers using numerous financial accounts which were opened and maintained by others, including one or more family members, in an effort to avoid detection by authorities.  According to the indictment, Erxleben also failed to disclose to investors his 1999 federal felony criminal convictions for securities fraud and conspiracy to commit securities fraud, as well as the fact that he owed approximately $28 million in restitution stemming from those convictions.

Upon conviction, Erxleben faces up to 20 years in federal prison for each of the wire fraud and securities fraud counts, and up to 10 years in federal prison per money laundering count.  Erxleben remains in federal custody pending the outcome of a detention hearing next week.

This indictment resulted from an investigation by the Internal Revenue Service-Criminal Investigation together with the Texas State Securities Board along with assistance from Homeland Security Investigations (HSI).  Assistant United States Attorneys Matthew Devlin and Alan Buie are prosecuting this case on behalf of the Government. 

An indictment is merely a charge and should not be considered as evidence of guilt.  The defendant is presumed innocent until proven guilty in a court of law.

In Del Rio this morning, a federal grand jury indicted Maverick County Precinct Two Commissioner Rodolfo Bainet Heredia, age 54, of Eagle Pass, Texas, 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.

The federal grand jury indictment charges Heredia with six counts of receiving a bribe and one count of paying a bribe to an agent of an organization receiving federal funds.  The indictment alleges that in 2010 and 2011, Heredia manipulated the bidding process to guarantee that contractors he chose would be awarded Maverick County construction contracts. Those contractors deposited the checks issued to them by Maverick County and then made cash payments to Heredia.  According to the indictment, the private contractors submitted inflated bids to Maverick County in order to ensure the availability of sufficient funds to perform the construction work, make a profit, and also to pay the bribe to Heredia.  The indictment further alleges that Heredia gave benefits to a county employee to guarantee that checks were issued to the contractors involved in this scheme.

Upon conviction, Heredia faces up to ten years in federal prison on each count.  Heredia remains in custody following his arrest in October of last year on federal money laundering and bulk cash smuggling charges.  A trial on those charges is scheduled for April 16, 2013.  No court dates have been scheduled in connection with today’s indictment.

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. 

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.

In Midland, 59–year-old Odessa physician Barrett Doyle Whitefield, faces a mandatory minimum ten-year federal prison term after pleading guilty this morning to conspiring to possess with intent to distribute and distribute controlled substances, announced United States Attorney Robert Pitman and Drug Enforcement Administration Special Agent in Charge Joseph M. Arabit. 

By pleading guilty, Whitefield admitted that from late 2011, to July 19, 2012, when Drug Enforcement Administration agents and Midland Police Department Narcotics Detectives executed a search warrant at his medical office in Odessa, he wrote prescriptions for hydrocodone to numerous individuals upon request, without examining them, and on some occasions for individuals whom he never saw as patients.  Whitefield further admitted that he was aware his co-defendants were selling the hydrocodone pills to other individuals in the Midland/Odessa area.  Additionally, Whitefield admitted that he delivered a package of methamphetamine to an individual in Lamesa, TX, at the direction of his co-defendants.

Also this morning, Whitefield’s codefendants, Christina Rene Barfield, Megan Lynn Maner, and Cynthia Marie Constanzo, pleaded guilty to the conspiracy charge.  By pleading guilty, Barfield admitted to directing co-defendants to sell hydrocodone and methamphetamine; Maner and Constanzo, to distributing hydrocodone and methamphetamine.  Yesterday, co-defendant Cody Wayne Hearn entered a guilty plea to the conspiracy charge and admitted that he filled fraudulent hydrocodone and Xanax prescriptions written by Whitefield and distributed methamphetamine at the direction of Barfield.  After pleading guilty, Barfield, Maner, Constanzo and Hearn each face a mandatory minimum of ten years in federal prison.  No sentencing dates have been scheduled.

Jury selection for the three remaining co-defendants, Robert Michael Handlon, Matthew Christian Woodside, and Amanda Leigh Glenn, is scheduled for 8:30am on February 11, 2013.  All face the same conspiracy to possess with intent to distribute and distribute controlled substances charge.

The case was investigated by the Drug Enforcement Administration and the Midland Police Department. Assistant United States Attorney Brandi Young is prosecuting the case on behalf of the Government.

In Eagle Pass, Texas this morning, Maverick County Precinct Four Commissioner Cesar Flores, age 46 of Eagle Pass, Texas, was arrested by the Federal Bureau of Investigation (FBI) after a federal grand jury in Del Rio indicted him this week 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.

