Southern District of Texas

HOUSTON – Doctor’s Hospital 1997 L.P. dba United Memorial Medical Center LLC (UMMC) has agreed to pay $2 million and to make additional contingent payments to resolve alleged False Claims Act violations.

UMMC is an entity that formerly operated hospitals in the Houston area. They allegedly claimed excessive cost outlier payments from government health care programs and double billed the government for COVID-19 tests that were also billed either to the State of Texas or the City of Houston.

According to the agreement between UMMC and the United States, the settlement funds will be paid by one of UMMC’s principals, Ravishanker Mallapuram, and UMMC has guaranteed the payment of those funds.  

“This over $2 million settlement is significant,” said U.S. Attorney Alamdar S. Hamdani for the Southern District of Texas (SDTX). “We depend upon medical providers to be good stewards of a community’s healthcare services and of the federally funded programs that pay for those services. The case alleges UMMC made millions by overbilling those health care programs and intentionally double billing for COVID-19 testing. Instead of returning those monies to America’s taxpayers, they allegedly pocketed the money for themselves. Finding the wrongdoing and lost monies in these types of cases involves complexities akin to playing three-dimensional chess, but know this, the SDTX will not stop in its quest for justice until it can claim checkmate.”

“Hospitals and other providers who participate in federal health care programs have an obligation to the taxpayers to ensure that they are billing appropriately,” said Principal Deputy Assistant Attorney General Brian Boynton, head of the Department of Justice’s Civil Division. “We will hold accountable those who knowingly overbill or double bill for the medical services they provide to federal beneficiaries.”

In addition to its standard payment system, Medicare and Tricare provide supplemental reimbursement to hospitals called “cost outlier” payments in cases where the cost of care is unusually high. Congress enacted the supplemental outlier payment system to ensure that hospitals possess the incentive to treat inpatients whose care requires unusually high costs. This settlement resolves allegations that UMMC submitted claims for cost outlier payments by rapidly increasing its charges for inpatient care and underreporting its charges on Medicare cost reports, thereby preventing the government health care programs from adjusting those charges so that they would reasonably reflect UMMC’s actual costs. The settlement also resolves allegations that UMMC concealed and improperly avoided its obligation to reimburse the federal health care programs for any excessive outlier payments its hospitals received.

In addition, UMMC has agreed to settle allegations that it submitted claims to the Health Resources and Services Administration’s Uninsured Program for COVID-19 testing services, despite being reimbursed for those same services by either the State of Texas or the City of Houston.  

“Hospitals and executives who run them should prioritize accurate, lawful billing of Medicare and other taxpayer-funded health care programs at all times,” said Special Agent in Charge Jason E. Meadows of the Department of Health and Human Services - Office of Inspector General (HHS-OIG). “This practice is especially imperative, however, when the world is responding to a public health crisis. At HHS-OIG, it is our fundamental responsibility to, along with our law enforcement partners, safeguard federally funded health care programs and American taxpayer monies.”

“The Department of Defense (DOD) Office of Inspector General's Defense Criminal Investigative Service (DCIS) is committed to rooting out fraud schemes that waste valuable taxpayer resources intended for the healthcare of our service members, military retirees and their families,” said Acting Special Agent in Charge Gregory P. Shilling of the DCIS Southwest Field Office. “DCIS, along with our law enforcement partners, will aggressively pursue and hold those accountable who took advantage of the pandemic for profit at the expense of DOD's taxpayer funded healthcare program, known as TRICARE.”

“The FBI and its partners will relentlessly pursue bad actors that participate in nefarious double billing at the cost of the American taxpayer and our health care system,” said Executive Assistant Director Timothy Langan of the FBI’s Criminal, Cyber, Response and Services Branch. “Violations of the False Claims Act will not be tolerated. If you do not follow the law, you will face the consequences of your noncompliance.”

The settlement resolves a lawsuit originally brought by Ryan Griffin, a former employee of UMMC, under the qui tam provisions of the False Claims Act. The Act permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery. Under the settlement announced today, Griffin will receive $300,000.

This settlement was the result of a coordinated effort by the Justice Department's Civil Division; the U.S. Attorney’s Office for the Southern District of Texas; HHS, Office of Counsel to the Inspector General and Office of Investigations; DCIS and the FBI.   

The lawsuit resolved by this settlement is captioned United States, et al., ex rel. Ryan Griffin v. Mediscope Global Services Pvt Ltd., et al., 3:21-cv-183 (S.D. TX.).

The claims resolved by the settlement are allegations only, and there has been no determination of liability.

CORPUS CHRISTI, Texas – A 54-year-old legal permanent resident of Mexico residing in San Antonio has been sentenced for possession with intent to distribute meth and failure to appear, announced U.S. Attorney Alamdar S. Hamdani.

Abel Avendano pleaded guilty for failing to appear and the underlying drug offense Feb. 1, 2022, and Oct. 27, 2022, respectively.

U.S. District Judge Nelva Gonzales Ramos has now ordered Avendano to serve 158 months in federal prison for the possession with intent to distribute meth. He also received 10 months for the failure to appear which must be served consecutively. Not a U.S. citizen, Avendano is expected to face removal proceedings following his total 168-month-term of imprisonment. In handing down the sentence, the court noted his role in the conspiracy and the amount of narcotics involved.

On June 19, 2020, Avendano approached the Falfurrias Border Patrol (BP) checkpoint. Authorities became suspicious when the driver of the vehicle appeared nervous. At secondary inspection, they found four kilograms of meth and discovered the vehicle had been stolen.

The investigation revealed a seizure of five kilograms of meth concealed in the same manner at the Pharr Port of Entry May 31, 2020. At that time, those arrested identified Avendano as the individual who hired them to transport the narcotics from Mexico. 

The court permitted Avendano to be released on bond after his arrest pending conditions. He subsequently cut off his ankle monitor and fled.

Avendano was been in custody since his re-arrest where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

The Drug Enforcement Administration conducted the investigation with the assistance of Customs and Border Protection. Assistant U.S. Attorney Barbara J. De Peña prosecuted the case.

CORPUS CHRISTI, Texas – A 25-year-old Donna man has been sentenced for conspiring to transport illegal aliens into the United States, announced U.S. Attorney Alamdar S. Hamdani.

Miguel Angel Hernandez pleaded guilty April 26.

U.S. District Judge Nelva Gonzales Ramos has now ordered Hernandez to serve 108 months in federal prison to be immediately followed by three years of supervised release. At the hearing, the court heard additional evidence regarding Hernandez’ violent history, including a conviction for robbery after he and others held a couple and their 7-year-old daughter at gun point while they robbed their fireworks stand. In handing down the sentence, the court noted there was a “huge number” of aliens involved in this case. Further, when Hernandez tried to say he wasn’t responsible for the age of the aliens or the conditions in which they were transported, Judge Ramos made it clear that as part of the conspiracy, he was responsible for the foreseeable actions of the others and he would be held accountable for that.

In July 2021, authorities discovered 67 undocumented aliens in the back of a tractor trailer. This began an almost two-year investigation into an alien smuggling organization who recruited drivers on social media and then failed to pay them for smuggling illegal aliens through Border Patrol checkpoints.

During the investigation, law enforcement discovered Hernandez was responsible for coordinating the smuggling of countless aliens, with at least 560 apprehended in failed attempts. 

The apprehended individuals included men, women and children who were often smuggled in dangerous and inhumane ways. Due to extreme temperatures, those smuggled sometimes needed immediate medical treatment for severe dehydration.  

In one of these cases, which occurred Sept. 11, 2022, authorities discovered 115 undocumented aliens in the back of a tractor trailer during a failed smuggling attempt.

“This individual oversaw a transnational criminal organization responsible for illegally smuggling thousands of noncitizens into the U.S. in the back of tractor trailers through the deadly Texas heat with no regard for their health and safety,” said Special Agent in Charge Mark Dawson, Homeland Security Investigations (HSI) Houston. “Today’s sentencing is the culmination of years of hard work by HSI Corpus Christi, HSI McAllen and our law enforcement partners in South Texas to successfully dismantle this human smuggling organization and restore some integrity to our nation’s immigration system.”

Hernandez will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

Homeland Security Investigations conducted the investigation with the assistance of Customs and Border Protection. Assistant U.S. Attorney Barbara J. De Peña prosecuted the case.

HOUSTON – The Justice Department and Consumer Financial Protection Bureau (CFPB) have sued Colony Ridge for operating an illegal land sales scheme and targeting tens of thousands of Hispanic borrowers with false statements and predatory loans.

“Today’s complaint alleges that Colony Ridge targeted Hispanic consumers with predatory loans, misled borrowers about the water, sewer and electrical infrastructure on its lots, and exploited language barriers by conducting most of its marketing in Spanish while offering important transaction documents only in English,” said Attorney General Merrick B. Garland. “Discrimination in lending harms families and neighborhoods for generations; it is wrong and has no place in our country. That is why I launched the Department’s Combating Redlining Initiative more than two years ago and why we remain steadfast in our commitment to continue this work.”

“Using 21st century social-media applications to target and mislead consumers, Colony Ridge set out to exploit something as old as America — an immigrant’s dream of owning a home,” said U.S. Attorney Alamdar S. Hamdani for the Southern District of Texas (SDTX). “As alleged in the complaint, Colony Ridge’s exploitative practice began with misleading advertising on platforms like TikTok and often ended with families facing economic ruin, no home, and shattered dreams. The SDTX, joined by our partners at the Justice Department’s Civil Rights Division and the CFPB, filed the complaint as a promise to work tirelessly to bring justice for the Hispanic families who fell prey to Colony Ridge’s alleged predatory lending practices and to send out a warning to the vulnerable: beware of lenders who use promises of easy financing to steal both nest-eggs and dreams.”

The lawsuit filed in federal district court alleges Colony Ridge sells unsuspecting families flood-prone land without water, sewer or electrical infrastructure, and that the company sets borrowers up to fail with loans they cannot afford. Roughly one-in-four Colony Ridge loans ends in foreclosure, after which the company repurchases the properties and sells them to new borrowers. The Justice Department and CFPB are seeking redress for borrowers Colony Ridge harmed and an immediate end to its illegal practices.

“Colony Ridge promised the American dream, but we allege that in reality, it has delivered a nightmare for thousands of hardworking Hispanic families who hoped to build their homes in the Terrenos Houston community,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “This lawsuit demonstrates our commitment to holding accountable those in the housing and financial industry who intentionally target and exploit homebuyers because they are Hispanic or don’t speak English well. Through our Combating Redlining Initiative, the Justice Department will aggressively continue to dismantle predatory, deceptive, and unfair lending practices to safeguard the rights of all who seek to buy a home.”

“The lawsuit filed in federal court by the CFPB and the Justice Department charges Colony Ridge with a slew of illegal misconduct and seeks to stop this set-up-to-fail scheme that has led thousands of families to lose their dreams of homeownership,” said CFPB Director Rohit Chopra. “Our investigation uncovered that Colony Ridge is baiting borrowers with lies, saddling families with predatory loans for homesites that the company knows have repeatedly flooded with raw sewage and lacked basic utility infrastructure.”

The lawsuit names as defendants three Texas-based Colony Ridge affiliate companies as well as Loan Originator Services, a nonbank mortgage company licensed to originate loans in Texas. Colony Ridge has developed more than 40,000 lots spread across an unincorporated area of Liberty County, approximately 30 miles northeast of Houston. Colony Ridge markets these subdivisions using the names “Terrenos Houston” and “Terrenos Santa Fe.”

According to the complaint, Colony Ridge targets Spanish-speaking borrowers. It advertises almost exclusively in Spanish, often in TikTok or other social media posts featuring, for example, national flags and regional music from Latin America. In these advertisements, Colony Ridge promises consumers the dream of homeownership with its own seller financing: an easy-to-obtain loan product that requires no credit check and only a small deposit.

The complaint further alleges Colony Ridge has lured tens of thousands of vulnerable Hispanic consumers into their predatory loan products. Foreclosure and property deed records from September 2019 through September 2022 show that Colony Ridge initiated foreclosures on at least 30% of seller-financed lots within just three years of the purchase date, with most loan failures occurring even sooner. Records also confirm that Colony Ridge accounted for more than 92% of all foreclosures recorded in Liberty County between 2017 and 2022.

Specifically, the complaint filed today alleges that Colony Ridge:

• Misleads borrowers about infrastructure on the lots it sells: Colony Ridge has falsely represented that lots in the Terrenos Houston subdivisions were sold with water, sewer and electrical infrastructure already in place. The complaint cites numerous advertisements including TikTok videos where the company makes claims like “Terrenos Houston tiene todos los servicios de ciudad por cada terreno” (“Terrenos Houston has all city services for each lot”). It is only after applicants pay a non-refundable deposit that Colony Ridge discloses the properties may not provide those services and makes that disclosure only in English.

• Sells lots that flood with rain and raw sewage: The complaint alleges that Colony Ridge employees fail to inform borrowers of flood risk when lots have repeatedly flooded in the past or falsely tells them the lots have not flooded. In fact, in parts of the Terrenos Houston subdivision, rain causes significant flooding causing raw sewage to run through or around borrowers’ property and damaging their personal belongings.

• Targets Hispanic consumers with predatory loans: Through direct-to-consumer marketing on websites, social media engagement, and telemarketing, Colony Ridge targets Hispanic consumers. Colony Ridge then exploits language barriers during its sales process and uses high-pressure sales tactics to push borrowers to obtain their loan product quickly. The loans have exorbitant interest rates. Between 2017 and 2021, interest rates on Colony Ridge’s loans ranged from between 10.9% to 12.9%, while a standard 20-year fixed rate loan averaged 2.35% to 4.05% during the same timeframe. And in extending the loan, Colony Ridge and Loan Originator Services did not collect information needed to determine if applicants can afford the loan.

• Churns through borrowers in a cycle of foreclosure: When families fall behind on payments and enter foreclosure, it allows Colony Ridge to “flip” the properties by repurchasing and reselling them, often at higher prices. Foreclosure and property deed records show that Colony Ridge flipped at least 40% of all the properties it sold between September 2019 and September 2022, selling approximately 8,237 properties twice, 3,267 properties three times and 2,067 properties four or more times in three years.

• Exploits language barriers at borrowers’ expense: While Colony Ridge conducts most of its marketing activities in Spanish, when it comes to the actual transaction it offers important documents only in English. Failing to offer borrowers accurate translations of contracts, deeds and other documents in the language in which it conducts the sales and exploiting borrowers’ limited English proficiency violates federal law.

Enforcement Action

The complaint alleges that defendants unlawfully discriminated against applicants on the basis of their race or national origin in violation of the Fair Housing Act (FHA). Under the FHA, the Justice Department has the authority to take enforcement action against real estate companies, lending institutions and other entities whose practices discriminate in residential real estate-related transactions, the availability of housing and housing-related services. The complaint also alleges that defendants unlawfully discriminated against applicants on the basis of their race or national origin in violation of the Equal Credit Opportunity Act (ECOA) and its implementing regulation, Regulation B. Both the Justice Department and CFPB have the authority to enforce ECOA. Additionally, the complaint alleges defendants’ deceptive acts and practices violate the Consumer Financial Protection Act of 2010 (CFPA) and the Interstate Land Sales Full Disclosure Act (ILSA) and its implementing regulations, Regulation K and Regulation J, all of which CFPB enforced.

The complaint seeks to stop Colony Ridge’s alleged unlawful conduct, provide relief for affected consumers and impose a civil penalty payable to the CFPB victims relief fund. If the defendants are found liable, the amount of any restitution will be determined in the litigation in federal court.

