Southern District of Texas

HOUSTON – Charges were unsealed today against a former official at Citgo Petroleum Corporation, a Houston-based subsidiary of Venezuela’s state-owned and state-controlled energy company Petróleos de Venezuela S.A. (PDVSA), announced U.S. Attorney Ryan K. Patrick, Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division and Special Agent in Charge Mark Dawson of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in Houston.

Jose Luis De Jongh Atencio, 48, a dual U.S.-Venezuelan citizen is charged for his alleged role in laundering the proceeds of a scheme involving bribes made to corruptly secure business advantages from Citgo and PDVSA. A federal grand jury in Houston returned the six-count indictment July 16. It was unsealed today upon his initial appearance in federal court.

De Jongh, a former procurement officer and manager in Citgo’s Special Projects Group, is charged with one count of conspiracy to launder money and five counts of money laundering. The indictment alleges that beginning in or around 2013 and continuing through at least 2019, De Jongh agreed to accept bribe payments from businessmen such as Jose Manuel Gonzalez Testino, a dual U.S.-Venezuelan citizen, and Tulio Anibal Farias Perez, a Venezuelan national and Houston resident, and others in exchange for assisting the businessmen and related companies in conducting business with Citgo and PDVSA. According to the indictment, De Jongh received over $2.5 million in bribe payments through the scheme. In return he allegedly provided improper business advantages to Gonzalez and Farias to assist them with procuring Citgo and PDVSA contracts.  

The indictment further alleges that De Jongh directed bribe payments from Gonzalez, Farias and others to be made to bank accounts in the names of shell companies in Panama and Switzerland. In some instances, he also allegedly directed the creation of fake invoices to justify payments. De Jongh then laundered the bribe proceeds through U.S. bank accounts and used most of the funds to purchase real property located in the Southern District of Texas (SDTX), according to the charges. De Jongh also allegedly received gifts and other things of value from Gonzalez, Farias and others including tickets to a 2014 World Series Game, Super Bowl XLIX and a U2 concert. Gonzalez and Farias have already entered guilty pleas in connection with the case. 

With the unsealing of the indictment today, the Justice Department has announced charges against 27 individuals, 20 of whom have pleaded guilty, as part of a larger, ongoing investigation by the U.S. government into bribery at PDVSA. HSI in Houston is conducting the ongoing investigation with assistance from HSI in Boston and Miami. Assistant U.S. Attorneys (AUSA) John P. Pearson and Robert S. Johnson of the SDTX are prosecuting the case along with Trial Attorneys Sarah E. Edwards and Sonali D. Patel of the Criminal Division’s Fraud Section. SDTX AUSA Kristine E. Rollinson is handling the forfeiture aspects of the case. 

The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

An indictment is merely an allegation and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. 

Charges were unsealed today against a former official at Citgo Petroleum Corporation, a Houston-based subsidiary of Venezuela’s state-owned and state-controlled energy company Petróleos de Venezuela S.A. (PDVSA).

Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, U.S. Attorney Ryan K. Patrick of the Southern District of Texas (SDTX) and Special Agent in Charge Mark Dawson of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in Houston made the announcement.

Jose Luis De Jongh Atencio (De Jongh), 48, a dual U.S.-Venezuelan citizen is charged for his alleged role in laundering the proceeds of a scheme involving bribes made to corruptly secure business advantages from Citgo and PDVSA. A federal grand jury in Houston returned the six-count indictment July 16. It was unsealed today upon his initial appearance.

De Jongh, a former procurement officer and manager in Citgo’s Special Projects Group, is charged with one count of conspiracy to launder money and five counts of money laundering. The indictment alleges that beginning in or around 2013 and continuing through at least 2019, De Jongh agreed to accept bribe payments from businessmen including Jose Manuel Gonzalez Testino, (Gonzalez), a dual U.S.-Venezuelan citizen, and Tulio Anibal Farias Perez (Farias), a Venezuelan national and Houston resident, and others in exchange for assisting the businessmen and related companies in conducting business with Citgo and PDVSA. According to the indictment, De Jongh received over $2.5 million in bribe payments through the scheme. In return he allegedly provided improper business advantages to Gonzalez and Farias to assist them with procuring Citgo and PDVSA contracts.  

The indictment further alleges that De Jongh directed bribe payments from Gonzalez, Farias and others to be made to bank accounts in the names of shell companies in Panama and Switzerland. In some instances, he also allegedly directed the creation of fake invoices to justify payments. De Jongh then laundered the bribe proceeds through U.S. bank accounts and used most of the funds to purchase real property located in the SDTX, according to the charges. De Jongh also allegedly received gifts and other things of value from Gonzalez, Farias and others including tickets to a 2014 World Series Game, Super Bowl XLIX and a U2 concert. Gonzalez and Farias have already entered guilty pleas in connection with the case. 

An indictment is merely an allegation and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. 

With the unsealing of the indictment today, the Justice Department has announced charges against 27 individuals, 20 of whom have pleaded guilty, as part of a larger, ongoing investigation by the U.S. government into bribery at PDVSA. HSI in Houston is conducting the ongoing investigation with assistance from HSI in Boston and Miami. Trial Attorneys Sarah E. Edwards and Sonali D. Patel of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys (AUSA) John P. Pearson and Robert S. Johnson of the SDTX are prosecuting the case. SDTX AUSA Kristine E. Rollinson is handling the forfeiture aspects of the case.  The Justice Department’s Office of International Affairs, the Swiss Federal Office of Justice and the Office of the Attorney General of Panama also provided assistance.

The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

CORPUS CHRISTI, Texas – A 49-year-old resident of Weslaco has been ordered to federal prison after admitting to transporting illegal aliens, announced U.S. Attorney Ryan K. Patrick. 

Jose Roberto Pompa pleaded guilty May 6.

Today, U.S. District Judge David S. Morales ordered Pompa to serve a 41-month sentence to be immediately followed by two years of supervised release.

On April 29, Pompa drove a covered grain hauler through the Sarita Border Patrol (BP) checkpoint, at which time a K-9 alerted to the vehicle. Authorities then referred Pompa to secondary inspection. They rolled back the cover on the trailer and utilized the built-in ladder to climb down and check. They ultimately found 48 people concealed inside the grain hauler. All were all determined to be illegally present in the United States from the countries of El Salvador, Cuba, Honduras, Peru, Mexico and Guatemala. One was an unaccompanied 15-year-old from Guatemala. 

Pompa was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility in early 2021.

BP conducted the investigation. Assistant U.S. Attorney Amanda Gould prosecuted the case.

HOUSTON – A 37-year-old Mexican citizen has been ordered to federal prison following his involvement in a conspiracy to possess with intent to distribute a large amount of meth within the Houston area, announced U.S. Attorney Ryan K. Patrick.

Custodio Carrasco-Garcia aka Ariel was illegally residing in Houston. He pleaded guilty Feb. 21.

Today, U.S. District Judge David Hittner handed Carrasco-Garcia a 360-month term of imprisonment. Not a U.S. citizen, Carrasco-Garcia is expected to face removal proceedings following the sentence.

At the hearing, the court heard information that he ran a local drug trafficking organization with providers in Mexico and participated in running a stash house. In handing down the sentence, Judge Hittner noted Carrasco-Garcia’s two previous drug convictions and that he was on parole when he committed this offense. The court found him accountable for 30,000 kilograms of narcotics including meth and cocaine and was head of the drug trafficking cell in the Houston area, further noting the extensive involvement of others and use of a stash house.

In March 2018, authorities conducted an undercover operation to purchase meth from a suspected narcotics distributor - later identified as Carrasco-Garcia. On April 6, 2018, law enforcement observed Carrasco-Garcia as he conducted a drug transaction involving a kilogram of crystal meth. He received $53,000 in exchange for the drugs. Carrasco-Garcia delivered another kilogram of meth May 18, 2018.

On May 7, 2019, authorities conducted an undercover operation during which Carrasco-Garcia sold 155.9 kilograms of crystal meth. They arrested him shortly after the operation, at which time he again was in possession of illegal substances.

Carrasco-Garcia 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, Houston Police Department and Harris County Sherriff's Office conducted the investigation. Assistant U.S. Attorney Celia Moyer prosecuted the case.

CORPUS CHRISTI, Texas – A 37-year-old resident of Pharr has been ordered to federal prison after admitting to being a felon in possession of six firearms, announced U.S. Attorney Ryan K. Patrick. 