The federal grand jury indictment, returned yesterday and unsealed this morning, charges Flores with five counts of receiving bribes.  The indictment alleges that in 2010 and 2011, Flores manipulated the bidding process to guarantee that contractors he chose would be awarded Maverick County construction contracts. Those contractors deposited the checks issued to them by Maverick County and then made cash payments to Flores.  According to the indictment, the private contractors submitted inflated bids to Maverick County in order for there to be sufficient funds to perform the construction work, make a profit, and pay the bribe to Flores. 

Upon conviction, Flores faces up to ten years in federal prison for each bribery charge.  Flores appeared before Magistrate Judge Victor Roberto Garcia this morning in Del Rio for his Initial Appearance.  Bond for Flores was set at $40,000.

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. 

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.

In San Antonio this morning, United States District Judge sentenced 31-year-old Edward Sandoval to 41 months in federal prison followed by three years of supervised release for purchasing approximately 40,000 rounds of ammunition to be smuggled into the Republic of Mexico, announced United States Attorney Robert Pitman and Homeland Security Investigations Acting Deputy Special Agent in Charge Monica Mapel.

On September 6, 2012, the San Antonio resident pleaded guilty to one count of aiding and abetting the smuggling of goods from the United States.  According to the factual basis filed in this case, in January and February 2011, Sandoval admittedly purchased a total of approximately 40,000 rounds of multiple caliber ammunition, including 7.62 caliber and .223 caliber, from a San Antonio gun shop for a friend who informed Sandoval that the ammunition was destined for Mexico via Eagle Pass, Texas.  Sandoval further admitted that he was paid $1,500 each time he purchased ammunition for others.  In February 2011, authorities in Eagle Pass seized approximately 15,000 rounds of ammunition purchased by Sandoval prior to it being smuggled into Mexico.

This case was investigated by agents with Homeland Security Investigations and the Bureau of Alcohol, Tobacco, Firearms and Explosives.  Assistant United States Attorney Mark Roomberg prosecuted this case on behalf of the Government.

Today in Midland, 41-year-old Darlene Aurelia Bishop pleaded guilty to her role in a scheme in which she defrauded various individuals out of $5,854,701 over a six-month period, announced United States Attorney Robert Pitman. 

Appearing this morning before United States Magistrate Judge David Counts, Bishop pleaded guilty to one count of conspiracy to commit wire fraud.  According to the factual basis filed in this case, Bishop was the owner of several businesses in Odessa, including Ameritex Brokers, Paradize Funding, DarLin Enterprises, and JonDar Enterprises.  Through these businesses, Bishop offered various “credit enhancement opportunities” through the use of Proof of Funds (POFs) letters. Beginning in July 2008 and continuing through March 2009, Bishop worked with several individuals affiliated with an entity known as Apogee Financial to obtain and utilize documents that appeared to be from a bank.  Specifically, Bishop advertised the service of providing “leased funds” bank accounts, in which a client could “rent/lease” a bank account that was allegedly established in a client’s name, and then funded by an investor in any amount the client requested and paid for as part of the lease of funds.  Bishop’s entire POF business model centered on the ability of clients to be able to use the POFs she sold them to gain entrance into a “private placement trading platform” that was exclusive to only those individuals who could demonstrate a high net worth.  The POF was the tool designed to demonstrate, falsely, that high net worth.

By pleading guilty, Bishop admitted that she knew the POFs contained false information and that her clients had zero authority to withdraw any money from any such account or to borrow against the funds in the account.  Furthermore, Bishop admitted that the POFs were being used to defraud other people and that she facilitated that further fraud.  Bishop also admitted to using the money she received in this scheme to make several large purchases, including several vehicles and a $672,000 residence in Odessa.  As part of the plea agreement, Bishop agreed to forfeit all of the cars and the money obtained from the sale of the residence.

Sentencing is scheduled for 8:30am on March 27, 2013, before United States District Judge Robert A. Junell.  Bishop faces up to 20 years in federal prison for the wire fraud violation.

This investigation was conducted by the United States Secret Service.  Assistant United States Attorney Austin M. Berry is prosecuting this case on behalf of the United States.

This morning in Midland, a federal jury convicted 47-year-old Paul David Copeland, Jr., of Odessa, of various methamphetamine trafficking offenses, announced United States Attorney Robert Pitman.

After a two-day trial, Copeland was found guilty of multiple counts of possessing pseudoephedrine with intent to manufacture methamphetamine, conspiracy to manufacture methamphetamine, and attempting to manufacture methamphetamine.  Testimony and evidence introduced at trial established that on 145 occasions between the Fall of 2006 and August 2011, Copeland purchased over-the-counter cold medicine containing pseudoephedrine, a key ingredient in manufacturing methamphetamine, from Odessa pharmacies such as Walgreen’s, Walmart, Target, Albertson’s, and HEB.  Testimony further established that Copeland recruited at least three other individuals to purchase the same type of cold medicine on his behalf.   The jury also received evidence that in May 2007, the Ector County Sheriff’s Office found an active meth lab in Copeland’s travel trailer and pick-up in Odessa.