Anyone who believes they have been harmed by the practices of Colony Ridge Development LLC, Colony Ridge BV LLC, Colony Ridge Land LLC and Loan Originator Services LLC should call the Justice Department’s Housing Discrimination Hotline at 1-833-591-0291, press 1 for English, then 3 for fair lending and then 1 for Colony Ridge Lawsuit to leave a message. For the Spanish Hotline, callers should press 2 for Spanish, then 3 for fair lending and then 1 for Colony Ridge Lawsuit to leave a message. Individuals can also send an email to ColonyRidge.Lawsuit@usdoj.gov.

This lawsuit is a part of the Justice Department’s Combating Redlining Initiative. Redlining is the illegal practice where lenders deprive communities of color from equal access to loans and lending opportunities. Reverse redlining occurs when lenders target communities of color with inflated interest rates and/or other unjust lending terms. Both practices prevent communities of color from achieving sustainable homeownership and both deny these communities the opportunity to build wealth. 

The Combating Redlining Initiative is the Justice Department’s most aggressive and coordinated enforcement effort to address all forms of redlining. Since 2021, the Justice Department’s Combating Redlining Initiative has secured over $100 million and 10 settlement agreements with banks and mortgage lending institutions to provide credit opportunities to communities of color in Houston; Memphis, Tennessee; Philadelphia; Camden, New Jersey; Wilmington, Delaware; Newark, New Jersey; Los Angeles; Columbus, Ohio; Tulsa, Oklahoma; Rhode Island; and Jacksonville, Florida. The Department has partnered with U.S. Attorneys’ Offices, federal financial regulatory agencies, including the CFPB and state Attorneys General offices to enforce federal fair lending laws that prohibit redlining. This lawsuit is the first reverse redlining action under the initiative.

Read today’s complaint.

The Justice Department’s website has resources about fair lending. The Department accepts complaints of discrimination at www.civilrights.justice.gov/. Fair housing and lending discrimination complaints may also be sent to fairhousing@usdoj.gov.  

CFPB’s website has resources about credit discrimination and mortgages. Consumers can submit complaints about financial products or services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372). Employees of companies who they believe their company has violated federal consumer financial laws are encouraged to send information about what they know to whistleblower@cfpb.gov.

The Justice Department and Consumer Financial Protection Bureau (CFPB) today sued Colony Ridge, a Texas-based developer and lender, for operating an illegal land sales scheme and targeting tens of thousands of Hispanic borrowers with false statements and predatory loans.

“Today’s complaint alleges that Colony Ridge targeted Hispanic consumers with predatory loans, misled borrowers about the water, sewer, and electrical infrastructure on its lots, and exploited language barriers by conducting most of its marketing in Spanish while offering important transaction documents only in English,” said Attorney General Merrick B. Garland. “Discrimination in lending harms families and neighborhoods for generations, it is wrong, and it has no place in our country. That is why I launched the Department’s Combating Redlining Initiative more than two years ago and why we remain steadfast in our commitment to continue this work.”

The lawsuit filed in federal district court alleges Colony Ridge sells unsuspecting families flood-prone land without water, sewer, or electrical infrastructure, and that the company sets borrowers up to fail with loans they cannot afford. Roughly one-in-four Colony Ridge loans ends in foreclosure, after which the company repurchases the properties and sells them to new borrowers. The Justice Department and CFPB are seeking redress for borrowers harmed by Colony Ridge and an immediate end to its illegal practices.

“Colony Ridge promised the American dream, but we allege that in reality, it has delivered a nightmare for thousands of hardworking Hispanic families who hoped to build their homes in the Terrenos Houston community,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “This lawsuit demonstrates our commitment to holding accountable those in the housing and financial industry who intentionally target and exploit homebuyers because they are Hispanic or don’t speak English well. Through our Combating Redlining Initiative, the Justice Department will aggressively continue to dismantle predatory, deceptive, and unfair lending practices to safeguard the rights of all who seek to buy a home.”

“The lawsuit filed in federal court by the CFPB and the Justice Department charges Colony Ridge with a slew of illegal misconduct and seeks to stop this set-up-to-fail scheme that has led thousands of families to lose their dreams of homeownership,” said CFPB Director Rohit Chopra. “Our investigation uncovered that Colony Ridge is baiting borrowers with lies, saddling families with predatory loans for homesites that the company knows have repeatedly flooded with raw sewage and lacked basic utility infrastructure.”

“Using 21st century social-media applications to target and mislead consumers, Colony Ridge set out to exploit something as old as America — an immigrant’s dream of owning a home,” said U.S. Attorney Alamdar S. Hamdani for the Southern District of Texas (SDTX). “As alleged in the complaint, Colony Ridge’s exploitative practice began with misleading advertising on platforms like TikTok and often ended with families facing economic ruin, no home, and shattered dreams. The SDTX, joined by our partners at the Justice Department’s Civil Rights Division and the CFPB, filed the complaint as a promise to work tirelessly to bring justice for the Hispanic families who fell prey to Colony Ridge’s alleged predatory lending practices and to send out a warning to the vulnerable: beware of lenders who use promises of easy financing to steal both nest-eggs and dreams.”

The lawsuit names as defendants three Texas-based Colony Ridge affiliate companies, as well as Loan Originator Services, a nonbank mortgage company licensed to originate loans in Texas. Colony Ridge has developed more than 40,000 lots spread across an unincorporated area of Liberty County, Texas, approximately 30 miles northeast of Houston. Colony Ridge markets these subdivisions using the names “Terrenos Houston” and “Terrenos Santa Fe.”

According to the complaint, Colony Ridge targets Spanish-speaking borrowers: it advertises almost exclusively in Spanish, often in TikTok or other social media posts featuring, for example, national flags and regional music from Latin America. In these advertisements, Colony Ridge promises consumers the dream of homeownership with its own seller financing: an easy-to-obtain loan product that requires no credit check and only a small deposit.

The complaint further alleges that Colony Ridge has lured tens of thousands of vulnerable Hispanic consumers into their predatory loan products. Foreclosure and property deed records from September 2019 through September 2022 show that Colony Ridge initiated foreclosures on at least 30% of seller-financed lots within just three years of the purchase date, with most loan failures occurring even sooner. Records also confirm that Colony Ridge accounted for more than 92% of all foreclosures recorded in Liberty County between 2017 and 2022.

Specifically, the complaint filed today alleges that Colony Ridge:

• Misleads borrowers about infrastructure on the lots it sells: Colony Ridge has falsely represented that lots in the Terrenos Houston subdivisions were sold with water, sewer, and electrical infrastructure already in place. The complaint cites numerous advertisements, including TikTok videos where the company makes claims like “Terrenos Houston tiene todos los servicios de ciudad por cada terreno” (“Terrenos Houston has all city services for each lot”). It is only after applicants pay a non-refundable deposit that Colony Ridge discloses the properties may not provide those services and makes that disclosure only in English.

• Sells lots that flood with rain and raw sewage: The complaint alleges that Colony Ridge employees fail to inform borrowers of flood risk when lots have repeatedly flooded in the past, or falsely tells them the lots have not flooded. In fact, in parts of the Terrenos Houston subdivision, rain causes significant flooding, causing raw sewage to run through or around borrowers’ property, and damaging their personal belongings.

• Targets Hispanic consumers with predatory loans: Through direct-to-consumer marketing on websites, social media engagement, and telemarketing, Colony Ridge targets Hispanic consumers. Colony Ridge then exploits language barriers during its sales process and uses high-pressure sales tactics to push borrowers to obtain their loan product quickly. The loans have exorbitant interest rates. Between 2017 and 2021, interest rates on Colony Ridge’s loans ranged from between 10.9% to 12.9%, while a standard 20-year fixed rate loan averaged 2.35% to 4.05% during the same timeframe. And in extending the loan, Colony Ridge and Loan Originator Services did not collect information needed to determine if applicants can afford the loan.

• Churns through borrowers in a cycle of foreclosure: When families fall behind on payments and enter foreclosure, it allows Colony Ridge to “flip” the properties by repurchasing and reselling them, often at higher prices. Foreclosure and property deed records show that Colony Ridge flipped at least 40% of all the properties it sold between September 2019 and September 2022, selling approximately 8,237 properties twice, 3,267 properties three times, and 2,067 properties four or more times in three years.

• Exploits language barriers at borrowers’ expense: While Colony Ridge conducts most of its marketing activities in Spanish, when it comes to the actual transaction it offers important documents only in English. Failing to offer borrowers accurate translations of contracts, deeds, and other documents in the language in which it conducts the sales and exploiting borrowers’ limited English proficiency violates federal law.

Enforcement Action

The complaint alleges that defendants unlawfully discriminated against applicants on the basis of their race or national origin in violation of the Fair Housing Act (FHA). Under the FHA, the Justice Department has the authority to take enforcement action against real estate companies, lending institutions, and other entities whose practices discriminate in residential real estate-related transactions, the availability of housing, and housing-related services. The complaint also alleges that defendants unlawfully discriminated against applicants on the basis of their race or national origin in violation of the Equal Credit Opportunity Act (ECOA), and its implementing regulation, Regulation B. Both the Justice Department and CFPB have the authority to enforce ECOA. Additionally, the complaint alleges defendants’ deceptive acts and practices violate the Consumer Financial Protection Act of 2010 (CFPA) and the Interstate Land Sales Full Disclosure Act (ILSA) and its implementing regulations, Regulation K and Regulation J, all of which is enforced by CFPB.

The complaint seeks to stop Colony Ridge’s alleged unlawful conduct, provide relief for affected consumers, and impose a civil penalty payable to the CFPB victims relief fund. If the defendants are found liable, the amount of any restitution will be determined in the litigation in federal court.

Anyone who believes they have been harmed by the practices of Colony Ridge Development LLC, Colony Ridge BV LLC, Colony Ridge Land LLC, and Loan Originator Services LLC should call the Justice Department’s Housing Discrimination Hotline at 1-833-591-0291, press 1 for English, then 3 for fair lending, and then 1 for Colony Ridge Lawsuit to leave a message. For the Spanish Hotline, callers should press 2 for Spanish, then 3 for fair lending, and then 1 for Colony Ridge Lawsuit to leave a message. Individuals can also send an email to ColonyRidge.Lawsuit@usdoj.gov.

This lawsuit is a part of the Justice Department’s Combating Redlining Initiative. Redlining is the illegal practice where lenders deprive communities of color from equal access to loans and lending opportunities. Reverse redlining occurs when lenders target communities of color with inflated interest rates and/or other unjust lending terms. Both practices prevent communities of color from achieving sustainable homeownership and both deny these communities the opportunity to build wealth. 

The Combating Redlining Initiative is the Justice Department’s most aggressive and coordinated enforcement effort to address all forms of redlining. Since 2021, the Justice Department’s Combating Redlining Initiative has secured over $100 million and 10 settlement agreements with banks and mortgage lending institutions to provide credit opportunities to communities of color in Houston; Memphis, Tennessee; Philadelphia; Camden, New Jersey; Wilmington, Delaware; Newark, New Jersey; Los Angeles; Columbus, Ohio; Tulsa, Oklahoma; Rhode Island; and Jacksonville, Florida. The Department has partnered with U.S. Attorneys’ Offices, federal financial regulatory agencies, including the CFPB, and state Attorneys General offices to enforce federal fair lending laws that prohibit redlining. This lawsuit is the first reverse redlining action under the initiative.

The Justice Department’s website has resources about fair lending. The Department accepts complaints of discrimination at www.civilrights.justice.gov/. Fair housing and lending discrimination complaints may also be sent to fairhousing@usdoj.gov.  

CFPB’s website has resources about credit discrimination and mortgages. Consumers can submit complaints about financial products or services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372). Employees of companies who they believe their company has violated federal consumer financial laws are encouraged to send information about what they know to whistleblower@cfpb.gov.

colony_ridge_complaint.pdf

El Departamento de Justicia y la Oficina para la Protección Financiera del Consumidor (CFPB, por sus siglas en inglés) demandaron hoy a Colony Ridge, una empresa desarrolladora y prestamista con sede en Texas, por operar un esquema ilegal de ventas de tierras, y por hacer blanco de decenas de miles de prestatarios hispanos haciendo falsas declaraciones y ofreciéndoles préstamos depredadores.

“La demanda de hoy alega que Colony Ridge usó a consumidores hispanos como blanco de sus préstamos depredadores, mintió a los prestatarios acerca de la infraestructura para agua, cloacas y electricidad disponible en sus lotes, y se aprovechó de las barreras del idioma, efectuando la mayor parte de su mercadeo en español, mientras ofrecía importantes documentos transaccionales solamente en inglés”, dijo el Fiscal General Merrick B. Garland. “La discriminación crediticia afecta a familias y comunidades por generaciones, no es correcto, y no tiene cabida en nuestro país. Es por ello que, desde hace dos años, he lanzado la Iniciativa para Combatir la Exclusión Financiera en el Departamento de Justicia, y por lo que nos mantenemos determinados a continuar esta labor”.

La demanda presentada en un tribunal de distrito federal alega que Colony Ridge vende a familias desprevenidas tierras propensas a inundaciones sin agua, alcantarillado o infraestructura eléctrica, y que la empresa prepara a los prestatarios para que quiebren con préstamos que no pueden pagar. Aproximadamente uno de cada cuatro préstamos de Colony Ridge termina en ejecución hipotecaria, después de lo cual la empresa recompra las propiedades y las vende a nuevos prestatarios. El Departamento de Justicia y la CFPB buscan reparación para los prestatarios perjudicados por Colony Ridge y el fin inmediato de sus prácticas ilegales.

“Colony Ridge prometía cumplir el sueño americano, pero alegamos que en realidad solo le ha creado pesadillas a miles de familias trabajadoras hispanas, que esperaban poder construir sus hogares en la comunidad Terrenos Houston”, dijo Kristen Clarke, Fiscal General Auxiliar de la División de Derechos Civiles del Departamento de Justicia. “Esta demanda demuestra nuestro compromiso de hacer rendir cuentas a aquellos que, dentro de la industrias hipotecaria y financiera, busquen hacer blanco y explotar a compradores de vivienda solo por ser hispanos o no hablar bien inglés. A través de nuestra Iniciativa para Combatir la Exclusión Financiera, el Departamento de Justicia continuará agresivamente desmantelando prácticas depredadoras, engañosas e injustas en el otorgamiento de crédito, para salvaguardar los derechos de todo quienes busquen comprar una vivienda”.

“La demanda de la CFPB y el Departamento de Justicia en el tribunal federal alega un sinnúmero de cargos contra Colony Ridge de una serie de conductas ilegales y busca detener este plan preparado para fracasar que ha llevado a miles de familias a perder sus sueños de tener vivienda propia”, dijo el director de la CFPB, Rohit Chopra. “Nuestra investigación descubrió que Colony Ridge está hostigando a prestatarios con mentiras, recargando a las familias con préstamos abusivos para terrenos que la compañía sabe que se han inundado repetidamente con aguas residuales y carecían de infraestructura de servicios básicos”.

“Al usar aplicaciones de redes sociales del siglo 21 para hacer blanco de consumidores y engañarlos, Colony Ridge explotó algo que es tan antiguo como nuestro país, el sueño de un inmigrante a tener su propia vivienda”, dijo Alamdar S. Hamdani, Fiscal de los Estados Unidos para el Distrito Sur de Texas (SDTX, por sus siglas en inglés). “Como alegamos en la demanda, la práctica explotadora de Colony Ridge comenzaba con publicidad engañosa en plataformas de redes sociales, como Tik Tok, y terminaba con familias económicamente arruinadas, sin casa, cuyos sueños han sido destruidos. El SDTX, junto a la División de Derechos Civiles del Departamento de Justicia y la CFPB, ha entablado esta demanda como una promesa de trabajar incansablemente por las familias hispanas que fueron víctimas de las supuestas prácticas predatorias de otorgamiento de crédito de Colony Ridge, y como advertencia a quienes se sientan vulnerables para que no confíen en prestamistas que prometan financiamiento fácil, y luego roben sus ahorros y sueños”. 