Erasmo Elizondo-Moreno pleaded guilty May 6.

Today, U.S. District Judge David S. Morales ordered Elizondo-Moreno to serve a 66-month sentence to be immediately followed by three years of supervised release.

“When firearms enter the gray market, they are often destined to further a criminal enterprise which fuels violent crime,” said Special Agent in Charge Fred Milanowski of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).  “We are pleased to work with our partner agencies to take these illegally possessed guns off the street before they do just that.”

On June 7, 2019, authorities pulled Elizondo-Moreno over for a traffic violation. At that time, he consented to a search of his vehicle. Law enforcement soon found a tool bag in the trunk which contained six pistols concealed inside four vacuum-sealed bags.  

He later admitted to transporting the firearms to the Rio Grande Valley in exchange for $500.

Having been convicted April 25, 2019, for possessing marijuana, he is prohibited per federal law of possessing any firearms or ammunition.

Elizondo-Moreno has been in custody since his arrest for a pretrial violation on May 2 where he will remain 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 with the assistance of the Kleberg County Sheriff’s Office. Assistant U.S. Attorney Amanda Gould prosecuted the case.

LAREDO, Texas – A 48-year-old man has entered a guilty plea to conspiracy and possession with intent to distribute 183 kilograms of marijuana, announced U.S. Attorney Ryan K. Patrick.

Roberto Villarreal admitted that on March 15 he drove to a ranch near Falcon Lake intending to pick up 18 bundles of marijuana. He initially grabbed the 183 kilograms, but saw authorities and returned the drugs to the ranch with a plan to get them later.

Law enforcement conducted a traffic stop, at which time he admitted what he had done. He then led authorities to the ranch where he had planned to pick up the marijuana. There, they discovered a boot print matching Villarreal’s shoes.

Villarreal has been and will remain in in custody pending his sentencing, which is set for Dec. 1 before U.S. District Judge Marina Garcia Marmolejo. At that time, Villarreal faces a minimum of 10 years and up to life in federal prison.

The Drug Enforcement Administration conducted the investigation with the assistance of Border Patrol and the Zapata County Sheriff’s Office. Assistant U.S. Attorney Paul Harrison is prosecuting the case.

BROWNSVILLE, Texas – A 21-year-old Mexican national has admitted to possessing with the intent to distribute more than five pounds of cocaine, announced U.S. Attorney Ryan K. Patrick.

On Jan. 27, Alejandrina Quevedo-Hernandez attempted to enter the United States from Mexico through the vehicle lane at the Gateway International Port of Entry in Brownsville. Law enforcement noticed signs of tampering on the outside of the car and referred it to secondary for further inspection.

There, authorities searched her vehicle and discovered two aluminum-wrapped bricks of cocaine hidden inside the vehicle’s battery compartment.

The drugs weighed 5.2 pounds with an estimated street value of $65,000.

Sentencing has been set for Oct. 28 before U.S. District Judge Rolando Olvera. At that time, Quevedo-Hernandez faces a minimum of five years and up to life in federal prison and a possible $5 million maximum fine.

She has been and will remain in custody pending that hearing. 

Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with assistance of Customs and Border Protection. Assistant U.S. Attorney Nikki Piquette is prosecuting the case.

A Houston, Texas man has been taken into custody on allegations he fraudulently obtained more than $1.6 million in Paycheck Protection Program (PPP) loans, announced Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division and U.S. Attorney Ryan K. Patrick of the Southern District of Texas.  

Lee Price III, 29, spent the money on luxury items, real estate and personal entertainment, according to the complaint unsealed today upon his arrest. He is expected to make his initial appearance before U.S. Magistrate Judge Sam S. Sheldon in Houston today.

Price is charged with making false statements to a financial institution, wire fraud, bank fraud and engaging in unlawful monetary transactions. 

The complaint alleges Price was involved in a scheme to submit fraudulent PPP loan applications to federally insured banks and other lenders. The Small Business Administration (SBA) guarantees the loans for COVID-19 relief through the PPP under the Coronavirus Aid, Relief and Economic Security (CARES) Act. 

Two fraudulent applications received funding, according to the complaint. Price Enterprises Holdings allegedly received more than $900,000, while a loan application listing 713 Construction was approved for over $700,000. The loan applications allegedly asserted both entities each had numerous employees and significant payroll expenses. According to the charges, however, neither entity has employees nor pays wages consistent with the amounts claimed in the loan applications. Further, the individual listed as CEO on the 713 Construction loan application died in April 2020, a month before the application was submitted, according to the complaint.

Price allegedly used the loan proceeds not for payroll expenses, but for lavish personal purchases, such as expending the loan money on a Lamborghini Urus, a Rolex watch and real estate transactions. He also allegedly spent thousands at strip clubs and other Houston night clubs. The complaint further alleges Price used a portion of the loan money to buy a 2020 Ford F-350 pickup truck.

The CARES Act is a federal law enacted March 29. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief the CARES Act provides is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.   

A federal criminal complaint is merely an accusation. A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law. 

The Federal Housing Finance Agency Office of the Inspector General (OIG), SBA-OIG and U.S. Postal Inspection Service - Houston Division conducted the investigation. Trial Attorneys Timothy A. Duree, Senior Attorney Advisor James Alexander and Matthew Grisier are prosecuting the case with the assistance of Assistant U.S. Attorney James McAlister.

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

LAREDO, Texas – A federal grand jury has returned an indictment against a 68-year-old Mexican man for smuggling goods from the United States, announced U.S. Attorney Ryan K. Patrick.

Juan Jose Jimenez-Guerra is charged with attempting to smuggle a total of 92 firearm magazines into Mexico, 48 of which were 7.62 caliber designed for an AK-47 type rifle. The remaining magazines were 5.56 caliber for an AR-15 rifle.

He was originally charged by criminal complaint and has remained in custody pending further proceedings. He is expected to appear for his arraignment before a U.S. magistrate judge in the near future.

On July 3, Jimenez-Guerra was attempting to leave the United States at the Lincoln Juarez Port of Entry Bridge in Laredo, according to the allegations. There, authorities allegedly observed two firearm magazines fall from his pickup truck. They conducted a more thorough inspection of his vehicle and discovered the nearly 100 magazines located in the bed of the truck, according to the charges.

If convicted, Jimenez-Guerra face up to 10 years in federal prison and a possible $250,000 maximum fine.

Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with the assistance of Customs and Border Protection. Assistant U.S. Attorney Brandon Scott Bowling 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 federal grand jury has returned a two-count indictment against a 20-year-old Haltom City man for conspiring with others to import approximately 438.99 grams of meth from Mexico, announced U.S. Attorney Ryan K. Patrick.

Cesar Augusto Berlanga Jr. is charged with importing meth into the United States and one count of conspiracy. Originally charged by criminal complaint, he has remained in custody pending further criminal proceedings. He is expected to appear before a U.S. magistrate judge on the indictment in the near future.  

On July 9, Berlanga applied for admission as a pedestrian into the United States from Mexico at the Gateway to the Americas International Bridge in Laredo, according to the charges. During primary inspection, an officer allegedly noticed Berlanga’s shoes appeared to be larger than normal. The charges allege that while being escorted for further inspection, Berlanga ran towards the streets of Laredo. Authorities quickly apprehended him approximately two blocks away after a brief foot chase, according to the allegations.

An inspection of Berlanga’s shoes allegedly revealed two plastic bags containing a substance that field tested positive for meth. The drugs weighed approximately 438.99 grams and have an estimated street value of $3073, according to the charges.

If convicted, Berlanga face a minimum of 10 years in federal prison and a possible $10 million maximum fine.

Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with assistance from Customs and Border Protection. Assistant U.S. Attorney Yoona Lim 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.

HOUSTON – Santa Maria Hostel and Family Time Crisis Center have been awarded $500,000 each to provide safe, stable housing and appropriate services to victims of human trafficking, announced U.S. Attorney Ryan K. Patrick.

“Human trafficking is a scourge,” said Patrick. “Prosecuting the pimps and enablers is sometimes not the hardest part. The support services for the victims can be difficult to find, fund and maintain. Grants like these take care of the victims with a safe space where they can begin to put their life back together.”