As to each count of conviction, Copeland faces up to twenty years in federal prison, a $1 million fine, and a minimum three year term of supervised release following his release from custody.  His sentencing date is March 14, 2013.  Copeland has been in federal custody since his arrest in April 2012.

The case was investigated by the Texas Department of Public Safety and the Ector County Sheriff’s Office, with assistance from the Drug Enforcement Administration.  Assistant United States Attorney John Klassen prosecuted the case on behalf of the Government.

In federal court in El Paso this morning, 66-year-old British businessman Christopher Tappin of Orpington, Kent, was sentenced to 33 months in federal prison for attempting to export to Iran a special component of the Hawk Air Defense Missile announced United States Attorney Robert Pitman and Acting Homeland Security Investigations (HSI) Special Agent in Charge Dennis Ulrich, El Paso.

In addition to the prison term, U.S. District Judge David Briones ordered that Tappin pay an $11,357.14 fine and be placed under supervised release for a period of three years after completing his prison term.

“In this case, Mr. Tappin admitted his role in trying to facilitate the shipment of specialized batteries to Iran. These batteries are used to make Hark missiles operational, and Mr. Tappin admitted that he submitted false shipping documentation to circumvent U.S. export control regulations. Those who violate federal law for monetary gain, and in the process put the national security of the United States and its allies at risk, will face prosecution and punishment for their callous disregard for the public’s safety,” said United States Attorney Robert Pitman.

On November 1, 2012, Tappin appeared in federal court, reversed his original not-guilty plea and admitted culpability in the scheme. Tappin pleaded guilty to one count of aiding and abetting the illegal export of defense articles and by doing so, waived his right to appeal his conviction or challenge the sentence handed down in this case.

By pleading guilty, Tappin admitted that from December 2005 to January 2007, he knowingly aided and abetted others, including his Cyprus-based business associate Robert Frederick Gibson and Portland, OR, resident Robert Caldwell in an illegal attempt to export Zinc/Silver Oxide Reserve Batteries to Iran. These particular batteries, a special component of the Hawk Air Defense Missile, are designated as a defense article on the U.S. Munitions List and require a license or written authorization from the U.S. State Department for export from the United States.

According to the factual basis filed in this case, which Tappin admitted was truthful and accurate, Tappin knowingly violated U.S. law by obtaining the specialized batteries under false pretenses. Tappin engaged in phone and email communications with an undercover federal agent to discuss payment and delivery arrangements. In October 2006, Tappin wired approximately $25,000 from a London financial institution to a bank account in the United States as payment for five of the specialized batteries. Using false shipping documentation, Tappin arranged for the transfer of the batteries to the United Kingdom without an export license through his specifically designated freight forwarders in violation of export control regulations.

During the investigation, Tappin even agreed to reimburse the undercover agent for $5,000 in fines purportedly being assessed against him by U.S. Customs authorities after they had seized the shipment of batteries.

Tappin, admittedly, also caused Caldwell to travel to San Antonio in January 2007 to take delivery of the batteries, ensure that they were shipped to him (Tappin) and to pay the undercover agent $5,000 for the current fines. Tappin, in court, acknowledged that his anticipated profit from the transaction was $11,357.14.

“Protecting our national security is one of HSI’s highest priorities,” said Dennis A. Ulrich, acting special agent in charge of HSI El Paso. “And this sentence is the result of more than six years of tenacious investigative work by HSI special agents, who were relentless in their efforts to prevent U.S. military products from being illegally exported and falling in the hands of our adversaries.”

In 2007, Gibson and Caldwell were sentenced to 24 months and 20 months, respectively, in federal prison for their roles in the scheme.

U.S. Attorney Pitman also commended HSI for investigating this matter as well as the United States Marshals Service and British authorities for their assistance during the extradition process.

Assistant United States Attorney Greg McDonald prosecuted this case on behalf of the Government.

Federal authorities last night arrested the remaining defendant, Odessa, TX, resident Brian Connell, age 28, charged in connection with a firearms straw purchasing and trafficking investigation announced United States Attorney Robert Pitman and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Dallas Field Office Special Agent in Charge Robert Champion.

Connell, who was arrested in Roswell, NM, as well as former Odessa residents Miguel Angel Compean, age 32, and his wife, Michelle Compean, age 27, are charged in a ten-count federal grand jury indictment returned last month with conspiracy to smuggle firearms from the United States. In addition to the conspiracy charge, Miguel Compean is charged with four counts of providing fraudulent or fictitious information while purchasing a firearm, one count of making a false statement in the acquisition of a firearm (straw purchasing) and, two counts of aggravated identity theft; Connell, two counts of making false statements in the acquisition of a firearm (straw purchasing); and Michelle Compean, one count of providing fraudulent or fictitious information while purchasing a firearm.