La demanda nombra como demandados a tres compañías afiliadas a Colony Ridge, así como también a Loan Originator Services, una empresa hipotecaria no bancaria, que tiene licencia del estado de Texas para otorgar préstamos. Colony Ridge ha desarrollado más de 40,000 lotes de tierras, esparcidos en un área no incorporada del condado Liberty en Texas, aproximadamente a 30 millas al noroeste de la cuidad de Houston. Colony Ridge mercadea estas subdivisiones como “Terrenos Houston” y “Terrenos Santa Fe”.

Según la demanda, Colony Ridge hace blanco de prestatarios hispanoparlantes: La compañía pública casi exclusivamente en español, frecuentemente usando Tik Tok u otros mensajes en redes sociales donde muestran, por ejemplo, banderas y música regional de países de Latino América. En sus piezas publicitarias, Colony Ridge les promete a los consumidores la posibilidad de cumplir su sueño de tener su propia vivienda, usando su propio financiamiento del vendedor; un préstamo fácil de obtener, que no requiere revisión de crédito y sólo exige un pequeño depósito.

La demanda alega que Colony Ridge ha inducido a decenas de miles de consumidores hispanos a tomar sus productos crediticios depredadores. Datos sobre ejecuciones hipotecarias y títulos de propiedad, desde septiembre del 2019 a septiembre del 2022, muestran que Colony Ridge inició ejecuciones hipotecarias en, al menos, 30% de los lotes de tierras financiados por el vendedor, en los primeros tres años después de la compra, mientras la mayoría de los préstamos fallaban incluso antes de tres años. Los datos confirman que Colony Ridge fue responsable de más del 92% de las ejecuciones hipotecarias registradas en el condado Liberty entre los años 2017 y 2022.

Específicamente, la demanda radicada hoy alega que Colony Ridge:

• Engaña a los prestatarios acerca de la infraestructura existente en los lotes que vende: Colony Ridge ha hecho creer falsamente que los lotes en las subdivisiones Terrenos de Houston, son vendidos con infraestructura ya instalada para servicios de agua, cloacas y electricidad. La demanda cita numerosos anuncios publicitarios, incluyendo videos en Tik Tok, en los cuales la compañía hace declaraciones como: “Terrenos Houston tiene todos los servicios de ciudad por cada terreno”. Solamente después que los solicitantes han pagado depósitos no reembolsables que Colony Ridge les informa que la propiedad podría no contar con dicha infraestructura, y hace esa declaración solamente en inglés.

• Vende lotes de tierra que se inundan por la lluvia o con aguas de cloaca: La demanda alega que los empleados de Colony Ridge no informan a los prestamistas de los riesgos de inundación de lotes que ya se han inundado repetidamente en el pasado, o falsamente aseguran que nunca se han inundado. De hecho, en algunas partes de la subdivisión Terrenos Houston, la lluvia provoca inundaciones severas, lo que causa que las aguas de cloaca corran a través o alrededor de las propiedades de los prestatarios, y dañen sus pertenencias. 
• Hicieron blanco a consumidores hispanos con préstamos abusivos: A través del mercadeo directo al consumidor en sitios web, la participación en las redes sociales y el telemercadeo, Colony Ridge hizo blanco a consumidores hispanos. Luego Colony Ridge explota las barreras del idioma durante su proceso de ventas y utiliza tácticas de ventas de alta presión para presionar a los prestatarios para que obtengan su producto crediticio rápidamente. Los préstamos tienen tasas de interés exorbitantes. Entre 2017 y 2021, las tasas de interés de los préstamos de Colony Ridge oscilaron entre el 10,9% y el 12,9%, mientras que un préstamo estándar de tasa fija a 20 años promedió entre el 2,35% y el 4,05% durante el mismo período de tiempo. Y al otorgar el préstamo, Colony Ridge y Loan Originator Services no recopilaron la información necesaria para determinar si los solicitantes pueden pagar el préstamo.
• Exprime a los prestatarios en un ciclo que lleva a la ejecución hipotecaria: Al atrasarse las familias con sus pagos y caer en una ejecución hipotecaria, Colony Ridge puede “flip” o “voltear” las propiedades comprándolas nuevamente y revendiéndolas, muchas veces a precios más altos. Datos sobre ejecuciones hipotecarias y títulos de propiedad muestran que Colony Ridge volteó al menos, el 40 por ciento de las propiedades que vendió entre septiembre del 2019 y septiembre del 2022. En tres años, la compañía vendió aproximadamente 8,237 propiedades dos veces, vendió otras 3,267 tres veces y otras 2,067 cuatro o más veces.

• Explota las barreras del idioma que tienen los prestatarios: Mientras que Colony Ridge efectúa la mayor parte de su publicidad en español, cuando se trata de transacciones, ofrece importantes documentos solamente en inglés. Fallar en ofrecerles a los prestatarios traducciones exactas de contratos, pagarés y otros documentos, en el lenguaje en el cual habían efectuado la venta y explotar la capacidad limitada de hablar inglés de los prestatarios, viola leyes federales.

Acción de cumplimiento de ley

La demanda alega que los demandados ilegalmente discriminaron a los solicitantes basándose en su raza u origen nacional, violando la Ley de Vivienda Justa (FHA, por sus siglas en inglés). Según lo establecido en la FHA, el Departamento de Justicia tiene la autoridad de tomar acciones de ejercicio de ley contra compañías de bienes raíces, instituciones de crédito y otras entidades, cuyas prácticas discriminen en la realización de transacciones de bienes raíces, en la disponibilidad de vivienda, y en la oferta de servicios de vivienda. La demanda también alega que los demandados ilegalmente discriminaron a los solicitantes basándose en su raza u origen nacional, violando lo establecido en la Ley de Igualdad de Oportunidad de Crédito (ECOA, por sus siglas en inglés) y sus Normativa de Implementación B. Tanto el Departamento de Justicia como la CFPB tienen la autoridad para hacer cumplir la ECOA. Adicionalmente, la demanda alega que los actos y prácticas engañosas de los demandados violaron lo establecido por la Ley de Protección Financiera del Consumidor (CFPA, por sus siglas en inglés) del 2010 y la Ley de Divulgaciones Completas en Ventas de Tierras (ILSA, por sus siglas en inglés) y sus Normativas de Implementación K y J, sobre las cuales, la CFPB tiene la autoridad para ejercer su cumplimiento.

La demanda busca poner fin a la supuesta conducta ilegal de la compañía Colony Ridge, proveer reparaciones a los consumidores afectados e imponerle una multa monetaria civil que será depositada en el fondo de la CFPB para el alivio de víctimas (en inglés). Si los demandados son encontrados responsables, el monto de cualquier indemnización será determinado durante la litigación en la corte federal.

Toda persona que crea haber sido afectada por las prácticas de negocios de Colony Ridge Development LLC, Colony Ridge BV LLC, Colony Ridge Land LLC y Loan Originator Services LLC, debe llamar a la Línea de Ayuda Contra la Discriminación del Departamento de Justicia, al 1-833-591-0291, marque el 2 para hablar en español, marque el 3 para seleccionar discriminación en préstamos justos y marque el 1 para dejar un mensaje de Colony Ridge, o escriba a la dirección email ColonyRidge.Lawsuit@usdoj.gov.

Esta demanda forma parte de la Iniciativa para Combatir la Exclusión Financiera del Departamento de Justicia. La exclusión es una práctica ilegal, a través de la cual, los prestamistas les niegan a comunidades de color, acceso equitativo a oportunidades de préstamos y crédito. La exclusión reversa ocurre cuando los prestamistas ofrecen tasas de interés infladas y términos de crédito injustos a comunidades de color. Ambas prácticas evitan que estas comunidades alcancen una propiedad de vivienda sostenible, y les niega la oportunidad de construir riqueza.

La Iniciativa para Combatir la Exclusión Financiera es el esfuerzo de cumplimiento de ley más agresivo y coordinado del Departamento de Justicia para enfrentar toda forma de exclusión. Desde el año 2021, la misma ha obtenido más de $100 millones en 10 acuerdos de resolución alcanzados con bancos e instituciones crediticias, para proveer de oportunidades de acceso al crédito a comunidades de color en Houston, Memphis (Tennessee), Philadelphia, Camden (New Jersey), Wilmington (Delaware), Newark (New Jersey), Los Angeles, Columbus (Ohio), Tulsa (Oklahoma), Rhode Island, y Jacksonville (Florida). El Departamento de Justicia se ha asociado con las Oficinas de los Fiscales Federales, agencias federales reguladoras de la industria financiera, incluyendo a la CFPB, y las Oficinas de fiscalías estatales, para hacer cumplir las leyes federales de equidad en el crédito que prohíben la exclusión. Esta demanda, es la primera acción contra la exclusión reversa, tomada bajo la iniciativa.

La página web del Departamento de Justicia ofrece recursos sobre la equidad en el crédito. El Departamento de Justicia recibe quejas sobre discriminación en la página www.civilrights.justice.gov/. Quejas acerca de discriminación en vivienda o crediticia también pueden ser enviadas escribiendo a la dirección email fairhousing@usdoj.gov.

La página web de la CFPB ofrece recursos sobre la discriminación en el crédito (en inglés) e hipotecas. Los consumidores pueden enviar quejas en la página de la CFPB, o llamando al (855) 411-CFPB (2372). Se les alienta a aquellos empleados que crean que las compañías donde trabajan han violado leyes de protección financiera al consumidor a enviar la información que tengan a la dirección whistleblower@cfpb.gov.

colony_ridge_complaint.pdf

McALLEN, Texas – A 45-year-old Chinese national has been convicted for transporting child pornography, announced U.S. Attorney Alamdar S. Hamdani.

On or about May 8, Tong Sun attempted to illegally enter the country in an area near Roma. Law enforcement took him into custody, at which time they discovered several videos that constituted child sexual abuse material or child pornography on his phone.

One of the videos depicted a child who appeared to be younger than five years of age.

Sun admitted to ownership of the phone and to possessing the child sexual abuse material.

U.S. Magistrate Judge Juan F. Alanis accepted the plea and set sentencing for March 25, 2024. At that time, Sun faces up to 20 years in federal prison and a possible $250,000 maximum fine. He has been and will remain in custody pending sentencing.

Homeland Security Investigations and Border Patrol conducted the investigation.

Assistant U.S. Attorney Cahal P. McColgan is prosecuting the case, which was brought as part of Project Safe Childhood (PSC), a nationwide initiative the Department of Justice (DOJ) launched in May 2006 to combat the growing epidemic of child sexual exploitation and abuse. U.S. Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section leads PSC, which marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children and identifies and rescues victims. For more information about PSC, please visit DOJ’s PSC page. For more information about internet safety education, please visit the resources link on that page.

CORPUS CHRISTI, Texas – A 43-year-old man has been ordered to prison for enticement of a minor, possession of child pornography and transportation of undocumented aliens, announced U.S. Attorney Alamdar S. Hamdani.

Paz Gomez-Magdaleno pleaded guilty on March 1.

U.S. District Judge Nelva Gonzales Ramos has now sentenced Gomez-Magdaleno to 60, 120 and 240 months for the transportation of undocumented aliens, possession of child pornography and enticement of a minor convictions, respectively. At the hearing, the court heard Gomez had child pornography of relatives and minors from the local community. In addition, Gomez had obtained images of child pornography from minors over the internet from interactions through various social media apps. Gomez will serve the rest of his life on supervised release following completion of his prison term. During that time, he will have to comply with numerous requirements designed to restrict his access to children and the internet. Gomez will also be ordered to register as a sex offender. Restitution to the victims will be determined at a later date.

On Jan. 28, 2021, Gomez drove his tractor-trailer to the primary inspection lane at the U.S. Border Patrol checkpoint near Sarita. A K-9 alerted to the vehicle indicating there were potential individuals concealed inside the trailer of the vehicle.

Upon further inspection, authorities discovered 20 undocumented aliens in the trailer and two cell phones within the vehicle.

Law enforcement obtained search warrants for the cell phones and discovered them to contain images and videos of child pornography. Authorities further discovered Gomez engaging in numerous conversations on different messaging apps.

An investigation revealed Gomez sought out minors to send him explicit photos and videos in exchange for money and gifts.

Gomez has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

Homeland Security Investigations conducted the investigation with assistance of the Border Patrol and Cameron County Sheriff’s Office.

Assistant U.S. Attorneys Patrick Overman and John Marck prosecuted the case, which was brought as part of Project Safe Childhood (PSC), a nationwide initiative the Department of Justice (DOJ) launched in May 2006 to combat the growing epidemic of child sexual exploitation and abuse. U.S. Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section leads PSC, which marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children and identifies and rescues victims. For more information about PSC, please visit DOJ’s PSC page. For more information about internet safety education, please visit the resources link on that page.

CORPUS CHRISTI, Texas – Two Rio Grande Valley residents have been sentenced in for drug and money laundering conspiracies, announced U.S. Attorney Alamdar S. Hamdani.

Luis Ortiz III, 43, Mission, pleaded guilty June 21, 2019, while Rodolfo Hernandez Ramos 44, Los Fresnos, entered his plea Aug. 9, 2019, to conspiracy to possess with intent to distribute five or more kilograms of cocaine and 1,000 or more kilograms of marijuana. They also admitted to a conspiracy to launder drug proceeds in the form of bulk U.S. currency between July 1, 2014, and March 19, 2019.

U.S. District Judge Nelva Gonzales Ramos has now ordered Ramos to serve a total of 135 months in federal prison while Ortiz was ordered to serve 100 months imprisonment.

The investigation focused on a group of cocaine and marijuana distributors in the Rio Grande Valley and their sources of drugs who smuggled these drugs into the United States from Mexico. Drugs were smuggled into the country in passenger vehicles, large trucks and dropped from aircraft.

Ramos and Ortiz worked within the drug trafficking organization by operating stash houses to prepare the drugs for shipment within the United States. The partnership also used trucks to deliver cocaine and marijuana to the customers in 22 other states. Both men were also responsible for having the proceeds of the drug sales transported back to South Texas for delivery to the suppliers.

Ramos has been and will remain in custody pending transfer to a U.S. Bureau of Prisons (BOP) facility to be determined in the near future. Luis Ortiz III was permitted to remain to remain on bond and voluntarily surrender at a later date.

The Drug Enforcement Administration and IRS – Criminal Investigation conducted the Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts and dismantles the highest-level drug traffickers, money launderers, gangs and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state and local law enforcement agencies against criminal networks. Additional information about the OCDETF Program can be found on the Department of Justice’s OCDETF webpage.

Assistant U.S. Attorney Kenneth Cusick prosecuted the case.  

HOUSTON – A 32-year-old man who resided in Houston has been sentenced to federal prison for trafficking a 15-year-old girl for commercial sex using force, fraud or coercion, announced U.S. Attorney Alamdar S. Hamdani.

A federal jury convicted Giovanny Xavier Limon aka Ace or Ace One July 31 following a four-day trial.

U.S. District Judge David Hittner has now ordered Limon to serve 40 years in federal prison to be immediately followed by 10 years of supervised release. At the hearing, the court heard from the victim who recounted her ordeal, noting how she was young and desperate, how she showed her weakness and Limon took advantage of that and how she let him rob her of her happiness and a real smile. “Boy I’ve been waiting for this day,” she said. “To spit on you how you spit on me. My past does not and will not define me or my future, and after today I will not let you be in my shadow no longer. You took my life but I'm still breathing to live another day.”