The Department of Justice’s Office of Justice Programs (OJP) and its component, the Office for Victims of Crime (OVC), have issued the grants to provide six to 24 months of transitional or short-term housing assistance for trafficking victims. This includes rental, utilities or related expenses such as security deposits and relocation costs. The grants will also provide funding for support needed to help victims locate permanent housing, secure employment and occupational training and counseling. Family Time in Humble and Santa Maria Hostel in Houston are among 73 organizations receiving more than a combined $35 million to support housing services for human trafficking survivors.

Human trafficking offenses are among the most difficult crimes to identify, and the scope of human trafficking victimization may be much greater than the limited data reflects. The National Institute of Justice issued a new report that found the number of human trafficking cases captured in police reports may represent only a fraction of all such cases. Expanding housing and other services to trafficking victims remains a top Justice Department priority.

OVC hosted listening sessions and roundtable discussions with stakeholders in the field in 2018 and launched the Human Trafficking Capacity Building Center. From July 2018 through June 2019, 118 OVC human trafficking grantees reported serving 8,375 total clients including confirmed trafficking victims and individuals showing strong indicators of trafficking victimization.

A complete list of individual award amounts and jurisdictions that will receive funding is located HERE.  

Principal Deputy Assistant Attorney General Katharine T. Sullivan directs OJP which provides federal leadership, grants, training, technical assistance and other resources to improve the nation’s capacity to prevent and reduce crime, assist victims and enhance the rule of law by strengthening the criminal and juvenile justice systems. More information about OJP and its components can be found at ojp.gov.

The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

HOUSTON – A 34-year-old resident of Houston is in custody for charges relating to sexual exploitation of a child, otherwise known as producing child pornography, announced U.S. Attorney Ryan Patrick.

A federal grand jury returned the indictment against Richard Reyes Trigo today for sexual exploitation of children as well as distribution and possession of child pornography. He is expected to make an appearance on the indictment in the near future.  

He was originally charged by criminal complaint following suspicion he actively engaged in the sexual exploitation of a minor female under the age of two. He was taken into federal custody July 15 and made his initial appearance before U.S. Magistrate Judge Peter Bray, at which time he was ordered detained pending further criminal proceedings.

The charges allege Trigo engaged in conversations via a social media forum that individuals who have a sexual interest in children allegedly frequent. Trigo saw a post that contained terms commonly associated with the sexual exploitation of children and responded, according to the charges. During the course of the chats, Trigo allegedly claimed he was sexually active with a minor female and claimed he performed sexual acts on her. Trigo later sent four images he claimed were of the minor, some of which focused on her vagina, according to the charges.

If convicted of producing child pornography, Trigo faces a minimum of 15 and up to 30 years in federal prison, while the distribution and possession charges carry additional penalties up to 20 and 10 years, respectively. Each charge also carries a possible $250,000 maximum fine.

The FBI conducted the investigation.

Assistant U.S. Attorneys Sherri Zack and Sherin Daniel are 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 tab on that page.  

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 Houston man has been taken into custody on allegations he fraudulently obtained more than $1.6 million in Paycheck Protection Program (PPP) loans, announced U.S. Attorney Ryan K. Patrick and Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division.

Lee Price III, 29, spent the money on luxury items, real estate and personal entertainment, according to the complaint unsealed today upon his arrest. He is expected to make his initial appearance before U.S. Magistrate Judge Sam S. Sheldon in Houston at 2:00 p.m. today.

Price is charged with making false statements to a financial institution, wire fraud, bank fraud and engaging in unlawful monetary transactions.

The complaint alleges Price was involved in a scheme to submit fraudulent PPP loan applications to federally insured banks and other lenders. The Small Business Administration (SBA) guarantees the loans for COVID-19 relief through the PPP under the Coronavirus Aid, Relief and Economic Security (CARES) Act.

Two fraudulent applications received funding, according to the complaint. Price Enterprises Holdings allegedly received more than $900,000, while a loan application listing 713 Construction was approved for over $700,000. The loan applications allegedly asserted both entities each had numerous employees and significant payroll expenses. According to the charges, however, neither entity has employees nor pays wages consistent with the amounts claimed in the loan applications. Further, the individual listed as CEO on the 713 Construction loan application died in April 2020, a month before the application was submitted, according to the complaint.

Price allegedly used the loan proceeds not for payroll expenses, but for lavish personal purchases, such as loan money on a Lamborghini Urus, a Rolex watch and real estate transactions. He also allegedly spent thousands at strip clubs and other Houston night clubs. The complaint further alleges Price used a portion of the loan money to buy a 2020 Ford F-350 pickup truck.

The CARES Act is a federal law enacted March 29. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief the CARES Act provides is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.   

The Federal Housing Finance Agency Office of the Inspector General (OIG), SBA-OIG and U.S. Postal Inspection Service - Houston Division conducted the investigation. Trial Attorneys Timothy A. Duree, James Alexander and Matthew Grisier are prosecuting the case with the assistance of Assistant U.S. Attorney James McAlister.

A federal criminal complaint is merely an accusation. A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

LAREDO, Texas – Three Mexican men and one U.S. citizen have entered guilty pleas for their part in a conspiracy to possess cocaine with intent to deliver a large amount of cocaine, announced U.S. Attorney Ryan K. Patrick.

Aaron Hervey Esparza Villarreal, 27, of Monterrey, Nuevo Leon, Mexico, pleaded guilty today, admitting he was part of a conspiracy that involved smuggling cocaine hidden in a semi-truck. Mexican citizens Jose Contreras Rodriguez, 58, and Ernesto Yadir Martinez Campos, 39, and, Viviano Hernandez, 41, a U.S. citizen residing in Mexico, pleaded guilty last month.

On Jan. 17, law enforcement observed two men, later identified as Rodriguez and Hernandez, working on the vehicle. They then got into a sedan, left the area and met up with an SUV. At that time, Hernandez handed over trash bags to Villarreal in the SUV.

Authorities attempted to stop the SUV, but Villarreal led them on a high-speed pursuit before crashing into the Evelyn Motel on San Bernardo Avenue. Inside the vehicle were 31 kilograms of cocaine in the trash bags.

Law enforcement also apprehended Hernandez and Rodriguez as they attempted to enter Mexico.

Campos was the driver of the semi and brought the drugs into the United States from Mexico. He was also taken into custody.

U.S. District Judge Marina Garcia Marmolejo will impose sentencing for Rodriguez, Hernandez and Campos Oct. 28, while Villarreal is set for Dec. 1. At the time of their sentencing hearings, all men face up to life in prison. They have been and will remain in custody.

Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation. Assistant U.S. Attorney David Fawcett is prosecuting the case.

CORPUS CHRISTI, Texas - A 28-year-old man has been charged with mail fraud after allegedly receiving nearly $100,000 in fraudulent benefits, announced U.S. Attorney Ryan K. Patrick.

William Peck is expected to make his initial appearance today at 10:15 a.m. before U.S. Magistrate Judge Jason B. Libby.

The criminal complaint, filed July 29, alleges that Peck secured a Post Office (P.O.) box at the Portairs Station in Corpus Christi in May 2020. Within weeks, authorities noticed a large volume of Texas Workforce Commission (TWC) correspondence addressed to several different individuals, but at the same mailing address, according to the charges. The complaint further alleges claims for 85 different individuals had been submitted to TWC for Pandemic Unemployment Assistance (PUA) - all listing Peck’s P.O. Box as their address on file. 

The investigation revealed several of those applications listed the same names, but had different Social Security (SS) numbers, according to the charges. Numerous applications also allegedly indicated a Texas residence. However, the investigation revealed SS numbers on many of the claims were actually  associated with persons residing outside of Texas, according to the complaint.  

TWC allegedly paid out approximately $95,000 for PUA claims listing Peck’s P.O. Box as the address for the purported claimants.

The Coronavirus Aid, Relief and Economic Security Act is a federal law enacted March 29. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic.

If convicted of mail fraud, Peck faces up to 20 years in federal prison and a possible $250,000 million maximum fine.

The Department of Labor - Office of the Inspector General, U.S. Postal Inspection Service and TWC conducted the investigation. Assistant U.S. Attorneys Andrew Swartz and Asha Natarajan are prosecuting the case.

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

HOUSTON – Two women have been charged in a 32-count indictment related to the false filing of tax returns, announced U.S. Attorney Ryan K. Patrick.

Rita Rogers made her initial appearances before U.S. Magistrate Judge Christina A. Bryan this afternoon, while Joi Lin Hunt was in federal court earlier this week.