According to the indictment, the defendants conspired to surreptitiously purchase approximately 100 firearms, including AK-47 style rifles and pistols, from various firearms dealers in Odessa, Fort Worth, Dallas, Brenham and Mesquite, TX, in order to smuggle them from the United States into Mexico during a 13-month period beginning in December 2011. The indictment alleges that Miguel Compean recruited his wife, Michelle, and Brian Connell to purchase firearms on his behalf. The indictment also alleges that Miguel Compean illegally purchased firearms for himself by using a relative’s name, date of birth and social security number; and, that Michelle Compean and Brian Connell both made false statements on ATF Form 4473 at the time of a firearm purchase claiming to be the actual buyer. Furthermore, Miguel Compean allegedly paid Connell $300 for each firearm that Connell straw purchased and gave to Compean.

Connell remains in federal custody awaiting transfer to the Midland Division of the Western District of Texas. Beginning at 9:00am tomorrow before U.S. Magistrate Judge David Counts in Midland, Miguel Compean, who has been in state custody on unrelated charges, is scheduled to have his arraignment/detention hearing; Michelle Compean, who was arrested last month in Greenville, is scheduled to have her initial appearance/arraignment. No trial date has been scheduled.

Upon conviction, defendants face up to five years in federal prison on the conspiracy charge; up to five years in federal prison for each charge of providing false information while purchasing a firearm; up to ten years in federal prison for each charge of making false statement during a firearms purchase (straw purchasing); and, a consecutive two years in federal prison for each charge of aggravated identity theft.

This case was investigated by ATF agents. Assistant United States Attorney Will Tatum 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.

This morning, a federal criminal complaint was filed against 36-year-old San Antonio Police Officer Curtis W. Lundy charging him with theft of honest services by wire fraud announced United States Attorney Robert Pitman, Federal Bureau of Investigation Special Agent in Charge Armando Fernandez and San Antonio Police Chief William McManus.

According to the complaint, on December 15, 2012, Officer Lundy responded to a call concerning an assault in progress at a Northside apartment complex. At the scene, Officer Lundy detained an individual in connection with the assault after that individual admitted to Officer Lundy that he was in possession of a user amount of marijuana. While the subject was detained, Officer Lundy indicated that he would hold off on filing the possession of marijuana charge in exchange for a $400 payment. During subsequent phone conversations, Officer Lundy raised the payment to $500.

The complaint also states that earlier this week, the subject contacted the Federal Bureau of Investigation about the matter. At the FBI’s direction, the subject was able to make multiple audio recordings of cellular telephone conversations with Officer Lundy. During one of those conversations, Officer Lundy instructed the subject to meet yesterday afternoon in order to collect the $500. Surveillance observed Officer Lundy, the sole occupant, arrive in a marked SAPD patrol vehicle and collect an envelope from the subject which contained $500. Authorities arrested Officer Lundy last night after his shift was completed.

Upon conviction, Officer Lundy faces up to 20 years in federal prison and a maximum $250,000 fine. Officer Lundy appeared before United States Magistrate Judge John Primomo this morning for his initial appearance and was released on a personal recognizance bond.

This case was investigated by agents with the Federal Bureau of Investigation together with San Antonio Police Department Internal Affairs. Assistant United States Attorney Greg Surovic 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.

Today in Midland, 68-year-old Jimmy Wayne Wright, former owner of B & L Bookstore in Odessa, was sentenced to 20 months in federal prison after pleading guilty to possession with intent to distribute Methylenedioxypyrovalerone, or more commonly referred to as “bath salts,” announced United States Attorney Robert Pitman and Drug Enforcement Administration Special Agent in Charge Joseph M. Arabit.

In addition to the prison term, United States District Judge Robert A. Junell ordered that Wright be placed under supervised release for a period of three years after completing his prison term. Wright also agreed to forfeit $763,865.20 in cash and his business property to the Government.

In September 2012, Wright admitted that he had marketed “bath salts” under such false descriptive terms as “pipe cleaner,” “stain remover,” “plant food” and others for several months prior to March 2012. On March 6, 2012, DEA agents seized several containers of various types of “bath salts” that Wright had displayed for sale at his business, B & L Bookstore on North Mercury Avenue.

This investigation was conducted by agents with the Drug Enforcement Administration with assistance from the Federal Bureau of Investigation. This matter was prosecuted by Assistant United States Attorneys William Tatum and Brandi Young.