“Sex traffickers have a PhD in manipulation using their skills to exploit our children and steal their innocence,” said Hamdani. “Although Limon stole that from this victim, he could not take her courage. She faced her oppressor at trial, recounting how Limon used her body, selling it to men as a commodity and raping it for his sick pleasure. Thanks to her, the next generation of children will be free—free from a predator’s grasp.”

“This case is a sad and angering example of innocence lost at the hands of sex traffickers like Limon who don’t care about anything other than exploiting our children,” said Acting Special Agent in Charge David Martinez of the FBI Houston Field Office. “Fortunately, the young victim in this case was rescued by law enforcement but not before being put through a month of hell by her trafficker. May his sentence serve as a promise to other sex traffickers and their victims that justice will be done.”

Limon trafficked a 15-year-old minor female for commercial sex during May and June 2022. After meeting her, he soon realized how he could isolate her from her companions and exploit her. She had no phone, little access to the internet and, most importantly, no money to support herself.

At trial, the jury heard evidence detailing how Limon forced the minor victim to engage in commercial sex with strangers on numerous occasions. Limon provided her with lingerie, photographed her and forced her to turn over all proceeds to him. 

Limon caused the images to be posted, displaying his moniker “Ace One,” to commercial sex ads on the internet. The ads featured her posing in seductive lingerie on a bed. Limon and others created these ads portraying the minor as adult interested in engaging in commercial sex. 

He controlled the victim and had them staying in several questionable motels. At one of these locations, he tattooed her entire inner forearm with the name of one of her relatives who she lost during the pandemic. The tattoo was so poorly done that after the trial, and with parental permission, she had it revised to represent something other than a memory of the Limon caused her. 

Throughout the time she was with him, Limon provided her with illicit drugs, including meth, and fed her very little food. When he was not causing her to engage in commercial sex, Limon was having sex with her himself, knowing she was only 15 years of age.  

The victim testified at trial describing her month-long ordeal in detail.

The jury also saw hotel records, internet sex ads and heard the testimony of the sexual assault treatment exam nurse.

Limon has been and will remain in custody where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

The FBI conducted the investigation as part of the Human Trafficking Rescue Alliance (HTRA). Assistant U.S. Attorneys Sherri L. Zack and Kimberly Ann Bulger Leo prosecuted the case.

HTRA law enforcement includes members of the Houston Police Department, FBI, Homeland Security Investigations, Texas Attorney General’s Office, IRS Criminal Investigation, Department of Labor (DOL), DOL – Wage and Hour Division, Department of State, Texas Alcoholic and Beverage Commission, Texas Department of Public Safety, Department of Homeland Security – Office of Inspector General (OIG), Social Security Administration – OIG and Sheriff’s Offices in Harris and Montgomery counties in coordination with District Attorney’s offices in Harris, Montgomery and Fort Bend Counties.

Established in 2004, the United States Attorney’s office in Houston formed HTRA to combine resources with federal, state and local enforcement agencies and prosecutors, as well as non-governmental service organizations to target human traffickers while providing necessary services to those that the traffickers victimized. Since its inception, HTRA has been recognized as both a national and international model in identifying and assisting victims of human trafficking and prosecuting those engaged in trafficking offenses.

HOUSTON – A 38-year-old man has been indicted for wire fraud and money laundering, announced U.S. Attorney Alamdar S. Hamdani.

Authorities arrested Antonio Jackson Jr. this morning. He is expected to make his initial appearance before U.S. Magistrate Judge Yvonne Y. Ho at 2 p.m.

The indictment, returned Dec. 12, alleges Jackson fraudulently obtained approximately $492,611 in funds through the Small Business Administration’s (SBA) Payroll Protection Program and Economic Injury Disaster Loan Program.

According to the indictment, Jackson submitted false information and documents to the SBA to fraudulently obtain COVID-19 related loans. In his loan applications, Jackson allegedly claimed to be the owner and operator of multiple businesses with dozens of employees and millions in revenue and payroll expenses.

The charges allege the businesses were fictional. Jackson is alleged to have submitted fabricated payroll records, profit and loss statements as well as tax records to induce the SBA to approve the loans. 

Jackson allegedly used the fraudulently obtained funds to purchase luxury retail goods, exotic trips and luxury vehicles.

Jackson is charged with four counts of wire fraud and four counts of money laundering. If convicted, he faces up to 20 years in prison and a possible $250,000 maximum fine.

The SBA - Office of Inspector General conducted the investigation. Assistant U.S. Attorney Andrew Swartz is prosecuting the case.

An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.

LAREDO – A federal jury has convicted a 40-year-old Mexican citizen residing in Laredo on multiple counts for conspiracy to possess with intent to distribute cocaine, kidnapping and murder-for-hire, announced U.S. Attorney Alamdar S. Hamdani.

The jury deliberated for approximately one hour before finding Noe Gonzalez-Martinez aka Tocayo guilty on all counts as charged following a three-day trial.

Gonzalez-Martinez was convicted of conspiracy to possess with intent to distribute five kilograms or more of cocaine, murder-for-hire conspiracy, murder for hire, conspiracy to kidnap, possession of firearms in furtherance of drug trafficking related crime and interstate travel in aid of racketeering. 

During the trial, the jury heard evidence that between Sept. 7, 2021, and Sept. 13, 2021, Gonzalez-Martinez, a leader and manager of the Cartel Del Noreste (CDN), and several other CDN members traveled from Nuevo Laredo, Tamaulipas, Mexico, into Laredo. There, Gonzalez-Martinez solicited the help of other CDN affiliates to recruit, plan and coordinate the kidnapping and murder of an individual the Cartel believed had stolen from them.

The investigation revealed Gonzalez-Martinez communicated via cellphone with co-conspirators to plan and coordinate the recovery of drugs and proceeds from the intended victim. In addition, Gonzalez-Martinez provided co-conspirators with an address where they could retrieve firearms and a vehicle to execute the murder.

On Sept. 13, 2021, co-conspirators took possession of an automobile and firearms to carry out the murder. The firearms included a Colt Government Model caliber .45 pistol, Trooper MKIII caliber .357 magnum revolver, Bushmaster caliber .223-5.56 mm rifle and a Colt AR-15 A2 caliber .223.

Law enforcement set up the arrest of three “sicarios” (hitmen) who were secreted into Laredo by the CDN. The sicarios were led to a vehicle and firearms in an undercover operation. Authorities apprehended all three sicarios during a joint law enforcement operation.

The jury also heard testimony from all law enforcement agencies involved in the operation. Authorities detailed their investigation into the cellphones used by the CDN to commit this crime, the firearms obtain by the CDN and the defendants border crossing. A co-conspirator provided insider knowledge of the CDN and its operations. Additionally, he admitted to the jury he was a sicario, a hired killer for the CDN and his participation in the crime.

Co-conspirators Juan Antonio Martinez-Padilla aka Juan Antonio Martinez-Lopez or Otoniel Martinez-Padilla, 58, Gregorio Gonzalez-Barragan, 33, and Rodolfo Reyna-Zapata, 25, all from Nuevo Laredo, Mexico, previously pleaded guilty to the kidnapping conspiracy and are pending sentencing on that charge.

U.S. District Judge Nelva Gonzales Ramos presided over the trial and set sentencing for March 25, 2024. At that time, Gonzalez-Martinez faces up to life in federal prison. He has been and will remain in custody pending that hearing.

The Drug Enforcement Administration, Homeland Security Investigations and the Laredo Police Department conducted the investigation. Assistant U.S. Attorneys José Angel Moreno and Steven Chamberlin prosecuted the case.

McALLEN, Texas – A 36-year-old Pharr resident has been sentenced for lying to federal authorities during a drug investigation, announced U.S. Attorney Alamdar S. Hamdani.

Pablo Talavera Jr., former Texas Department of Public Safety (DPS) trooper, pleaded guilty Aug. 28.

U.S. District Judge Micaela Alvarez has now ordered Talavera to serve 18 months in federal prison to be immediately followed by two years of supervised release. At the hearing, the court heard opposing arguments regarding the appropriate sentence. Judge Alvarez imposed a greater sentence due to Talavera’s position as a law enforcement officer when he committed the offense. 

In 2019, law enforcement initiated an investigation targeting an organization responsible for the transportation of multi-kilogram quantities of meth, heroin and cocaine from the Rio Grande Valley to Tennessee. Talavera’s father was the organization’s leader.

The investigation revealed Talavera used his position as a DPS trooper to assist his father by running license plates of vehicles believed to be that of law enforcement. Talavera initially lied to authorities. He ultimately admitted to assisting his father, who is now serving 21 years in federal prison.

Talavera was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.

The FBI and Homeland Security Investigations conducted the Organized Crime Drug Enforcement Task Forces (OCDETF) operation with the assistance of the Texas Rangers. Assistant U.S. Attorney Jesse Salazar prosecuted the case.

OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found on the Department of Justice’s OCDETF webpage.

HOUSTON – A 39-year-old Houston man has been sentenced for producing child pornography of several minor female victims, announced U.S. Attorney Alamdar S. Hamdani.

Nam Vu Bui pleaded guilty Aug. 21.

Chief U.S. District Judge Lee H. Rosenthal has now sentenced Bui to 330 months in prison. At the hearing, the court heard from two of the victims, after which they were recognized for their bravery in recounting the events and the trauma it caused and continues to cause them. Bui was further ordered to pay $19,680 in restitution to the victims and will serve 10 years on supervised release following completion of his prison term. During that time, he will have to comply with numerous requirements designed to restrict his access to children and the internet. Bui will also be required to register as a sex offender. In handing down the prison terms, Judge Rosenthal stated that what he did was evil, further noting that child sexual assaults, like those he committed, should be called what they are, rape. 

“The bravery shown by the victims in this case is to be commended,” said Hamdani. “They spoke up against evil, rose above the years of abuse perpetrated on them and have given true meaning to the word survivor. It is my hope that more victims, hearing about these brave young women, will speak out against their abusers. It is the first step in bringing these child sexual predators to justice.”

Bui first came to the attention of law enforcement in Vermont for pretending to be a medical student conducting cancer research. As part of that “research,” he convinced his girlfriend’s friends to allow him to perform gynecological exams on them in their dorm rooms. One of the victims got suspicious when he asked her to wear a blindfold. She peeked under it and realized he was trying to record what he was doing without her consent.

The ensuing investigation revealed Bui was from Houston and had infiltrated his girlfriend’s family and other Vietnamese immigrants as a tutor for their female minor children. During the tutoring sessions, he sexually molested the minor victims and recorded them doing acts such as performing oral sex on him. Bui also deceived the victims and caused them to create child pornography of themselves for him. He created email accounts pretending to be attorneys at fictitious law firms, friends of the victims and working as a vigilante combatting a child pornography ring supposedly made up of law enforcement officers.

Authorities later conducted a search at the residence he shared with his mother in Houston. Forensic analysis of the seized items in the home revealed Bui produced images of three minor victims and others.

He has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

Houston Police Department conducted the investigation with the assistance of the Vermont Internet Crimes Against Children Task Force, Middlebury College Department of Public Safety and Vermont FBI.

Assistant U.S. Attorney Sherri L. Zack is prosecuting the case, which was brought as part of Project Safe Childhood (PSC), a nationwide initiative the Department of Justice (DOJ) launched in May 2006 to combat the growing epidemic of child sexual exploitation and abuse. U.S. Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section leads PSC, which marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children and identifies and rescues victims. For more information about PSC, please visit DOJ’s PSC page. For more information about internet safety education, please visit the resources link on that page.

HOUSTON – A 40-year-old Mexican citizen has been sentenced for international drug trafficking and money laundering conspiracy, operating on behalf of the Gulf Cartel in Mexico, announced U.S. Attorney Alamdar S. Hamdani.

Ezequiel Alanis Espitia pleaded guilty May 17.

Chief U.S. District Judge Randy Crane has now ordered Espitia to serve 324 months in federal prison to be immediately followed by five years of supervised release. At the hearing, the court noted the ongoing drug trafficking and money laundering conspiracies spanned over the course of eight years. The conspiracy involved 39 kilograms of cocaine, six kilograms of fentanyl, two and a half kilograms of heroin and more than 1,000 kilograms of marijuana. During the investigation, law enforcement seized $610,400 in drug proceeds. The court also heard Espitia was a leader of the criminal activity, maintained stash houses for the purpose of distributing drugs and was directly involved in the importation of controlled substances from Mexico into the United States.

“The Cartel del Golfo, aka the Gulf Cartel, is a brutal and violent Mexican drug trafficking organization that relies on money launderers and drug distributors, like Espitia, to wash its ill-gotten gains and infect local communities with drugs,” said Hamdani. “This substantial sentence serves as a warning to those who help launder monies and deliver dangerous drugs, such as fentanyl, that destroy our neighborhoods and kill our kids.” 

Espitia’s associates, including his brother, Ramiro Alanis Espitia, 44, Mexico, was also sentenced for his role in the conspiracies and received 60 months in prison to be immediately followed by four years supervised release. Espitia’s wife, Brenda Natalie Alanis Duran, 39, Houston, and his sister, Maria Isabel Lara Alanis, 55, Mexico, were also convicted and will be sentenced on Dec. 13 and Jan. 17, 2024, respectively.

To date, a total of 16 have been convicted for their roles in the conspiracies and have received sentences between 12 and 81 months.

Espitia will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

Homeland Security Investigations conducted the investigation along with the Drug Enforcement Administration, IRS-Criminal Investigation and the Houston Police Department.

This Operation, dubbed “Walking Eagle,” is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) Strike Force Initiative, which provides for the establishment of permanent multi-agency task force teams that work side-by-side in the same location. This co-located model enables agents from different agencies to collaborate on intelligence-driven, multi-jurisdictional operations to disrupt and dismantle the most significant drug traffickers, money launderers, gangs and transnational criminal organizations.

The specific mission of the Houston Strike Force is to disrupt and dismantle the drug trafficking organizations that designated Consolidated Priority Organization or Regional Priority Organization Targets head with their affiliates and that impact Houston and south Texas.

Assistant U.S. Attorneys Casey N. MacDonald and Anibal J. Alaniz prosecuted the case.

HOUSTON – A 51-year-old man has been sentenced following his convictions for committing two armed robberies in 2019, announced U.S. Attorney Alamdar S. Hamdani.

A federal jury deliberated for approximately two hours after a three-day trial before convicting Hezron Benjamin Stuart, March 15 on two counts of interference with commerce by robbery and two counts of discharging a firearm during a crime of violence.

U.S. District Judge Lee Rosenthal has now handed Stuart a 128-month term of imprisonment for the robberies. He also received 120 months for each firearms charge which must be served consecutively to the other sentence imposed. The total 368-month prison term will be immediately followed by five years of supervised release. At the hearing, the court heard additional evidence about Stuart’s lengthy and violent criminal history, as well as three additional armed robberies he committed in 2019.

“Bank robbery is not a victimless crime,” said Hamdani. “Mr. Stuart spent his entire life committing violent crimes in our city. In multiple armed robberies he shot a gun and seriously injured a store clerk. This sentence will ensure the citizens of Houston are protected from his brazen criminal conduct in the future.” 

The jury heard evidence that on May 18, 2019, Stuart robbed the Corner Food Mart located on Mangum Street and discharged his firearm. 

On May 23, 2019, Stuart robbed a Citgo Gas Station located at South Loop East. The store clerk refused to give up the cash and was ultimately shot. 

At trial, the jury heard from witnesses in both cases, including the surviving shooting victim. The victim identified Stuart as the person who robbed and shot at them. 