A Houston grand jury returned the indictment July 16 alleging one count of conspiracy to defraud the United States and 31 counts of aiding and assisting in the preparation and filing of false income tax returns.

According to the indictment, Hunt and Rogers owned Caliente Xpress Tax Service, an income tax preparation company in Southwest Houston. There, they allegedly prepared returns for customers in tax years 2013-2016 which included false schedules on 1040 forms. These claimed company losses for customers who did not own any businesses and had no such expenses, according to the allegations.

The indictment further alleges Hunt and Rogers did not inform customers the Schedule Cs were being prepared on their behalf. Caliente Xpress allegedly charged fees ranging from $300 to $600 to prepare a tax return.

During the 2013-2016 tax years, Hunt and Rogers prepared in excess of 2,600 tax returns, according to the indictment.

If convicted, both face up to five years imprisonment and a possible $250,000 maximum fine.

IRS-Criminal Investigation conducted the investigation. Assistant U.S. Attorney Quincy L. Ollison 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.

HOUSTON – A 26-year-old man has been ordered to federal prison following his conviction of conspiring to possess with the intent to distribute meth in the Houston area, announced U.S. Attorney Ryan K. Patrick.

Carlos Solorio aka Christian Hernandez, Santa Rosa, California, pleaded guilty Dec. 13, 2019.

Today, U.S. District Judge Sim Lake handed Solorio a 324-month sentence to be immediately followed by five years of supervised release. At the hearing, the court heard about Solorio’s significant activity related to drug trafficking – distribution in the Houston area, maintenance of a property to distribute the narcotics and remitting funds to Mexico in support of cartel activity. In handing down the sentence, Judge Lake noted that Solorio came to Houston from California to distribute narcotics and that his conduct warranted the significant sentence.

In May 2018, authorities conducted an undercover operation to purchase meth from a suspected narcotics distributor. The agent ordered three kilograms of the narcotics which were expected to be delivered to the Spring Branch area of Houston just north of the Katy Tollway. Solorio delivered the drugs.

Law enforcement then followed him back to his stash house. They conducted a search which resulted in the location and seizure of approximately 80 kilograms of meth.   

Solorio 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 High Intensity Drug Trafficking Areas task force conducted the investigation. Assistant U.S. Attorney Jason Corley prosecuted the case.

HOUSTON – Authorities are warning Texans of potential fraud following the landfall of Hurricane Hanna while continuing to remind the public of coronavirus-related scams, announced U.S. Attorney Ryan K. Patrick.

As residents continue to deal with the issues surrounding COVID-19, some have the added burden of surviving in the aftermath of Hurricane Hanna which made landfall in South Texas along the Coastal Bend area over the weekend.   

The U.S. Attorney’s Office works with a multitude of federal, state and local agencies to address the varied threats resulting from natural disasters such as Hurricane Hanna as well as scams related to national crises. These disasters often bring out the best in human compassion and spirit, but can also lead to unscrupulous individuals and organizations taking advantage of those in need of and/or providing government services. Examples of typical illegal activity include:

• Impersonation of federal law enforcement officials
• Identity theft
• Fraudulent claims to insurance companies and federal government
• Fraudulent activity related to donations and charitable giving
• Price gouging
• Theft, looting and other violent crime
   

“Along the Gulf Coast we are well practiced in disaster fraud,” said Patrick. “Anyone who lies, cheats or steals to receive federal benefits they would not otherwise get, will be prosecuted by my office.”

The added issues surrounding the coronavirus pandemic compounds the possible instances of fraud and other types of illegal activity. In addition to the economic payment scams previously reported, several other fraudulent schemes involve masks, personal protection equipment (PPE) and other COVID-19 related items. The public is reminded to exercise increased due diligence and caution when dealing with new suppliers or vendors, especially when using a third-party broker.  

As demand for PPE increases, scammers may advertise equipment they do not actually have in attempts to make a quick profit. These PPE products may be counterfeit and mislabeled, and some may not exist at all. Some fraudsters reach out directly to consumers and government entities through email or social media to push their products. Red flags that a seller may be engaging in a scam include:  

• Unusual payment terms
• Last-minute price changes
• Last-minute excuses for delay in shipment
• Unexplained source of a large quantity of material
• Evidence of re-packaging or mislabeling
   

Members of the public are encouraged to contact The National Center for Disaster Fraud (NCDF) to report all types of disaster and COVID-19 fraud. The Disaster Fraud Hotline is 1-866-720-5721 and is staffed by a live operator 24 hours a day, seven days a week. Members of the public can also see additional resources and information HERE, where they can also submit complaints of fraud, waste, abuse or mismanagement related to any man-made or natural disaster and criminal activity related to COVID-19.

In addition, Texans can contact the Office of the Attorney General’s toll-free complaint line at (800) 621-0508 or file a complaint online if they have encountered scams or price gouging. There are ongoing federal and state prohibitions on charging exorbitant prices for PPE during this time of national emergency. 

The NCDF is the result of a partnership between the Department of Justice and various law enforcement and regulatory agencies to form a national coordinating agency within the Criminal Division of the Department of Justice to improve and further the detection, prevention, investigation, and prosecution of fraud related to natural and man-made disasters, and to advocate for the victims of such fraud.

It was established in 2005 in the wake of Hurricane Katrina, when billions of dollars in federal disaster relief poured into the Gulf Coast region. It is the national coordinating agency for all man-made and natural disasters with Gulf Coast headquarters located in Baton Rouge, Louisiana. Since 2005, the NCDF has received over 100,000 complaints.

CORPUS CHRISTI, Texas – A 41-year-old San Antonio man has admitted to wire fraud that resulted in a loss of $1,878,615.84, announced U.S. Attorney Ryan K. Patrick.

Robert Morales Munguia Jr. knowingly submitted false work orders to his company in order to receive gifts and payments from outside vendors. He also admitted he knew the work would never be completed.

From Feb. 27, 2015, until April 12, 2018, Munguia worked as an environmental specialist at a Texas-based corporation. During that time, he conspired with outside contractors to bill for 68 false work orders that were never completed. In return, Munguia received various gifts and cash.

As a result of the scheme, the company paid almost $2 million.

Munguia was permitted to remain on bond pending sentencing, set for Nov. 6, before U.S. District Judge David Morales. At that time, Munguia faces up to 20 years in federal prison and a possible $250,000 maximum fine.

The Secret Service conducted the investigation. Assistant U.S. Attorney Jeremy C. Fugate is prosecuting the case.   

HOUSTON – The owners of several Houston-area properties have settled allegations under Title III of the Americans with Disabilities Act (ADA) to remove barriers and greatly improve physical accessibility, announced U.S. Attorney Ryan K. Patrick.

The announcement comes as the nation commemorates the 30th anniversary of the passage of the ADA on July 26.

Under the ADA, persons with disabilities shall be afforded the opportunity to participate in or benefit from the goods, services, facilities, privileges, advantages or accommodations equal to that afforded to other individuals. Title III mandates that no individual shall be discriminated against on the basis of a disability by any person who owns, leases or operates a place of public accommodation.

Strip shopping centers are places of public accommodation. As such, the owners are subject to Title III requirements.

To date, five such property owners have entered into settlements to remedy all violations the United States has identified and bring them into compliance with the ADA. Those include 11120-A North Freeway which Hana Assets Ltd. owns as well as the SS Village LLC-owned properties known as Fondren Southwest Village-East and Fondren Southwest Village-West. These actions add to the two other previous announcements regarding 5101 Bingle and 10092 Veterans Memorial Dr.

Investigators continue to conduct on-site inspections to evaluate compliance with the ADA. Those found to be in violation have the option of entering into voluntary settlement agreements in which they agree to modify their property to meet ADA requirements. Property owners who refuse to do so could face a civil lawsuit. 

The United States Attorney is authorized to commence a civil action when there is a belief discrimination exists, seeking full compliance with the ADA, including requiring the owners and operators of places of public accommodations to remedy the violations and pay civil monetary penalties.

Assistant U.S. Attorneys Keith Edward Wyatt and Annalisa Cravens are handling the matters with the assistance of Paralegal Specialist Raymond Babauta.

BROWNSVILLE, Texas – A 73-year-old resident of La Feria has been charged with making a threat to bomb the Veteran’s Administration (VA) Hospital in Harlingen, announced U.S. Attorney Ryan K. Patrick.