In addition, an examiner compared Stuart’s fingerprints to those left at the Citgo gas station robbery and ultimately determined them to be the same.

Stuart represented himself during the trial and claimed he was not the individual who committed the robberies. The jury did not believe those claims and found him guilty as charged.

Stuart has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the FBI conducted the investigation as part of the ATF Houston Crime Gun Strike Force with the assistance of the Houston Police Department (HPD) and the Houston Forensic Science Center. Assistant U.S. Attorneys Carolyn Ferko and Britni Cooper prosecuted the case. 

The ATF Houston Crime Gun Strike Force was created as a joint effort between the ATF And HPD to combat the growing trend in crimes involving firearms.

HOUSTON – A medical clinic office manager has been sentenced for operating a pill mill clinic that unlawfully distributed over 600,000 opioid pills, announced U.S. Attorney Alamdar S. Hamdani.

A federal jury convicted Andres Martinez, Jr., 30, and Dr. Oscar Lightner, 74, both of Laredo, April 11 for unlawfully distributing and dispensing controlled substances and conspiracy.

Chief U.S. District Judge Lee H. Rosenthal has now ordered Martinez to serve 84 months in federal prison to be immediately followed by three years of supervised release.

At the trial, the jury heard evidence that Lightner and Martinez operated Jomori Health and Wellness (Jomori), a purported Houston pain management clinic, as a pill mill. Lightner, owner of and physician at Jomori, unlawfully prescribed dangerous combinations of controlled substances — including hydrocodone, carisoprodol and alprazolam — to his patients without a legitimate medical purpose in exchange for cash payments ranging from $250 to $500.

Martinez, Lightner’s stepson, coordinated with crew leaders to bring multiple people, including individuals living in homeless shelters, into Jomori to pose as patients to obtain prescriptions for opioids and other controlled substances.

Jomori received more than $1.2 million in cash over 14 months through the scheme that resulted in the unlawful distribution and dispensing of more than 600,000 opioids and other controlled substances.

Lightner was previously sentenced to seven years in federal prison for his role.

Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division and Special Agent in Charge Daniel C. Comeaux of the Drug Enforcement Administration (DEA) Houston Division made the announcement as well.

The DEA conducted the investigation.

Trial Attorneys Monica Cooper and Andrew Tamayo of the Criminal Division’s Fraud Section prosecuted the case.

The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,400 defendants who collectively have billed federal health care programs and private insurers more than $27 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Office of the Inspector General for the Department of Health and Human Services, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.

A medical clinic office manager was sentenced today to seven years in prison for operating a pill mill clinic that unlawfully distributed over 600,000 opioid pills in exchange for cash.

According to court documents and evidence presented at trial, Andres Martinez Jr., 30, of Laredo, Texas, was the office manager of Jomori Health and Wellness (Jomori), a purported Houston pain management clinic. Martinez operated Jomori with Dr. Oscar Lightner, 74, also of Laredo, as a pill mill. Lightner, who was the owner of and physician at Jomori, unlawfully prescribed dangerous combinations of controlled substances — including of hydrocodone, carisoprodol, and alprazolam — to his patients without a legitimate medical purpose in exchange for cash payments ranging from $250 to $500. Martinez, who is Lightner’s stepson, coordinated with crew leaders to bring multiple people, including individuals living in homeless shelters, into Jomori to pose as patients to obtain prescriptions for opioids and other controlled substances. Jomori received over $1.2 million in cash over 14 months through its scheme that resulted in the unlawful distribution and dispensing of over 600,000 opioids and other controlled substances.

On April 11, Martinez and Lightner were convicted of unlawfully distributing and dispensing controlled substances and conspiracy. On Nov. 30, Lightner was sentenced to seven years in prison.

Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Alamdar S. Hamdani for the Southern District of Texas, and Special Agent in Charge Daniel C. Comeaux of the Drug Enforcement Administration (DEA) Houston Division made the announcement.

The DEA investigated the case.

Trial Attorneys Monica Cooper and Andrew Tamayo of the Criminal Division’s Fraud Section prosecuted the case.

The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,400 defendants who collectively have billed federal health care programs and private insurers more than $27 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Office of the Inspector General for the Department of Health and Human Services, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.

GALVESTON, Texas – A 40-year-old man has been ordered to federal prison for production and possession of child pornography, announced U.S. Attorney Alamdar S. Hamdani.

Sean Michael Kriss pleaded guilty June 1, 2022, to one count of sexual exploitation of a child and one count of possession of child pornography.

U.S. District Judge Jeffrey Brown has now sentenced Kriss to 360 and 120 months for the production and possession convictions, respectively. They will run consecutively for a total 480-month term of imprisonment. At the hearing, the court also heard additional information including a letter from the victim’s mother detailing how Kriss’ actions destroyed their family and has caused them a lot of stress and anxiety. She further detailed how his betrayal took away their sense of security. In handing down the prison terms, the court noted that Kriss committed these acts against the victim who was at a vulnerable age. Kriss was further ordered to serve 10 years on supervised release following completion of his prison term. During that time, he will have to comply with numerous requirements designed to restrict his access to children and the internet. Kriss will also be ordered to register as a sex offender.

“Individuals, like Kriss, who produce child pornography and share it with perverted like-minded individuals need to be stopped,” said Hamdani. This sentence will help to do that. The exploitation of children has no place in our community and my office will vigorously pursue prosecution of anyone involved in the production and distribution of child pornography to the fullest extent of the law.”

The investigation revealed Kriss had shared a video via Snapchat he created of a minor female from his cellphone.

Law enforcement obtained a search warrant for his residence and seized his electronic devices. Forensic examination on those items resulted in the discovery of child pornography videos and images depicting the minor victim. 

In total, law enforcement found 408 images and two videos of child pornography Kriss had in his collection. 

He will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

Pearland Police Department and Homeland Security Investigations conducted the investigation.

Assistant U.S. Attorneys Sherin Daniel and Kimberly Leo prosecuted the case, which was brought as part of Project Safe Childhood (PSC), a nationwide initiative the Department of Justice (DOJ) launched in May 2006 to combat the growing epidemic of child sexual exploitation and abuse. U.S. Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section leads PSC, which marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children and identifies and rescues victims. For more information about PSC, please visit DOJ’s PSC page. For more information about internet safety education, please visit the resources link on that page.

A Mexican woman who legally resided in Mission, Texas, and her son, who is a U.S. citizen, were sentenced today for sex trafficking a young girl.

Rita Martinez, 65, was sentenced to 360 months in prison, ordered to pay over $840,000 in restitution and surrender her house and bar to the government. Genaro Fuentes, 41, Martinez’s son and co-defendant, was sentenced to 72 months in prison and ordered to pay $20,000 in restitution.

“The Justice Department is committed to identifying and prosecuting parasitic commercial sex traffickers, like the defendants here, who use the promise of America to lure vulnerable women and children into the United States and then coerce them into commercial sex acts,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “We will focus the full force of our legal authority on preventing and punishing human trafficking and seeking restitution for the victims of these heinous crimes.”

“Martinez’s decades-long business model was simple yet evil: travel to Mexico, entice poor, young girls across the border with false promises of a better life and then force those girls to engage in sexual acts with her bar’s male patrons,” said U.S. Attorney Alamdar S. Hamdani for the Southern District of Texas. “Martinez treated the victims like chattel, while physically and psychologically imprisoning them. Today’s sentence ensures the only person left imprisoned, for decades to come, is Martinez and sends a strong message to human traffickers moonlighting as bar owners: you’re next.”

“Today’s sentence will ensure that people like Rita Martinez are no longer able to victimize anyone in vulnerable or desperate circumstances,” said Acting Special Agent in Charge Doug Olson for the FBI San Antonio Division. “We want to thank our partners in the Texas Alcoholic Beverage Commission (TABC) for their continued assistance in bringing predators like this to justice.”

According to court documents, Martinez operated a bar known at various times as Perez Lounge, Rita’s Lounge and Rita’s Sports Bar. From the spring of 2005 to the fall of 2006, the 16-year-old young girl lived with Martinez and worked at the bar. Martinez arranged for the young girl to engage in commercial sex acts with men who were customers at the bar. Martinez also accepted money from these clients before allowing them to take the young girl out of the bar to engage in commercial sex. Martinez applied the money she received from commercial sex buyers to the smuggling debt that she imposed upon the minor victim to transport her from Mexico into the United States.

The FBI San Antonio Field Office, McAllen Resident Agency investigated the case, with the assistance of the Texas Alcoholic Beverage Commission.

Trial Attorney Kate Hill of the Civil Rights Division’s Human Trafficking Prosecution Unit and Assistant U.S. Attorneys Laura Garcia and Sherri Zack for the Southern District of Texas prosecuted the case. 

Anyone who has information about human trafficking should report that information to the National Human Trafficking Hotline toll-free at 1-888-373-7888, which is available 24 hours a day, seven days a week. For more information about human trafficking, please visit www.humantraffickinghotline.org. Information on the Justice Department’s efforts to combat human trafficking can be found at www.justice.gov/humantrafficking.

McALLEN, Texas – A Mexican woman, who legally resided in Mission, and a local Texan have been ordered to federal prison for sex trafficking a young girl, announced U.S. Attorney Alamdar S. Hamdani.

Rita Martinez, 65, pleaded guilty June 30. Her son - Genaro Fuentes, 41, entered his plea Jan. 26 and admitted his role working at the bar and helping to facilitate the commercial sex.

Chief U.S. District Judge Randy Crane has now imposed a 360-month term of imprisonment for Martinez, while Fuentes was ordered to serve 72 months. Martinez and Fuentes were also ordered to pay $840,000 and $20,000 in restitution to the victims, respectively. In addition, the court forfeited the bar and the home of Martinez. At the hearing, the court heard additional testimony from eight victims, including a woman who was only 12 years old when Martinez brought her from Mexico and started trafficking her as a sex worker in her cantina. Prior to handing down the prison terms, Chief Judge Crane noted some people just have evil in their hearts.

“Martinez’s decades-long business model was simple yet evil: travel to Mexico, entice poor, young girls across the border with false promises of a better life and then force those girls to engage in sexual acts with her bar’s male patrons,” said Hamdani. “Martinez treated the victims like chattel, while physically and psychologically imprisoning them. Today’s sentence ensures the only person left imprisoned, for decades to come, is Martinez and sends a strong message to human traffickers moonlighting as bar owners: you’re next."

“Human trafficking cannot be tolerated, especially those who exploit many victims and use the promise of America to lure vulnerable women and children into the United States, only to coerce them into commercial sex acts,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Justice Department remains committed to identifying and prosecuting human trafficking cases, and seeking restitution for the victims who survived these heinous crimes.”

“Today’s sentence will ensure that people like Rita Martinez are no longer able to victimize anyone in vulnerable or desperate circumstances,” said Acting Special Agent in Charge Doug Olson for the FBI San Antonio Division. “We want to thank our partners in the Texas Alcoholic Beverage Commission (TABC) for their continued assistance in bringing predators like this to justice.”

For decades, Martinez smuggled unwitting women and girls from Mexico into the United States and compelled them to engage in commercial sex work in a cantina she owned and operated in Mission known as Perez Lounge, Rita’s Lounge and Rita’s Sports Bar.

Martinez arranged for the young women and girls to engage in commercial sex acts with men who were patrons at the bar. She accepted money from these clients before allowing them to take them out of the bar to engage in the commercial sex. Martinez claimed she applied the money she received from the commercial sex to the smuggling debt she imposed upon the victims for their illegal transport from Mexico into the United States. In addition to working for Martinez, many victims were forced to reside in Martinez’s home.  

Martinez and Fuentes will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

The FBI led the investigation with assistance from the TABC. Assistant U.S. Attorneys Laura Garcia and Sherri Zack prosecuted the case along with Trial Attorney Kate Hill of the Civil Rights Division’s Human Trafficking Prosecution Unit.

Anyone who has information about human trafficking should report that information to the National Human Trafficking Hotline toll-free at 1-888-373-7888, which is available 24 hours a day, seven days a week. For more information about human trafficking, please visit www.humantraffickinghotline.org. Information on the Justice Department’s efforts to combat human trafficking can be found at www.justice.gov/humantrafficking.

HOUSTON – A 31-year-old local man has pleaded guilty to conspiracy to commit money laundering, announced U.S. Attorney Alamdar S. Hamdani.

From July 2018 to November 2018, Baudelaire Tchouala laundered money into several bank accounts and withdrew the money to send to others. He used a business account to conceal the fraudulent activity.

Victims believed they paid for goods and services from legitimate individuals and companies but were tricked into sending the money to Tchouala’s accounts. On July 23, 2018, a victim wired $64,000 from their bank account to Tchouala’s account based on instructions they received via email. The victim sent the money, believing it was for the purchase of a house.

On Oct. 29, 2018, another victim directed $198,955 into Tchouala’s account for a down payment on a condominium. The receiving account was just opened Oct. 12, 2018.

In addition, several companies also fell victim to the scheme. One had communicated via email with someone pretending to be from another company. On Oct. 4, 2018, that person sent an email requesting that payment be sent to an updated bank account. Based on that email, the victim company sent approximately $645,711 to Tchouala’s bank account.

The victims reside in various countries including the United States, South Korea and Japan.

Tchouala withdrew most of the money via cash, card purchases, checks and transfers. Tchouala’s fraudulent financial activity totaled approximately $935,000.

U.S. District Judge Alfred H. Bennett accepted the plea and set sentencing for March 7, 2024. At that time, he faces up to 20 years in federal prison and a possible $500,000 maximum fine.

Tchouala was permitted to remain on bond pending sentencing.

FBI conducted the investigation. Assistant U.S. Attorneys Rodolfo Ramirez and Shirin Hakimzadeh is prosecuting the case.

HOUSTON – A Houston area brother and sister have been indicted for submitting fraudulent COVID-19 relief loans, announced U.S. Attorney Alamdar S. Hamdani.

Jonathan Flores, 31, Willis, and Bianca April Flores, 29, Houston, are expected to make their initial appearances before U.S. Magistrate Judge Christina A. Bryan at 2 p.m.

The six-count indictment, returned Nov. 29, alleges both committed one count of conspiracy to commit wire fraud and five counts of wire fraud.

According to the indictment, Jonathan and Bianca Flores conspired to submit nine false and fraudulent Paycheck Protection Program and Economic Injury Disaster Loan applications. They allegedly falsified the number of employees and the average monthly payroll expenses of the applicant businesses.

According to the charges, Jonathan and Bianca Flores fraudulently obtained approximately $1.2 million in COVID-19 relief funds.

If convicted, each face up to five years in federal prison for conspiracy to commit wire fraud, while wire fraud carries a possible sentence of up to 20 years in prison.

FBI conducted the investigation. Assistant U.S. Attorney Justin R. Martin is prosecuting the case.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.

CORPUS CHRISTI, Texas – A 35-year-old man has been sentenced following his conviction for possession with intent to distribute a substance containing a detectable amount of cocaine, announced U.S. Attorney Alamdar S. Hamdani.

Branden Lee Narvaiz pleaded guilty Sept. 13.

U.S. District Judge David S. Morales has now ordered Narvaiz to serve 60 months in federal prison to be immediately followed by four years of supervised release. At the hearing, the court heard additional evidence that at the time of the offense, Narvaiz was on state parole for the same crime.

On April 11, law enforcement stopped Narvaiz for driving on the wrong side of the road. Authorities conducted a search of his vehicle and located cash, cocaine, scales and baggies.

Following the return of a federal indictment, authorities arrested him June 14. At that time, they again found cocaine, money and plastic bags.

As part of his plea, Narvaiz admitted he possessed 500 grams or more of a mixture or substance containing a detectable amount of cocaine.

Narvaiz will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

Homeland Security Investigations, Texas Department of Public Safety, Duval County Sheriff’s Department and Starr County High Intensity Drug Trafficking Area task force conducted the investigation. Assistant U.S. Attorney Liesel Roscher prosecuted the case.

CORPUS CHRISTI – A 44-year-old Corpus Christi resident has been sentenced for possessing a firearm as a convicted felon, announced U.S. Attorney Alamdar S. Hamdani.

Jason Jaime Merdes pleaded guilty Aug. 24.

U.S. District Judge Nelva Gonzales Ramos has now ordered Merdes to serve 120 months in federal prison to be immediately followed by three years of supervised release. In handing down the sentence, the court heard that not only did Merdes possess a firearm, but he also used the gun in a drive-by shooting the day prior to his arrest. Two victims of the shooting provided testimony to the court, both describing how the shooting has affected their lives and how close the shots were to the rooms where their children were sleeping.

On May 15, a homeowner woke up to the sound of gunshots outside his residence at approximately 3 a.m. and alerted authorities. Upon investigation, law enforcement discovered shell casings in the street and multiple bullet holes in the home and garage.

The homeowner named Merdes as a possible suspect. The resident had previously hired Merdes to complete a home repair and sent legal notice to him after the job was not completed.

Neighborhood cameras showed footage of a suspect vehicle. Law enforcement observed the same vehicle leaving Merdes’ residence and made a traffic stop. He was wearing a holster on his belt. Authorities also found a gun under his seat.

A search of his residence revealed nine additional firearms. Of the ten firearms possessed by Merdes, one matched the shell casings found at the scene of the shooting, and two others were consistent with bullet fragments recovered. 

As a convicted felon, Merdes is prohibited from possessing firearms or ammunition per federal law.

Merdes will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

FBI and Corpus Christi Police conducted the investigation. Assistant U.S. Attorney Ashley Martin prosecuted the case.

HOUSTON – A 28-year-old Houston resident has been sentenced to federal prison for illegally possessing two firearms while a felon and possession with intent to distribute cocaine, announced U.S. Attorney Alamdar S. Hamdani.

Sidney Rachal pleaded guilty July 6.

U.S. District Judge Hittner has now ordered Rachal to serve 105 months in federal prison to be immediately followed by three years of supervised release. Additionally, he agreed to forfeit the two firearms and magazines. At the hearing, the court heard that Rachal also possessed several other illegal substances, such as marijuana, alprazolam and other pills along with the material to distribute them. In handing down the sentence, Judge Hittner noted his criminal history.

On Jan. 21, 2022, authorities found Rachal’s motor vehicle stopped in the middle of the road. They took him into custody for driving while intoxicated and for an outstanding felony warrant. 

Upon his arrest, a search of his person revealed two plastic bags weighing approximately 68 grams that contained cocaine as well as $22,905 in cash. Subsequently, a search of his vehicle also resulted in the discovery of two magazines and two firearms, one of which - a Glock Model 26 pistol - was loaded. 

The investigation revealed Rachal had been previously convicted of aggravated robbery. As such, he is prohibited from possession firearms or ammunition per federal law.  

Rachal will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

The Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant U.S. Attorney Rodolfo Ramirez prosecuted the case.

CORPUS CHRISTI, Texas – A 43-year-old Florida man has been ordered to federal prison following his conviction for transporting undocumented aliens, announced U.S. Attorney Alamdar S. Hamdani.

Joan Rincon pleaded guilty July 27.

U.S. District Judge David S. Morales has now ordered Rincon to serve 25 months in federal prison to be immediately followed by two years of supervised release. At the hearing, the court heard how Rincon had transported aliens in a grain hauler, including an unaccompanied minor. In handing down the sentence, the court remarked on the severity of the conduct and noted that the 15 aliens who had been transported in the grain hauler “deserved better.”

On May 7, Rincon approached the primary inspection lane at the U.S. Border Patrol (BP) checkpoint near Sarita. A K-9 soon alerted to the grain hauler he was driving.

Upon further inspection, authorities discovered 15 undocumented aliens inside the hauler as well as an additional five in the cabin. One individual described how hot it was inside the grain hauler. She claimed they were not allowed to take water, were all sweating profusely and were afraid they would pass out due to the heat.

Rincon was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.

BP and Homeland Security Investigations conducted the investigation. Assistant U.S. Attorney Tyler Foster prosecuted the case.

HOUSTON – Five local men have been taken into federal custody on charges they conspired in a large-scale mail theft and credit card fraud scheme resulting in more than $1.2 million in losses, announced U.S. Attorney Alamdar S. Hamdani.

Authorities arrested Daniel Rios Sanchez, 35, and Omokehinde Muyiwa Oyegoke-Tewogbade, 62, both of Houston today. They are expected to make initial appearances before U.S. Magistrate Judge Christina Bryan at 2 p.m. Also charged and previously arrested were Dennis Christopher McGee, 41, Bradley Kane Zarco, 37, and Travis Castaneda Qawasmeh, 26, all also of Houston.

According to the indictment returned Oct. 4, all five obtained stolen U.S. mail containing new credit cards and bank statements for intended account holders. They allegedly called financial institutions to activate the stolen credit cards, increase credit limits and change information. The stolen credit cards were used to purchase goods, services, gift cards, cash and merchandise at retail stores, according to the charges.

Over a six-month period, they allegedly fraudulently activated at least 210 stolen credit cards and caused approximately $1,230,542.92 in losses.

All are charged with one count of conspiracy which carries a possible five-year prison term. If convicted of bank fraud, they could be sentenced to up to 30 years in prison, while a conviction of receipt of stolen mail carries a potential five years. All are also charged with aggravated identity theft which carries a mandatory two years in prison which must be served consecutively to any other prison term imposed. The charges also have potential fines of up to $1 million.  

U.S. Postal Inspection Service conducted the investigation. Assistant U.S. Attorney Karen Lansden is prosecuting the case.

An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.

LAREDO, Texas – A 35-year-old Customs and Border Protection (CBP) officer working at the Port of Entry in Laredo has been arrested, announced U.S. Attorney Alamdar S. Hamdani.

Emanuel Celedon is set to make his initial appearance before U.S. Magistrate Judge Christopher dos Santos at 9:40 a.m.

The indictment, returned Nov. 28, charges him with two counts of bribery and witnesses and two counts of attempted importation of cocaine.

The charges allege that from Oct. 1-17, Celedon accepted U.S. currency in exchange for allowing an individual to transport a substance he believed to be several kilograms of cocaine into the United States from Mexico through the Laredo Port of Entry without inspection. Celedon allegedly accepted another bribe for the same conduct from on or about Oct. 23-30.  

If convicted, Celedon faces up to 15 years in prison as well as a possible $250,000 maximum fine for the bribery allegations, while the attempted importation of cocaine charges carry a mandatory minimum of five and up to 40 years in prison and up to a $5 million fine.  

Department of Homeland Security - Office of Inspector General in conjunction with the Drug Enforcement Administration and CBP - Office of Professional Responsibility conducted the investigation. Assistant U.S. Attorneys Richard W. Bennett and Jennifer Day are prosecuting the case.

An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.

HOUSTON – A 33-year-old man who illegally resided in Houston has been ordered to federal prison for interstate travel with intent to engage in a sex act with a minor, announced U.S. Attorney Alamdar S. Hamdani.

Wilmer Rivera-Hernandez pleaded guilty Aug. 24.

U.S. District Judge George C. Hanks Jr. has now sentenced Rivera-Hernandez to 600 months in federal prison. At the hearing, the court heard additional information including a statement from the victim describing her transformation from a young, innocent girl into someone who feels anger, pain, guilt, numbness, depression and humiliation. In handing down the prison terms, the court noted how what Rivera-Hernandez did was reprehensible, and he could not be allowed to walk among civilized people. He was further ordered to serve the rest of his life on supervised release following completion of his prison term. During that time, he will have to comply with numerous requirements designed to restrict his access to children and the internet. Rivera-Hernandez will also be ordered to register as a sex offender.

“Words cannot describe the damage Rivera-Hernandez did after he kidnapped and raped a 15-year-old child,” said Hamdani. “His loathsome and abhorrent actions deserve the stiffest punishment. As the father of a 15-year-old girl myself, I am thankful every day for local, state and federal law enforcement. And in this case for the coordinated efforts of the brave men and women of Montgomery County, Texas, and Knox County, Tennessee, who were able to save a child from a monster’s grasp.”

In June 2020, Rivera-Hernandez took a 15-year-old girl on what was supposed to be a date, but it quickly turned into a nightmare. After she realized he was just driving around, she asked him to take her home. He refused. Instead, he grabbed this young girl by the head, strangled her, threatened both her and her family’s safety, seized her phone and then forced her to drink alcohol and take medicine to make her drowsy and unable to resist him. He then drove her from Houston to Little Rock, Arkansas, where he took her to a motel and raped her.  The next day, he began driving her through Arkansas and into Tennessee.

However, the victim was able to get access to a phone and contact her family members, telling them he could kill her and to call the police. They contacted law enforcement who, using geolocation on the phone, was eventually able to locate Rivera-Hernandez and the victim parked at a truck stop in Knoxville, Tennessee.

After his indictment and arrest, Rivera-Hernandez also engaged in a scheme to obstruct justice from prison. He arranged the creation and delivery of fabricated WhatsApp messages purporting to be from the minor victim. In these manufactured messages, Rivera-Hernandez made it appear as if the minor had recanted her claims of kidnapping and rape and that she was always in love with him. By having these messages delivered to the prosecution, Rivera-Hernandez hoped it would lead to the dismissal of his charges. A thorough investigation, however, quickly revealed the messages were fake and that Rivera-Hernandez attempted to obstruct justice.

He will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the future.

Department of State’s Diplomatic Security Service conducted the investigation with assistance from Homeland Security Investigations. Sheriff’s Offices in Montgomery County, Texas, and Knox County, Tennessee, assisted with the victim’s rescue. Assistant U.S. Attorneys Sharad Khandelwal and Stephanie Bauman prosecuted the case.

HOUSTON – A 56-year-old business owner has been ordered to federal prison following his conviction of conspiring to commit mail fraud, announced U.S. Attorney Alamdar S. Hamdani.

Sudhakar Kalaga pleaded guilty March 6.

U.S. District Judge U.S. District Judge Lee Rosenthal has now ordered him to serve 24 months in federal prison to be immediately followed by one year of supervised release. He was also ordered to pay restitution of $10,406,219 although the court noted that the restitution had already been paid. At the hearing, the court heard additional testimony from a representative of the victim company that described the losses the company incurred and how it had caused employees at the company to lose their jobs. In handing down the sentence, the court stated that while Kalaga was very active in his community, he had taken an oath when he became a U.S. citizen to defend the Constitution and the laws of the United States and was a coward for going along with the fraud.

At the time of his plea, Kalaga admitted that from 2010 to 2019, he engaged in a bribery and bid rigging fraud scheme to secure construction and maintenance work contracts from a company with a manufacturing facility in Houston.

Kalaga admitted he submitted fake bids from non-existent construction companies to the victim company’s facilities manager. This was designed to make it appear his companies’ bids were the lowest. In return, Kalaga paid the facilities manager millions of dollars in kickbacks. Kalaga failed to disclose he was submitting falsified bids and paying kickbacks from the victim company’s own funds.

The victim company would not have paid Kalaga’s companies’ invoices had it known about the falsified bids or the kickback payments.        

Kalaga was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.

The FBI conducted the investigation. Assistant U.S. Attorney Belinda Beek prosecuted the case.

McALLEN, Texas – A 31-year-old Mission resident has been sent to federal prison for coercion and enticement of a minor, announced U.S. Attorney Alamdar S. Hamdani.

Edgar Aaron Hernandez pleaded guilty March 31.

U.S. District Judge Randy Crane has now sentenced Hernandez to 120 months in prison. The court also heard additional information today including that Hernandez admitted to requesting nude images from numerous minor victims via Snapchat and would engage in this conduct while at work. Hernandez also possessed over 1,000 additional images and videos of child pornography across various platforms. The Court also heard from victim impact statements detailing the lifelong effects of fear and shame victims of coercion feel. Hernandez was further ordered to pay $3,000 in restitution to a known victim and will serve 7 years of his life on supervised release following completion of his prison term. During that time, he will have to comply with numerous requirements designed to restrict his access to children and the internet. Hernandez will also be ordered to register as a sex offender.

“We leave our children with teachers on a daily basis because we trust them,” said Hamdani. “Hernandez breached that trust when he used his experience with children to abuse and exploit them. He extorted our most vulnerable to get what he wanted with no regard for their well-being or how his actions would affect them. But, thankfully, with this sentence, justice has forced this predator to exchange one piece of clothing for another; a teacher’s cape for an orange prison jumpsuit.” 

“With the ever-increasing access criminals have to communication platforms, Homeland Security Investigation (HSI) must stay a step ahead of those who utilize the technology to exploit victims. The defendant in this case will serve the next 10 years in prison for his unfathomable acts,” said Special Agent in Charge Craig Larrabee, HSI San Antonio. “This sentencing sends a powerful message to those who would prey on the innocent and serves as a reminder that HSI will unceasingly pursue child predators.”

“Today’s sentencing is a reminder that the Secret Service is committed to investigating electronic crimes involving child exploitation,” said Resident Agent in Charge Brian Gibson, U.S. Secret Service - McAllen Resident Office. “The success in this case demonstrates the investigative capabilities of the Secret Service and the collaborative efforts with our law enforcement partners.  Together we will continue pursing these bad actors and protect the nation’s most vulnerable population.” 

Between April 1-4, 2022, a 13-year-old minor child reported she sent nude images via SnapChat to a man in Texas named Edgar. He claimed to be 17-years-old and threatened to disseminate them if she did not send him additional nude images.

Law enforcement identified the IP address and traced it to a residence associated with Hernandez in Mission.

On Dec. 5, 2022, authorities contacted Hernandez at Mission High School where he was employed as a substitute teacher. He admitted he believed the minor to be 13, soliciting sexually explicit images and videos via SnapChat and threatening the victim when she refused to send additional images and videos.

Hernandez further admitted to soliciting nude images and videos over the last two years from other minor children. If they refused, he threatened to expose them to their family and friends. Some of the minors told Hernandez they would commit suicide or harm themselves if he exposed them. Hernandez admitted that this did not bother him and would block the victim before seeking additional victims to coerce images from.

Law enforcement discovered approximately 1,000 videos and images of child exploitation materials on his Dropbox, Mega, and SnapChat accounts.

Hernandez will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

U.S. Secret Service conducted the investigation with assistance from the Springfield, Illinois, Police Department and Homeland Security Investigations – Rio Grande Valley Child Exploitation Investigations Task force.

Assistant U.S. Attorneys Alexa D. Parcell and Cahal McColgan prosecuted the case, which was brought as part of Project Safe Childhood (PSC), a nationwide initiative the Department of Justice (DOJ) launched in May 2006 to combat the growing epidemic of child sexual exploitation and abuse. U.S. Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section leads PSC, which marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children and identifies and rescues victims. For more information about PSC, please visit DOJ’s PSC page. For more information about internet safety education, please visit the resources link on that page.

HOUSTON – A Texas doctor has been sentenced to seven years in prison for operating a pill mill clinic that unlawfully prescribed over 600,000 opioid pills in exchange for cash, announced U.S. Attorney Alamdar S. Hamdani.

A federal jury convicted Dr. Oscar Lightner, 73, Laredo, April 11 of unlawfully distributing and dispensing controlled substances and conspiracy.