Dennis Deane Dailey will appear for his detention hearing Aug. 11 before U.S. Magistrate Judge Ronald Morgan.

On July 20, Dailey allegedly called the VA suicide prevention hotline expressing he was having suicidal thoughts. He claimed to be angry and that he planned to shoot employees at the VA hospital in Harlingen, according to the charges. Dailey also allegedly stated he planned to kill people between the ages of 18 and 30 because they are spreading COVID-19. The criminal complaint further alleges Dailey claimed to have “many guns and bombs” and would blow up the VA and kill whoever needed to be killed.

Federal authorities arrested Dailey July 22. He made his initial appearance the following day, at which time he was ordered into custody pending further criminal proceedings.

If convicted, Dailey faces up to 10 years in federal prison and a possible $250,000 maximum fine.

The FBI conducted the investigation. Assistant U.S. Attorney Oscar Ponce is prosecuting the case.

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

HOUSTON – Three men have been ordered to federal prison following their convictions for transporting and harboring illegal aliens in locked and boarded-up trailers in Houston, announced U.S. Attorney Ryan K. Patrick along with Special Agent in Charge Mark Dawson of Homeland Security Investigations (HSI) – Houston.

Albino Vargas-Hernandez, 49, a Mexican citizen who resided in Houston, and Rene Camacho, 47, Houston, pleaded guilty Dec. 12, 2019, to conspiracy to transport and harbor illegal aliens. A third man – Mexican national Hiram Lamarca-Gonzalez, 22, who also resided in Houston - entered his guilty plea Dec. 4, 2019.   

Today, U.S. District Judge Alfred H. Bennett handed Camacho a 36-month sentence to be immediately followed by two years of supervised release. Vargas-Hernandez and Lamarca were previously sentenced to 42 and 36 months, respectively. At the hearings, the court heard evidence as to the extensive nature of the smuggling venture which included multiple drivers to smuggle aliens, money transmitters and smuggling ledgers documenting over $1.4 million in smuggling proceeds. While imposing the sentences, Judge Bennett noted this was a serious large-scale smuggling operation. Not U.S. citizens, Vargas and Lamarca are expected to face removal proceedings following their incarceration.

At Camacho’s sentencing, the court also received evidence about a residence in North Houston purchased using $130,000 in proceeds from the conspiracy. Judge Bennett ordered the residence forfeited to the United States. Previous forfeitures include $224,774.86 in cash and cashier’s checks.

“These three individuals operated a vast human smuggling network that preyed on the desperation of foreign nationals hoping to get into the United States,” said Dawson. “In just the last year, they are responsible for smuggling more than 1,000 people into the country. With today’s sentencing, we have sent a resounding message that HSI is committed to aggressively target human smugglers and smuggling organizations who seek to undermine our nation’s immigration laws and victimize people for profit.”. 

The investigation revealed that from approximately July 9, 2018, through on or about Aug. 22, 2018, multiple suspected aliens had arrived and departed trailers in Houston, which were locked and had boards on the windows. On several occasions, Vargas left his residence, picked up illegal aliens from the stash house and delivered them to others.

Law enforcement obtained search warrants on the Vargas residence as well as the stash houses. During that time, authorities found Vargas and Camacho inside one of the trailers along with 12 undocumented aliens. The aliens identified Vargas and Camacho as leaders of the smuggling organization, in charge of documenting alien information in ledgers and collecting payments for the those smuggled into the country. They also recovered multiple firearms, “pollo” lists (alien smuggling ledgers keeping track of alien and payment information), money service wire receipts and approximately $224,000 in cash. 

Authorities also arrested Lamarca for guarding the aliens at the stash house. 

Vargas and Lamarca have been and will remain in custody. Camacho was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.

Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation. Assistant U.S. Attorney (AUSA) Richard Bennett prosecuted the case. AUSA Stephanie Bauman handled the forfeiture matters.

HOUSTON – A federal grand jury sitting in Austin has returned a six-count indictment against a 31-year-old paralegal specialist with the U.S. Attorney’s Office (USAO) for the Western District of Texas, announced U.S. Attorney Ryan K. Patrick of the Southern District of Texas.  

Jennifer Loya is charged with drug trafficking crimes, conspiring to obstruct justice and making a false statement to federal law enforcement officers.  Also charged are Roland Gustamante, 30, his wife Kimberly Loya, 27, and Nathan Lopez, 27. All are from San Antonio.

Gustamante allegedly imported drugs from Mexico, sold them in the San Antonio area and transported proceeds back to suppliers in Mexico. Kimberly Loya served as a courier for Gustamante’s drug trafficking organization, according to the indictment, while Lopez was an associate of the Gustamante drug trafficking organization. Jennifer Loya is Kimberly’s sister.

Gustamante, Lopez and Kimberly Loya are charged with conspiring to distribute heroin and meth. Gustamante is also charged with possessing with the intent to distribute meth and with engaging in an international money laundering conspiracy with Kimberly Loya.

According to the indictment, Jennifer Loya worked in the San Antonio USAO. There, she allegedly learned confidential law enforcement information related to federal drug trafficking investigations including the identity of investigation targets, cooperating witnesses and defendants as well as planned dates for charging and arresting defendants. The indictment alleges she shared this information with her sister who then relayed it to her husband. Gustamante used the information to evade law enforcement and to warn his fellow drug traffickers about impending law enforcement actions, according to the charges,

Federal authorities allegedly confronted Jennifer Loya about her activities, at which time she allegedly concealed that she had previously revealed to her sister that Gustamante was under federal investigation for drug trafficking.

All had previously been charged by criminal complaint. Gustamante was ordered into custody, while the Loya sisters were premitted release upon posting bond. They are all expected to appear again before a U.S. magistrate judge in San Abntonio the near future.

If convicted, all four face a minimum of 10 years and up to life in prison for the drug trafficking charges. In addition, Gustamante and Kimberly Loya face up to 20 years for the international money laundering conspiracy. Jennifer Loya faces up to five years for the conspiracy to obstruct justice and for the false statement charge.

The FBI, Drug Enforcement Administration and Department of Justice - Office of Inspector General conducted the investigation. Assistant U.S. Attorney Robert S. Johnson 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.

HOUSTON – Two citizens of Ukraine have admitted they conspired to smuggle and distribute counterfeit cancer and hepatitis drugs into the United States, announced U.S. Attorney Ryan K. Patrick and Acting Assistant Attorney General Brian C. Rabbitt.

Maksym Nienadov, 36, is the owner of the Ukrainian-based company Healthy Nation. He and his co-conspirator and employee - Volodymyr Nikolaienko, 33 - pleaded guilty today to conspiracy, trafficking in counterfeit drugs and smuggling goods into the United States. Nienadov also admitted to introducing misbranded medicine into the United States.   

In June 2018, undercover U.S. authorities began communicating with Nienadov about the illegal sale of Keytruda. This prompted a months-long exchange which also involved Nikolaienko and resulted in the unlawful sale of counterfeit or unapproved Keytruda, Abraxane and Epclusa. Neither Nienadov nor Nikolaienko are medical doctors, pharmacists or licensed pharmaceutical wholesalers in the United States and did not have authorization to sell the drugs.

Merck & Co. manufactures Keytruda, a medicine to treat cancer, while Gilead Sciences Inc. manufactures Epclusa, a prescription drug for the treatment of hepatitis-C. Celgene Corporation is a wholly-owned subsidiary of Bristol Myers Squibb and manufactures the oncology product Abraxane. In their legitimate form, the Food and Drug Administration (FDA) approved all three drugs for distribution in the United States.

During the undercover investigation, law enforcement received Nienadov’s banking information, which included the name “Maksim Nenadov” and his Ukrainian bank account number. Authorities transferred $2,400 to his bank account for the purchase of the purported Keytruda. Soon after, they received a shipment from “Maxim Nenadov” which contained two boxes represented to contain Keytruda. However, the items were sent to Merck for testing and determined to be counterfeit.

Authorities then negotiated the purchase of more Keytruda as well as an another medication, Abraxane. The online messaging and email conversations resulted in a $3,400 undercover payment to Nienadov for the purchase of both drugs. On July 30, 2018, “Maxim Nenadov” sent two boxes of 50 mg purported Keytruda and two boxes of supposed Abraxane 5 mg/ml to undercover agents. Merck and Celgene performed analyses and confirmed the packaging and medication to be counterfeit.

In late 2018, law enforcement also negotiated the undercover purchase of two boxes of purported Epclusa tablets from Nienadov and Nikolaienko for $6,000. Gilead identified the packaging and contents as counterfeit.

Nienadov and Nikolaienko were taken into custody April 18, 2019, after they arrived in the United States from Ukraine to discuss future unlawful shipments of pharmaceuticals.

Sentencing has been set for Nov. 4 before Chief U.S. District Judge Lee H. Rosenthal. At that time, Nienadov and Nikolaienko face up to 20 years in prison and a possible $5 million fine. Both men will remain in custody pending that hearing.

Immigration and Customs Enforcement’s Homeland Security Investigations and FDA’s Office of Criminal Investigations conducted the investigation.

Senior Trial Attorney Jeffrey Pearlman of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney Sebastian Edwards of the Southern District of Texas are prosecuting the case. Former CCIPS Senior Trial Attorney Kebharu Smith assisted in the prosecution. In addition, the Criminal Division’s Office of International Affairs provided substantial assistance.

HOUSTON – A 46-year-old Laredo man has been charged with using the personal information of deceased individuals in online loan scam, announced U.S. Attorney Ryan K. Patrick.

David Allen Parker made his initial appearance today, at which time the indictment was unsealed. He will remain in custody pending a hearing set for July 24.

The charges allege that from approximately 2018 through July 2019, Parker devised a scheme to defraud online lending institutions. Parker allegedly applied for lines of credit in excess of $33,000 using stolen personal identifying information belonging to deceased individuals. Parker submitted the loan applications containing misappropriated personal identifying information through the internet to lending institutions in New York, according to the charges.

If convicted of wire fraud, Parker faces up to 20 years in federal prison and a possible $250,000 maximum fine.

The FBI - Dallas, Abilene and San Antonio Divisions, DHS - Office of Inspector General and the Abilene Police Department conducted the investigation.

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

A Texas man was taken into custody on allegations he fraudulently obtained more than $1.1 million in Paycheck Protection Program (PPP) loans, announced Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division and U.S. Attorney Ryan K. Patrick for the Southern District of Texas.

Joshua Thomas Argires, 29, of Houston, Texas, is charged in a criminal complaint, unsealed Monday upon his arrest, with making false statements to a financial institution, wire fraud, bank fraud and engaging in unlawful monetary transactions.  He made his initial appearance Monday before U.S. Magistrate Judge Peter Bray.

Argires allegedly perpetrated a scheme to file two fraudulent loan applications seeking more than $1.1 million in forgivable loans.  The Small Business Administration (SBA) guarantees the loans for COVID-19 relief through the PPP under the Coronavirus Aid, Relief and Economic Security (CARES) Act. 

The complaint alleges Argires submitted two fraudulent PPP loan applications to federally insured banks.  One of these applications was submitted on behalf of an entity called Texas Barbecue; the other was filed on behalf of a company called Houston Landscaping.  Argires allegedly claimed these two companies had numerous employees and hundreds of thousands of dollars in payroll expenses. 

According to the complaint, neither Texas Barbecue nor Houston Landscaping has employees or pays wages consistent with the amounts claimed in the PPP loan applications.  The complaint further asserts that both of these loans were funded, but that none of the funds were used for payroll or other expenses authorized under the PPP.  Rather, the funds received on behalf of Texas Barbecue were invested in a cryptocurrency account, while the funds obtained for Houston Landscaping were held in a bank account and slowly depleted via ATM withdrawals, according to the charges.

The CARES Act is a federal law enacted March 29.  It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic.  One source of relief the CARES Act provides is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP.  In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent.  Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities.  The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.   

A federal criminal complaint is merely an accusation. A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law. 

The Federal Housing Finance Agency Office of the Inspector General (OIG), SBA OIG and U.S. Postal Inspection Service’s Houston Division conducted the investigation. Trial Attorney Timothy A. Duree of the Criminal Division’s Fraud Section and Assistant U.S. Attorney James McAlister for the Southern District of Texas are prosecuting the case.     

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

HOUSTON - A local man has been taken into custody on allegations he fraudulently obtained more than $1.1 million in Paycheck Protection Program (PPP) loans, announced U.S. Attorney Ryan K. Patrick and Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division.

Joshua Thomas Argires, 29, Houston, is charged in a criminal complaint with making false statements to a financial institution, wire fraud, bank fraud and engaging in unlawful monetary transactions.

Argires allegedly perpetrated a scheme to file two fraudulent loan applications seeking more than $1.1 million in forgivable loans. The Small Business Administration (SBA) guarantees the loans for COVID-19 relief through the PPP under the Coronavirus Aid, Relief and Economic Security (CARES) Act. 

The complaint alleges Argires submitted two fraudulent PPP loan applications to federally insured banks. One of these applications was submitted on behalf of an entity called Texas Barbecue; the other was filed on behalf of a company called Houston Landscaping. Argires allegedly claimed these two companies had numerous employees and hundreds of thousands of dollars in payroll expenses.

According to the complaint, neither Texas Barbecue nor Houston Landscaping has employees or pays wages consistent with the amounts claimed in the PPP loan applications. The complaint further asserts that both of these loans were funded, but that none of the funds were used for payroll or other expenses authorized under the PPP. Rather, the funds received on behalf of Texas Barbecue were invested in a cryptocurrency account, while the funds obtained for Houston Landscaping were held in a bank account and slowly depleted via ATM withdrawals, according to the charges.

The CARES Act is a federal law enacted March 29. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief the CARES Act provides is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.   

The Federal Housing Finance Agency - Office of the Inspector General (OIG), SBA - OIG and U.S. Postal Inspection Service’s Houston Division conducted the investigation. Trial Attorney Timothy A. Duree of the Criminal Division’s Fraud Section and Assistant U.S. Attorney James McAlister for the Southern District of Texas are prosecuting the case. 

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

A federal criminal complaint is merely an accusation. A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

HOUSTON – Two Texas men are set to appear in federal court on charges of drug distribution that resulted in an overdose, announced U.S. Attorney Ryan K. Patrick.

A federal grand jury returned the nine-count superseding indictment against Joseph Raymond Weeks, 33, Katy, and Rhett Dwayne Farrell, 40, Pinehurst, Wednesday, July 1. They are expected to appear for their arraignment before U.S. Magistrate Judge Dena H. Palermo today at 2 p.m. Also charged is Jessica Wickman-Cano, 35, Katy, who is set to appearance today.

All were initially charged by criminal complaint on related offenses. They appeared before a U.S. magistrate judge who had ordered Weeks and Farrell into custody pending further criminal proceedings. Wickman-Cano was also initially remanded to custody, but was later granted release upon posting bond.

The new charges in the superseding indictment stem from an investigation into the drug overdose of a Montgomery County man. On Feb. 25, law enforcement and emergency personnel responded to an individual who was passed out in his vehicle, according to the charges. He was allegedly unresponsive, and they had to administer NARCAN to revive him.

The indictment alleges the man had overdosed on fentanyl and had purchased it from Farrell. Weeks was allegedly the source of supply.  

The nine-count superseding indictment charges Weeks and Farrell with two counts each of conspiracy and possession with intent to distribute controlled substances which resulted in serious bodily injury. Additionally, Weeks and Wickman are charged with one count of possession with intent to distribute a controlled substance and one count of conspiracy to do the same, while Farrell is charged with two additional counts of possession with intent to distribute a controlled substance. Weeks is also charged with one count of being a felon in possession of a firearm.

If convicted, Weeks and Farrell face up to life in prison, while Wickman faces up to 20 years. All three could also be required to pay up to $1 million in fines.

Texas Department of Public Safety conducted the investigation with the assistance of the Drug Enforcement Administration, Montgomery County Narcotics Enforcement Team and police departments in Katy and Houston.  Assistant U.S. Attorneys Jimmy Leo, Michael Day and Christine Lu 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.

CORPUS CHRISTI, Texas -  The lead defendant convicted for his role in the smuggling conspiracy that left six people dead in June 2019 has been ordered to federal prison, announced U.S. Attorney Ryan K. Patrick.

Mexican citizen Ivan Dario Puga-Moreno, 31, pleaded guilty Feb. 2 to conspiracy to transport undocumented aliens into the United States causing death or serious bodily injury.