According to court documents and evidence presented at trial, Lightner and Andres Martinez Jr., 29, Laredo, operated Jomori Health and Wellness (Jomori), a purported Houston pain management clinic, as a pill mill. Lightner, who was the owner of and physician at Jomori, unlawfully prescribed dangerous combinations of controlled substances — including of hydrocodone, carisoprodol and alprazolam — to his patients without a legitimate medical purpose in exchange for cash payments ranging from $250 to $500.

Martinez, who was Jomori’s office manager and Lightner’s stepson, coordinated with crew leaders to bring multiple people, including individuals living in homeless shelters, into Jomori to pose as patients to obtain prescriptions for opioids and other controlled substances. Jomori received over $1.2 million in cash over 14 months through its scheme that resulted in the unlawful distribution and dispensing of more than 600,000 opioids and other controlled substances.

Martinez is set for sentencing Dec. 12

Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division and Special Agent in Charge Daniel C. Comeaux of the Drug Enforcement Administration (DEA) Houston Division made the announcement as well.

The DEA conducted the investigation.

Trial Attorneys Monica Cooper and Andrew Tamayo of the Criminal Division’s Fraud Section prosecuted the case.

The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,400 defendants who collectively have billed federal health care programs and private insurers more than $27 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Office of the Inspector General for the Department of Health and Human Services, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.

A Texas doctor was sentenced today to seven years in prison for operating a pill mill clinic that unlawfully prescribed over 600,000 opioid pills in exchange for cash.

According to court documents and evidence presented at trial, Dr. Oscar Lightner, 73, and Andres Martinez Jr., 29, both of Laredo, operated Jomori Health and Wellness (Jomori), a purported Houston pain management clinic, as a pill mill. Lightner, who was the owner of and physician at Jomori, unlawfully prescribed dangerous combinations of controlled substances — including of hydrocodone, carisoprodol, and alprazolam — to his patients without a legitimate medical purpose in exchange for cash payments ranging from $250 to $500. Martinez, who was Jomori’s office manager and Lightner’s stepson, coordinated with crew leaders to bring multiple people, including individuals living in homeless shelters, into Jomori to pose as patients to obtain prescriptions for opioids and other controlled substances. Jomori received over $1.2 million in cash over 14 months through its scheme that resulted in the unlawful distribution and dispensing of over 600,000 opioids and other controlled substances.

On April 11, Lightner and Martinez were convicted of unlawfully distributing and dispensing controlled substances and conspiracy. Martinez is scheduled to be sentenced on Dec. 12.

Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Alamdar S. Hamdani for the Southern District of Texas, and Special Agent in Charge Daniel C. Comeaux of the Drug Enforcement Administration (DEA) Houston Division made the announcement.

The DEA investigated the case.

Trial Attorneys Monica Cooper and Andrew Tamayo of the Criminal Division’s Fraud Section prosecuted the case.

The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,400 defendants who collectively have billed federal health care programs and private insurers more than $27 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Office of the Inspector General for the Department of Health and Human Services, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.

LAREDO, Texas – A 39-year-old man has been sentenced for possessing with the intent to distribute fentanyl, announced U.S. Attorney Alamdar S. Hamdani.

Jose Pedro Garcia pleaded guilty Aug. 8.

U.S. District Judge Marina Garcia Marmolejo has now ordered Garcia to serve 286 months in federal prison to be immediately followed by five years of supervised release. In handing down the sentence, the court noted that Garcia was selling poison and had been trafficking drugs that have been killing people for a long time. The court also emphasized the harm Garcia had done over the years in selling these drugs.

On May 26, authorities executed a search warrant at Garcia’s residence. At that time, they found multiple small plastic baggies, each containing various types of suspected narcotics. Authorities seized, separated, weighed and ultimately identified them as heroin, meth, cocaine base and fentanyl.

Garcia later admitted to selling drugs for approximately 10 years and started with crack cocaine, then meth, but ultimately moved on to “China White,” because it gave people a stronger high and was more popular. Garcia also color coded the bags to differentiate between the drugs.

“China White” is slang for fentanyl, a Schedule II-controlled substance.

The Drug Enforcement Administration, Homeland Security Investigations, Customs and Border Protection, Border Patrol and the Laredo Police Department Narcotics Division conducted the investigation. Assistant U.S. Attorney Brian Bajew prosecuted the case.

The case was prosecuted as part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. OCDETF is the largest anti-crime task force in the country. OCDETF identifies, disrupts and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found on the Department of Justice’s OCDETF webpage.

More information on the dangers of fentanyl can be found on the DEA’s website. #OnePillCanKill

HOUSTON – A 51-year-old local man has been sentenced following his convictions of possession and distribution of child pornography, announced U.S. Attorney Alamdar S. Hamdani.

Amado Garcia III pleaded guilty June 9.

U.S. District Judge Charles Eskridge has now sentenced Garcia to 96 months for each count of distribution and possession of child pornography, which will run concurrently. He was further ordered to serve 10 years on supervised release following completion of his prison term. During that time, he will have to comply with numerous requirements designed to restrict his access to children and the internet. Garcia will also be ordered to register as a sex offender.

Garcia came to the attention of law enforcement during communications in an online group with participants interested in the sexual abuse of children. In the group, he was found distributing videos of children under the age of 10 being sexually assaulted by adults.

During the investigation, authorities discovered 180 videos and 166 images of child pornography on multiple devices. The images depicted sexual abuse of babies, toddlers and sexual abuse of children involving bondage and sadomasochism.

Garcia was permitted to remain on bond and voluntarily surrender at a later date.

The FBI conducted the investigation.

Assistant U.S. Attorneys Kimberly Ann Leo and Anna Swanson prosecuted this case, which was brought as part of Project Safe Childhood (PSC), a nationwide initiative the Department of Justice (DOJ) launched in May 2006 to combat the growing epidemic of child sexual exploitation and abuse. U.S. Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section leads PSC, which marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children and identifies and rescues victims. For more information about PSC, please visit DOJ’s PSC page. For more information about internet safety education, please visit the resources link on that page.

McALLEN, Texas - A former Weslaco city commissioner has been sentenced 30 months for his role in a bribery conspiracy that involved city contracts worth tens of millions of dollars, announced U.S. Attorney Alamdar S. Hamdani.

According to court documents and evidence presented at trial, Gerardo Tafolla, 57, along with former Weslaco City commissioner John F. Cuellar, accepted bribes from Arturo C. Cuellar Jr., Ricardo Quintanilla and others in exchange for official action favorable to engineering companies seeking large contracts with the city.

From approximately March 2008 through December 2015, one of the participants in the scheme received approximately $4.1 million from two engineering companies and shared nearly $1.4 million with Arturo Cuellar, a former Hidalgo County commissioner. Arturo Cuellar then used a company he controlled to facilitate the payment of approximately $405,000 in bribes to his cousin, John Cuellar, which were disguised as legitimate legal expenses. In exchange for these payments, John Cuellar took several official actions to benefit the companies, including helping to award contracts worth approximately $38.5 million to rehabilitate Weslaco’s water treatment facilities. Quintanilla received approximately $85,000 during the course of the scheme and used that money to pay cash bribes to Tafolla for his official actions to benefit the companies that received the water treatment plant contracts.

In October 2022, a jury convicted Arturo Cuellar and Quintanilla for their roles in the bribery conspiracy. Arturo Cuellar was later sentenced to 20 years in prison and Quintanilla was sentenced to 16 years and eight months in prison. John Cuellar was sentenced to three years in prison after previously pleading guilty in August 2019. Tafolla pleaded guilty in April 2019 to federal program bribery.

Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division and Special Agent in Charge Ramsey E. Covington of the IRS Criminal Investigation Houston Field Office made the announcement as well.

The FBI San Antonio Field Office and IRS-CI Houston Field Office investigated the case.

Assistant U.S. Attorney Roberto Lopez Jr. prosecuted the case along with Trial Attorney William J. Gullotta and Acting Deputy Chief Marco A. Palmieri of the Criminal Division’s Public Integrity Section (PIN). Trial Attorney Peter M. Nothstein and former PIN Trial Attorneys Erica O’Brien Waymack and Jessica C. Harvey provided valuable assistance.

A former Weslaco, Texas, city commissioner was sentenced today to two years and six months in prison for his role in a bribery conspiracy that involved city contracts worth tens of millions of dollars.

According to court documents and evidence presented at trial, Gerardo Tafolla, 57, along with former Weslaco City commissioner John F. Cuellar, accepted bribes from Arturo C. Cuellar Jr., Ricardo Quintanilla, and others in exchange for official action favorable to engineering companies seeking large contracts with the city. From approximately March 2008 through December 2015, one of the participants in the scheme received approximately $4.1 million from two engineering companies and shared nearly $1.4 million with Arturo Cuellar, a former Hidalgo County commissioner. Arturo Cuellar then used a company he controlled to facilitate the payment of approximately $405,000 in bribes to his cousin, John Cuellar, which were disguised as legitimate legal expenses. In exchange for these payments, John Cuellar took several official actions to benefit the companies, including helping to award contracts worth approximately $38.5 million to rehabilitate Weslaco’s water treatment facilities. Quintanilla received approximately $85,000 during the course of the scheme and used that money to pay cash bribes to Tafolla for his official actions to benefit the companies that received the water treatment plant contracts.

In October 2022, a jury convicted Arturo Cuellar and Quintanilla for their roles in the bribery conspiracy. Arturo Cuellar was later sentenced to 20 years in prison and Quintanilla was sentenced to 16 years and eight months in prison. John Cuellar was sentenced to three years in prison after previously pleading guilty in August 2019. Tafolla pleaded guilty in April 2019 to federal program bribery.

Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Alamdar S. Hamdani for the Southern District of Texas, Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division, and Special Agent in Charge Ramsey E. Covington of the IRS Criminal Investigation (IRS-CI) Houston Field Office made the announcement.

The FBI San Antonio Field Office and IRS-CI Houston Field Office investigated the case.

Trial Attorney William J. Gullotta and Acting Deputy Chief Marco A. Palmieri of the Criminal Division’s Public Integrity Section (PIN) and Assistant U.S. Attorney Roberto Lopez Jr. for the Southern District of Texas prosecuted the case. Trial Attorney Peter M. Nothstein and former PIN Trial Attorneys Erica O’Brien Waymack and Jessica C. Harvey provided valuable assistance.

McALLEN, Texas – The final man involved in a fatal smuggling conspiracy has been ordered to federal prison for two separate smuggling events that occurred just weeks apart, announced U.S. Attorney Alamdar S. Hamdani.

Orlando Andres Garcia, 24, Mission, pleaded guilty to human smuggling resulting in death and conspiracy to harbor undocumented aliens within the United States Feb. 3, and Nov. 29, 2022, respectively.

U.S. District Judge Micaela Alvarez has now ordered Garcia to serve 120 months for the conspiracy to harbor in addition to 151 months for the smuggling event resulting in death. The sentences will be served in part consecutively for a total of 251 months in federal prison to be immediately followed by three years of supervised release.

At the hearing, the court heard how Garcia had been communicating with the other driver in the fatal smuggling event and encouraged him to reach dangerous speeds. Judge Alvarez also considered the life-altering and permanent injuries the survivors sustained in the accident and that Garcia was involved in stealing people and holding them for ransom a mere 18 days after the fatal accident.

In handing down the sentences, Judge Alvarez considered how the smugglers utilized multiple weapons, including firearms and a machete, further noting Garcia’s disregard for the well-being of the migrants and emphasizing the repetitiveness of his smuggling and the effects and harm his conduct has had on the victims and their families.  

“Garcia trafficked in humans, not caring about the multiple lives he destroyed,” said Hamdani. “His actions led to the death of three migrants and to the kidnapping of nearly 50 at gunpoint. He saw migrants not as human beings but as property to buy and sell. Now, the only property he can buy or sell for years to come is what he can find in the prison’s commissary.”

“The fact that this unscrupulous smuggler put lives in danger to support his criminal activity is reprehensible. Today, justice was served,” said Special Agent in Charge Craig Larrabee for Homeland Security Investigations (HSI) San Antonio. “These deaths could have been prevented were it not for this individual’s concern more for his own greed rather than the safety of others. HSI remains committed to working with our law enforcement partners and utilizing our unique investigative authorities to bring to justice those responsible for horrible tragedies like this.”

On Oct. 22, 2021, Brandon Cibriano-Gonzalez acted as a brush guide to smuggle a group of 10 non-U.S. citizens from Mexico into the United States. Francisco Javier Quintanilla-Alcocer and Garcia then picked them up and began to drive them in a Chevrolet Impala and Chevrolet Malibu, respectively. Law enforcement attempted to conduct a traffic stop, but both vehicles failed to yield and a high-speed chase ensued. Evidence showed that Garcia had been communicating with Quintanilla-Alcocer and telling him to go faster. They reached speeds of 130 miles per hour.

Quintanilla-Alcocer eventually turned onto a dirt road in Mission where the Impala rolled and crashed into a homeowner’s fence. Authorities located a total of seven individuals on scene. Three had been ejected, two of whom died at the scene. Three months following the crash, a third migrant succumbed to his injuries.

Just a couple weeks after this event, Garcia was involved in another smuggling scheme and holding people for ransom. On Nov. 9, 2021, several conspirators had arrived at a stash house, screamed “immigration” and directed 47 fleeing individuals to multiple vehicles staged outside the residence. They then transported them in the backseats and trunks of vehicles to multiple residences before being transported once again.

While held at the stash houses, conspirators possessed and brandished firearms and contacted the families for additional funds to facilitate transportation north. Garcia also used the aliens as payment to co-conspirators for their assistance in the stealing the aliens. But when they were unable to secure monies for some of the aliens, several conspirators sold them to members of a third alien smuggling organization.

12 others have been convicted in relation to this scheme and received sentences of up to 80 months. 

Mexican nationals Quintanilla-Alcocer, 39, and Cibriano-Gonzalez, 22, also pleaded guilty in the case resulting in death and have also been sentenced.

HSI led the investigations of both cases. Border Patrol, Palmview Police Department, and Texas Department of Public Safety assisted with the case resulting in death. Assistant U.S. Attorneys Lee Fry and Devin Walker prosecuted the cases. 

HOUSTON – A 61-year-old man has been sentenced after pleading guilty to conspiracy to commit wire fraud, announced U.S. Attorney Alamdar S. Hamdani.

William Dexter Lucas pleaded guilty Dec. 8, 2022, for his role in orchestrating a scheme to steal funds from the Payroll Protection Plan (PPP) and various car dealerships by faking forms to obtain car loans.   

U.S. District Judge Charles Eskridge has now ordered Lucas to serve 97 months in federal prison to be immediately followed by five years of supervised release. He was also ordered to pay $286,359.14 in restitution to the Small Business Administration (SBA) and the victimized car dealerships. 

In handing down the sentence, Judge Eskridge noted the lengths Lucas had gone to steal from his victims, including forging multiple documents and manipulating potential witnesses against him. The court also heard additional evidence describing Lucas’ lengthy criminal history and refusal to acknowledge portions of his guilt. 

“William Dexter Lucas, a con man who worked several schemes at once, cloaked himself in the robes of a fake church so he could defraud local businesses and steal from taxpayers,” said Hamdani. “And he stole not to give to the poor, but to line his own pockets with money meant to help those struggling with the ravages of the COVID-19 pandemic. Thankfully the law has caught up to William Lucas, giving have ample time to think over his past sins as he sits in a prison cell.”

At the time of the plea, Lucas admitted conspiring with several others to defraud car dealerships and the U.S. government from on or around 2017 to 2020. To facilitate his scheme, Lucas set up and claimed to operate the “Jesus Survives Ministry,” a church existing only on paper.   