Today, U.S. District Judge Nelva Gonzales Ramos upwardly departed from the U.S. Sentencing guidelines and ordered him to serve a total of 120 months in prison. Not a U.S. citizen, he is expected to face removal proceedings following the term of imprisonment. At the hearing, the court heard Puga-Moreno was the driver of the vehicle that caused the death of six and serious bodily injury of 10 more. After the crash, Puga-Moreno refused to call 911 for assistance. Instead, he fled the scene.   

On June 5, 2019, authorities discovered a wrecked Chevrolet Suburban in a ditch in Robstown. Six people were found deceased at the scene with 10 more requiring hospitalization due to their significant injuries. Puga-Moreno had been attempting to smuggle a total of 18 undocumented immigrants with brush guide Agustin Gutierrez-Gonzalez who was from his hometown in Mexico. Further investigation revealed he had fled the scene of the accident with the assistance of Gutierrez-Gonzalez, 33, Elena Ruiz, 35, of Corpus Christi, and Mayra Chaver, 32, of Honduras.

At the time of his plea, Puga-Moreno admitted he was driving the vehicle and was evading police. He fled to Houston in an attempt to avoid arrest, but was subsequently apprehended June 6

Ruiz, Chaver and Gutierrez-Gonzalez also pleaded guilty, admitting they helped Puga-Moreno flee and evade arrest after the crash. They are set for sentencing at a later date.

Immigration and Customs Enforcement’s Homeland Security Investigations, Border Patrol, Corpus Christi Police Department and Nueces County Sherriff’s Office conducted the investigation.

Assistant U.S. Attorney Jeremy Carl Fugate is prosecuting the case.

LAREDO, Texas – A 30-year-old resident of Nuevo Laredo, Tamaulipas, Mexico, faces up to life in prison after admitting to conspiracy to import and importing more than 1,000 kilograms of marijuana, announced U.S. Attorney Ryan K. Patrick.

Ruben Maldonado-Espino drove a semi-truck and trailer through the World Trade Bridge near Laredo on May 7. Authorities conducted an x-ray examination of the vehicle which revealed anomalies in the trailer.

Law enforcement began to open the doors, at which time Maldonado-Espino admitted he knew drugs were in the trailer. He claimed a Mexican drug cartel was holding his wife hostage and forced him to smuggle the narcotics.

However, authorities contacted his wife who appeared to be calm and not under distress. Maldonado-Espino eventually admitted the story was a lie he was told to give to law enforcement.

The 198 bundles of marijuana found in the trailer weighed approximately 4,601 pounds with an estimated street value of $875,000.

U.S. District Judge Marina Garcia Marmolejo will impose sentencing Oct. 28. At that time, Maldonado-Espino faces a minimum of 10 years and up to life in federal prison. He has been and will remain in custody pending that hearing.

Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with the assistance of Customs and Border Protection. Assistant U.S. Attorney Paul Harrison is prosecuting the case.

CORPUS CHRISTI, Texas – A 31-year-old Corpus Christi man has been ordered to federal prison for producing child pornography via social media, announced U.S. Attorney Ryan K. Patrick.

Lucas Antonio Nord pleaded guilty Nov. 5, 2019.

Today, U.S. District Judge Nelva Gonzales Ramos ordered Nord to serve a 200-month sentence. At the hearing, the court heard how Nord used social media to contact minor children for the purposes of having sexual encounters and for requesting nude images of them. Before handing down the sentence, the court heard about two additional victims in other States. 

Nord was further ordered to pay $3000 in restitution to a known victim and will serve the rest of his life on supervised release following completion of his prison term, during which time he will have to comply with numerous requirements designed to restrict his access to children and the internet. He will also be ordered to register as a sex offender. 

In April 2019, law enforcement learned Nord had contact with a 14-year-old minor living in Florida. He had asked the child to send him photographs of his genitalia via social media messaging.

Nord told authorities he also had actual physical sexual contact with at least two children and has attempted to solicit more than 50 boys on various social media platforms.

Nord sent the children photographs and videos of his own genitalia and sexual acts as well as videos containing commercially-produced pornography.

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.

The Corpus Christi Police Department – Internet Crimes Against Children Task Force and Immigration and Custom’s Enforcement’s Homeland Security Investigations conducted the investigation.

Assistant U.S. Attorney Brittany L. Jensen 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 tab on that page.

LAREDO, Texas – A 30-year-old Mexican national has been ordered to federal prison for his involvement in a conspiracy to transport undocumented aliens, announced U.S. Attorney Ryan K. Patrick.

Ruben Ernesto Mendoza-Zapata pleaded guilty Jan. 7.

Today, U.S. District Judge Marina Garcia Marmolejo handed Mendoza-Zapata a 41-month term of imprisonment. Not a U.S. citizen, he is expected to face removal proceedings after serving his sentence.

On Oct. 7, 2019, authorities observed a group of individuals crossing from the Mexican side of Falcon Lake via boat and entering a red Ford Explorer in the United States. They located the SUV and attempted to get behind it. However, the driver - later identified as Mendoza-Zapata - fled the scene at a high rate of speed. During the pursuit, Mendoza-Zapata tried rounding a curve, but rolled the vehicle several times.

Law enforcement secured the scene and rescued the occupants, one of whom was pinned underneath the vehicle. At the time of the rollover, a 6-year-old boy was also in the SUV.

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

Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with the assistance of Border Patrol. Assistant U.S. Attorney David Fawcett prosecuted the case.

LAREDO, Texas – A federal grand jury has returned an indictment against a 19-year-old Laredo resident for illegally possessing a firearm while under an active domestic violence protection order and possessing a firearm while under indictment, announced U.S. Attorney Ryan K. Patrick.

Mario Alberto Salazar is expected to appear for his arraignment next week before a U.S. magistrate judge in Laredo.

The criminal complaint originally filed in the case alleges Salazar was under an active protective order which prohibited him from possessing a firearm.  However, he allegedly assaulted a woman March 31, 2020 – striking her in the left arm and hip with the firearm.  The charges also allege he pointed a firearm at her feet while threatening to shoot her.

According to the allegations, authorities test fired the weapon and entered the casings into the National Integrated Ballistic Information Network (NIBIN) which led to a match to a shooting incident in Laredo on March 23. On that date, Salazar allegedly discharged a firearm at a vehicle as it was driving through an intersection.  He was still subject to the domestic violence order at that time, according to the charges.

“NIBIN is the only national network that allows for the capture and comparison of ballistic evidence to aid in solving and preventing violent crimes involving firearms,” said Special Agent in Charge Fred Milanowski of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).

The criminal complaint also alleges Salazar is under indictment in Webb County for engaging in organized criminal activity and unlawful restraint and is prohibited under federal law from possessing a firearm.

If convicted of either charge, Salazar faces up to 10 years in federal prison and a possible $250,000 maximum fine.

ATF conducted the investigation with the assistance of the Laredo Police Department. Assistant U.S. Attorney April Ayers-Perez 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.

HOUSTON – Advanced Cardiovascular Care Center P.A. and its owner and administrator have agreed to pay $400,000 to resolve allegations they violated the False Claims Act (FCA), announced U.S. Attorney Ryan K. Patrick.

Owner Dr. Annie T. Varughese, 57, and administrator Babu Varughese, 64, both of Spring, conducted business in three clinics located in Houston, Conroe and The Woodlands.

From June 4, 2013, through June 4, 2016, the company submitted claims to Medicare for cardiology services. These included cardiac external counterpulsation treatments, transthoracic echocardiography studies and duplex scans that were not reasonable and medically necessary. Therefore, they failed to meet the Medicare coverage and documentation requirements.

Further, patient files lacked documentation that Varughese directly supervised the cardiology services as Medicare requires. The company billed Medicare for services under Varughese’s provider number when she was not in the office and, at times, not even in the United States.

“Putting financial gain ahead of medical necessity undermines the integrity of the Medicare program,” said Special Agent in Charge Miranda Bennett of the Department of Health and Human Services – Office of Inspector General (DHHS-OIG).  “We will continue investigate and hold accountable those who submit false claims to federal health care programs.”

“The largest area of fraud committed against the federal government today is by unethical healthcare providers who inflate or fabricate Medicare or Medicaid bills,” said Special Agent in Charge Perrye K. Turner of the FBI. “Billing Medicare for services that are not necessary and/or not provided constitutes fraud. American taxpayers are the ones who ultimately bear the financial burden created by this, as healthcare fraud translates into higher premiums and out-of-pocket expenses for consumers. We ask for the public's help in reporting and exposing dishonest healthcare providers."