Upholding the title of “pastor” of the non-existent church, Lucas applied for a $50,000 PPP loan to cover the fictitious payroll needs. Additionally, using one of roughly 20 different known aliases, Lucas applied for multiple car loans by submitting various fraudulent forms and financial statements.

In total, the scheme cost the SBA and various car dealerships across the country over $400,000 in losses, leaving U.S. taxpayers to fund his fraud.   

When authorities began investigating Lucas’s crimes, he attempted to cover them up by filing false claims of stolen identity with the Federal Trade Commission.    

Previously released on bond, he was ordered into custody following the sentencing today where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

Homeland Security Investigations conducted the investigation with assistance from the SBA and Treasury Inspector General for Tax Administration. Assistant U.S. Attorney (AUSA) Thomas Carter and former AUSA Zahra Fenelon prosecuted the case.

CORPUS CHRISTI, Texas – A 34-year-old man has pleaded guilty to possession with intent to distribute more than four kilograms of cocaine, announced U.S. Attorney Alamdar S. Hamdani.

On Oct. 4, Elias Garcia attempted to drive a Jeep Cherokee SUV through the primary inspection lane of the Falfurrias Border Patrol (BP) checkpoint. Soon thereafter, an X-ray of the vehicle showed the presence of an anomaly inside the vehicle’s battery compartment located beneath the driver’s seat.

Authorities searched the vehicle and discovered four bundles of cocaine concealed within the battery.

The weight of the cocaine was approximately four kilograms and had an estimated street value of more than $200,000.

U.S. District Judge David S. Morales will impose sentencing Feb. 21. At that time, Garcia faces up to 40 years in federal prison and a possible $5 million maximum fine.

He has been and will remain in custody pending sentencing.

BP and the Drug Enforcement Administration conducted the investigation. Assistant U.S. Attorney John Marck is prosecuting the case.

HOUSTON – A 55-year-old Baytown woman has been ordered to prison for wire fraud, announced U.S. Attorney Alamdar S. Hamdani.

Judy M. Green pleaded guilty April 27, admitting to embezzling over $3 million from her employer for approximately 10 years.   

U.S. District Judge Alfred Bennett has now ordered Green to serve 24 months in federal prison to be immediately followed by three years of supervised release. Judge Bennett also ordered Green to pay $3.4 million in restitution, with $10,000 due immediately. At the hearing, the court heard additional evidence that because of the her theft, the victim company had to lay off employees and could not give bonuses to the remaining employees. In handing down the sentence, the court noted the length and depth of Green’s betrayal of people who trusted her. 

Green worked as an account manager for a Houston-based building and maintenance supply company. As part of the scheme, she submitted fraudulent invoices to induce payment from the company and pocketed the funds for personal expenses. Ultimately, authorities uncovered the scheme when one of the business owners noticed a large payment to an unknown credit card company in the summer of 2022. An audit revealed the fraud had been ongoing since 2012.   

Green was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.

The FBI conducted the investigation. Assistant U.S. Attorney Thomas Carter prosecuted the case.

CORPUS CHRISTI, Texas – A 34-year-old Corpus Christi resident has been sentenced for possession of child pornography, announces U.S. Attorney Alamdar S. Hamdani.

Omar Diego Lyra pleaded guilty July 27.

U.S. District Judge David Morales has now sentenced Lyra to 228 months in prison. At the hearing, the court heard Lyra engaged in distribution of images and videos with others. In handing down the prison term, the court noted the seriousness of the offense and that Lyra provided images and videos to others. Lyra was further ordered to pay $27,000 in restitution to the victims and will serve 20 years on supervised release following completion of his prison term. During that time, he will have to comply with numerous requirements designed to restrict his access to children and the internet. Lyra will also be ordered to register as a sex offender.

The investigation began June 2022 when authorities discovered images of child pornography on an online platform associated with an email address belonging to Lyra. Law enforcement then executed a search warrant of Lyra’s residence and found images and videos depicting sexual exploitation of minors present on electronic devices in his possession.

Lyra has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

Homeland Security Investigations conducted the investigation with assistance of the Victoria and Corpus Christi Police Departments.

Assistant U.S. Attorney Patrick Overman prosecuted the case, which was brought as part of Project Safe Childhood (PSC), a nationwide initiative the Department of Justice (DOJ) launched in May 2006 to combat the growing epidemic of child sexual exploitation and abuse. U.S. Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section leads PSC, which marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children and identifies and rescues victims. For more information about PSC, please visit DOJ’s PSC page. For more information about internet safety education, please visit the resources link on that page.

McALLEN, Texas – A 53-year-old naturalized citizen residing in Mexico has pleaded guilty to importing nearly 91 pounds of meth from Mexico, announced U.S. Attorney Alamdar S. Hamdani.

On April 30, Manuel Ignacio Ley Villa approached the Hidalgo port of entry driving a maroon Chrysler Pacifica. Law enforcement noticed he appeared nervous and referred him to secondary inspection. There, an x-ray inspection revealed anomalies within the vehicle’s fuel tank.

Upon further investigation, law enforcement discovered a fuel tank filled with a liquid material which crystalized upon contact with the floor. The weight of the liquid meth was approximately 41.14 kilograms and had an estimated street value of $810,000.

U.S. District Judge Micaela Alvarez accepted the plea and set sentencing for Feb. 13, 2024. At that time, Ley Villa faces up to life in federal prison and a possible $10 million maximum fine. 

He has been and will remain in custody pending sentencing.

Homeland Security Investigations conducted the investigation with the assistance of Customs and Border Protection. Assistant U.S. Attorney Jose A. Garcia is prosecuting the case.

LAREDO, Texas – A 38-year-old man was sentenced for his role in a complex mortgage fraud scheme, announced U.S. Attorney Alamdar S. Hamdani.

Edmundo De La Torre pleaded guilty April 19 to orchestrating a mortgage fraud scheme in which he altered hundreds of documents to get otherwise unqualified buyers’ approval for government-backed mortgages.

U.S. District Judge Marina Marmalejo has now ordered De La Torre to serve 36 months in federal prison to be immediately followed by three years of supervised release. De La Torre was also ordered to pay restitution in the amount of $1.17 million. In handing down the sentence, Judge Marmolejo noted the sophistication and persistence of De La Torre’s crime and remarked on the profound effects it has on potential first-time and low-income homebuyers seeking homes, and instead ending up entangled in legal and finances issues.

From 2018 to 2020, De La Torre admitted he was working as a salesman for a Laredo area homebuilder. De La Torre used his position to attempt to get potential customers approved for Department of Housing and Urban Development (HUD)-backed mortgages. He forged various documents, including financial statements, bank statements, paycheck stubs and letters of reference for at least 38 otherwise unqualified homebuyers.

De La Torre then submitted these fake and forged documents to a Laredo area bank on behalf of the potential homebuyers. He admitted he was receiving a commission for each sale and personally profiting over $200,000 from the scheme. In addition, more than three dozen known loans in this scheme ultimately defaulted or had to be restructured, costing HUD roughly $971,310.10 at the time of his plea in April.

De La Torre was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.

HUD - Office of Inspector General conducted the investigation with assistance from the FBI. Assistant U.S. Attorney Thomas Carter prosecuted the case.

McALLEN, Texas – A 51-year-old Edinburg resident has been ordered to federal prison for attempting to import more than 20 kilograms of meth into the country, announced U.S. Attorney Alamdar S. Hamdani.

Richard Nares pleaded guilty May 2, 2022, to importation of 500 grams or more of meth.

Chief U.S. District Judge Randy Crane has now sentenced him to 60 months in federal prison followed by five years of supervised release. At the hearing, the court considered the volume and purity of the meth. In handing down the sentence, the court noted how the large quantity of narcotics were being stored in vehicle batteries, which contradicted Nares’ claim he thought he was just trafficking marijuana.

On Dec. 20, 2021, Nares attempted to enter the United States from Mexico via the Hidalgo Port of Entry in a Dodge Ram 2500. Law enforcement observed two commercial vehicle batteries in the rear row of the truck to which a K-9 alerted to the presence of narcotics. Once they dismantled the batteries, authorities discovered two rectangular shaped bundles in each battery. Upon the search of the connected batteries under the hood of the vehicle, they found four additional bundles.

Laboratory testing confirmed the eight bundles contained meth and had a total weight of 20.34 kilograms.

Nares subsequently admitted that he traveled to Mexico earlier in the day and intended to turn the vehicle over to another individual after entering the United States with the narcotics.

He was permitted to remain on bond and voluntarily surrender to the U.S. Marshal in the near future.  

Homeland Security Investigations and Customs and Border Protection conducted the investigation. Assistant U.S. Attorney Lee Fry prosecuted the case.

HOUSTON – A former martial arts and gymnastics instructor from Alvin has been charged with multiple child pornography crimes, announced U.S. Attorney Alamdar S. Hamdani.

Franklin Joseph Perkins, 40, previously worked at the Kuk Sool Won Dojo and Gulf Coast Gymnastics, both located in Alvin. He is charged with transportation, receipt and possession of child pornography. 

Perkins appeared today for a detention hearing, at which time U.S. Magistrate Judge Andrew Edison found him to be a danger to the community and ordered him into custody pending further criminal proceedings.

Law enforcement has identified at least two alleged victims but believe there are more. If you are a victim or have any information about potential others, please contact Homeland Security Investigations (HSI) in Galveston at 409-443-0103.

A federal grand jury returned the three-count indictment Nov. 15.

According to information presented at the detention hearing, the investigation began when they learned of suspected child sexual abuse materials uploaded using an online account Perkins controlled. They executed a federal search warrant at his residence which revealed child sexual abuse content stored in a Google Drive account associated with Perkins, according to the testimony and evidence at the hearing today. Law enforcement also allegedly discovered non-pornographic images of what appears to be underage minors in gymnastics clothing and screenshots that depict young girls’ social media accounts.

During the investigation, two women, now adults, have come forward to report allegations of sexual assault and inappropriate contact involving Perkins when they were still minors living in Alvin.

“Every day we entrust our children, often budding athletes, to the care of coaches and authority figures. We cannot and will not take these kinds of allegations lightly,” said Hamdani. “But, we also need your help. Our goal is not only to secure justice but to also make sure any and all possible victims have their voices heard. If you or anyone you know has been in contact with Franklin Perkins and have knowledge any potential crime, please come forward.”

“Identifying victims of child sexual exploitation not only helps law enforcement investigate and convict the individuals responsible for the abuse, it also helps to connect the victims and their families with the services they need to recover,” said Mark Dawson, special agent in charge for HSI Houston. “HSI has dedicated full-time victim assistant specialists who work closely with child sexual exploitation victims to connect them with the medical treatment, counseling and other services that they might need following sexual abuse. We know this process can be extremely difficult for victims and our specialists make every effort to sensitively respond to the unique needs of child victims and provide a trauma-informed environment conducive to recovery.”

If convicted, Perkins faces a minimum of five and up to 20 years in federal prison, for the transportation and receipt charges and up to 10 for possessing child pornography. All counts also carry a potential fine of $250,000 as well as a $5,000 special assessment under the Justice for Trafficking Act, a maximum of a $35,000 special assessment under the Amy, Vicky and Andy Child Pornography Victim Assistance Act and mandatory restitution in an amount of no less than $3,000 per victim.

Suspected victims of child sexual exploitation or missing children may be reported to the National Center for Missing & Exploited Children by calling its toll-free 24-hour hotline at 1-800-THE-LOST.

Assistant U.S. Attorney Colton Turner is prosecuting the case, which was brought as part of Project Safe Childhood - a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."

An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.

HOUSTON – A 31-year-old Magnolia resident has pleaded guilty to possessing stolen credentials with intent to defraud, announced U.S. Attorney Alamdar S. Hamdani.

Sanel Bulic admitted to possessing approximately 68 stolen credentials purchased from an online marketplace on the dark web.

These unauthorized access devices contained login credentials such as usernames and passwords to various online accounts belonging to other persons for services such as Amazon, Chase, Facebook, Netflix, Paypal, Wells Fargo and more.

U.S. District Judge Alfred Bennett accepted the plea and set sentencing for March 7, 2024. At that time, Bulic faces up to 10 years in federal prison and a possible $250,000 maximum fine. He has been and will remain in custody pending sentencing.

The FBI conducted the investigation. Assistant U.S. Attorneys Michael Chu and James Hu prosecuted the case.

HOUSTON – A 34-year-old Houston resident and felon has been ordered to federal prison for illegal purchase and trafficking of firearms, announced U.S. Attorney Alamdar S. Hamdani.

A federal jury convicted Jose Abraham Nicanor May 11 on all 13 counts as charged following a three-day trial. He was also convicted for possessing a firearm after a previous felony for armed robbery.

U.S. District Judge Kenneth M. Hoyt has now ordered Nicanor to serve 60 months in federal prison. At the hearing, the court heard evidence that showed Nicanor aggregated the firearms shipment to Mexico. In handing down the sentence, the court noted Nicanor’s conduct amounted to more than mistakes, but to a pattern of choices to violate the law.

“Stemming the illegal river of firearms into Mexico, a river stained blood red, deprives Mexican cartels of their tools of violence,” said Hamdani. “Cartels and other transnational criminal organizations are a national security threat, and my office, with its fearless prosecutors, will always be committed to aggressively pursuing those who exploit American gun laws so that weapons of war don’t reach violent criminals in Mexico and beyond.”

“Firearms trafficking and straw purchasing are not victimless crimes,” said acting Special Agent in Charge Noel Rangel of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). “These acts are illegal and puts firearms in the hands of violent criminals. By focusing on firearms trafficking and straw purchasing, ATF keeps guns out of the hands of criminal trigger pullers, thereby reducing violent crime.”

At trial, the jury heard that Nicanor recruited two straw purchasers to buy high-caliber rifles that drug trafficking organizations regularly seek.

Testimony and evidence showed that a total of 94 firearms were attributable to Nicanor’s straw purchasing group. Mexican authorities later recovered some of the firearms in the possession of drug trafficking organizations.

The jury also heard that Nicanor rented a machine gun at a local gun range and posted a video of himself with the firearm to his social media. As a convicted felon, he is prohibited from possessing firearms or ammunition per federal law.

Nicanor was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.

The straw purchasers – James Paxton Jefferson, 34, Alejandro Garcia, 33, both of Houston – previously pleaded guilty and have been sentenced.

ATF conducted the investigation. Mexican authorities also provided assistance. Assistant U.S. Attorneys Lisa Collins and Stuart Tallichet prosecuted the case.

HOUSTON – A 33-year-old man has been sentenced to federal prison following his conviction for conspiracy to possess with the intent to distribute nearly 4,000 grams of drugs, announced U.S. Attorney Alamdar S. Hamdani. 

Jorge Delgado-Santacruz pleaded guilty Nov. 29, 2022.

U.S. District Judge Lee Rosenthal has now ordered Delgado-Santacruz to serve 180 months in prison to be immediately followed by five years of supervised release. At the hearing, the court heard additional testimony about the impact meth and heroin has had on the community at large and noted the sentence was appropriate to deter this kind of activity.

The investigation began in November 2020 when authorities learned Delgado-Santacruz was trafficking both meth and heroin in the Houston area.

Law enforcement set up numerous controlled drug buys. Delgado-Santacruz would negotiate the sale price of the substances and then directed others to deliver the narcotics.

Delgado-Santacruz was ultimately held accountable for the distribution of 892 grams of meth and 3,059.357 grams of heroin from Dec. 9, 2020, to Jan. 18, 2022. The total street value of all the drugs attributable to him is estimated at $375,000.

Delgado-Santacruz has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

The Drug Enforcement Administration and Houston Police Department conducted the investigation. Assistant U.S. Attorney Stuart A. Burns prosecuted the case.