The investigation began in 2016 after a former cardiologist filed a sealed lawsuit under the qui tam provisions of the FCA. It allows private citizens with knowledge of fraud to bring a lawsuit on behalf of the United States. They may be entitled to a share of the proceeds of the action or any settlement.

DHHS-OIG and FBI conducted the investigation. Assistant U.S. Attorney Julie Redlinger handled the matter.

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

LAREDO, Texas – A 48-year-old resident of Nuevo Laredo, Mexico, has been ordered to federal prison for conspiracy to possess with intent to distribute 32 kilograms of meth, announced U.S. Attorney Ryan K. Patrick.

Ramces Chavez-Gomez, pleaded guilty Jan. 7.

Today, U.S. District Judge Marina Garcia Marmolejo ordered Chavez-Gomez to serve a total of 72 months in prison. Not a U.S. citizen, he is expected to face deportation proceedings following his sentence. At the hearing, the court considered statements regarding Chavez-Gomez’s training and practice as a doctor in Mexico. In handing down the sentence, the court noted it was a shame Chavez-Gomez was trained to help and heal people, yet chose to bring poison into our country.

On Oct. 5, 2019, Chavez-Gomez attempted to drive his SUV through the Laredo North Border Patrol (BP) checkpoint on Interstate 35. During initial inspection, a K-9 alerted to the presence of narcotics in the rear of the vehicle. An x-ray scan then revealed a hidden compartment near its rear seats.

Authorities further inspected the vehicle and found the compartment under the carpeting in the cargo area. There, they found 20 bundles of meth that weighed approximately 32 kilograms.

The drugs have an estimated street value of more than $250,000.

Chavez-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.

Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with the assistance of Border Patrol. Assistant U.S. Attorney Paul Harrison prosecuted the case.

LAREDO, Texas – A 32-year-old Laredo resident has been ordered to federal prison following his conviction for conspiring with intent to distribute more than 100 kilograms of marijuana, announced U.S. Attorney Ryan K. Patrick. 

Agustin Martinez III pleaded guilty April 2, 2019. 

Today, U.S. District Judge Marina Garcia Marmolejo sentenced Martinez to serve 60 months in federal prison to be immediately followed by three years of supervised release. He was further ordered to pay $2400 in restitution. In handing down the sentence, the court noted Martinez had created a dangerous risk to the community by engaging in a high speed chase.

On Jan. 12, 2019, Martinez planned to transport narcotics in a red GMC pickup truck. Authorities noticed the suspicious vehicle and immediately attempted to conduct a traffic stop after they spotted it leaving a Laredo ranch.

However, Martinez did not pull over which lead to a high-speed chase. It ended after he crashed into two tractor-trailers in Laredo.

Law enforcement immediately took him into custody. During the search of the vehicle, authorities found approximately 315 kilograms of marijuana with a value of $150,000.

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.

The Drug Enforcement Administration conducted the investigation with the assistance of Border Patrol. Assistant U.S. Attorney Francisco J. Rodriguez is prosecuting the case.

HOUSTON – A 54-year-old anesthesiologist from Katy has paid $100,000 to resolve allegations that he falsely billed Medicare for the use of acupuncture devices, announced U.S. Attorney Ryan K. Patrick. 

From Nov. 1, 2018, to March 31, 2019, Dr. Jaime Robledo billed Medicare for the implantation of neurostimulator electrodes - a surgical procedure that usually requires use of an operating room. Medicare pays thousands of dollars for this procedure.

However, Robledo did not perform these surgeries. Instead, he applied a device used for electro-acupuncture. This procedure involves inserting needles into patients’ ears with the neurostimulator taped behind them with an adhesive.  

Medicare does not reimburse for electro-acupuncture devices as implantable neurostimulators.

“To maintain the trust of beneficiaries in their care, it is imperative that medical professionals bill accurately for the services provided,” said Special Agent in Charge Miranda Bennett of the Department of Health and Human Services - Office of Inspector General (DHHS-OIG). “We will continue working with our law enforcement partners to hold accountable those who seek to enrich themselves by submitting false claims to federal health programs.”

DHHS-OIG and the Centers for Medicare and Medicaid Services conducted the investigation with the assistance of Qlarant, the Unified Program Integrity Contractor for Medicare. Assistant U.S. Attorney Brad Gray handled the matter.

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

LAREDO, Texas – A 48-year-old Matamoros, Mexico, resident has been ordered to federal prison following his conviction of conspiracy to import 10.2 kilograms of meth into the country, announced U.S. Attorney Ryan K. Patrick.

J. Guadalupe Martinez-Montelongo pleaded guilty March 3.

Today, U.S. District Judge Marina Garcia Marmolejo ordered Martinez-Montelongo to serve a total of 63 months in prison. Not a U.S. citizen, he is expected to face deportation proceedings following his incarceration.

On Dec. 10, 2019 Martinez-Montelongo applied for entry into the United States at the Lincoln Juarez Bridge. Authorities conducted an investigation of the SUV he was driving, at which time a K-9 alerted to the presence of narcotics in the vehicle’s doors. An x-ray scan further revealed bundles of narcotics stuffed behind the door panels which field tested positive for meth.

The bundles weighed approximately 23 pounds and had a street value of approximately $73,000.

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

Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with the assistance of Customs and Border Protection. Assistant U.S. Attorney Paul Harrison prosecuted the case.

CORPUS CHRISTI, Texas – A 45-year-old man has been indicted on charges of online solicitation of a minor, travel with intent to engage in illicit sexual conduct and transfer of obscene materials to a minor, announced U.S. Attorney Ryan K. Patrick.

A Corpus Christi grand jury returned an indictment against Ehab Sadeek today. He resided in Winchester, Massachusetts, but is an Egyptian citizen with no legal status in the United States. He was initially charged by criminal complaint and made an initial appearance before U.S. Magistrate Judge Julie K. Hampton. At that time, the court found probable cause that Sadeek committed the alleged offenses and ordered him into custody. He will appear again in federal court in the near future on the indictment.  

The charges allege Sadeek used interstate and foreign commerce to knowingly persuade, induce, entice and coerce a minor victim in Live Oak County to engage in sexual activity. From May 7 to May 26, Sadeek allegedly transferred obscene material to the same victim, knowing she was less than 16 years of age. Sadeek traveled from Massachusetts to Texas with the intent to commit sexual offenses, according to the allegations.

The George West Police Department, Live Oak County Sheriff’s Office, Texas Department of Public Safety and Immigration and Custom’s Enforcement’s Homeland Security Investigations conducted the investigation.

This case, prosecuted by Assistant U.S. Attorney Sara Popejoy, 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 – The Department of Justice (DOJ) has not issued any notice or other public information regarding the use of face masks and the Americans with Disabilities Act (ADA), announced U.S. Attorney Ryan K. Patrick.

Inaccurate flyers or other postings have been circulating on the web and via social media channels regarding the use of face masks and the ADA due to the COVID-19 pandemic. Many of these notices include use of the DOJ seal and ADA phone number.  

However, DOJ did not issue and does not endorse them in any way. The public should not rely on the information contained in these postings.

The ADA does not provide a blanket exemption that relieves people with disabilities from complying with legitimate health and safety rules.

DOJ previously issued an alert regarding the fraudulent flyers. The public can visit ADA.gov or call the ADA Information Line at 800.514.0301 (voice) and 800.514.0383 (TTY) for more information.

A Houston pharmacist and his wife were sentenced today for their roles in an approximately $21.8 million Department of Labor (DOL) - Office of Workers Compensation Programs and Federal Employees Compensation Act fraud scheme.

George Philip Tompkins, 75, of Houston, Texas, the self-proclaimed “Compound King” and former owner of Piney Point Pharmacy, was sentenced to 10 years in prison. Marene Kathryn Tompkins, 68, also of Houston, the former vice president of Piney Point Pharmacy, was sentenced to 30 days of home confinement and three years of supervised release. Both were sentenced by U.S. District Judge Sim Lake of the Southern District of Texas, who presided over the trial of George Thompkins and the guilty plea of Marene Tompkins.  Judge Lake also ordered George Tompkins to pay $12,300,381.36 in restitution (and forfeiture) and Marene Tompkins to pay $950,745.10 in restitution (and forfeiture).

On March 10, 2020, after a six-day trial, George Tompkins was convicted by a jury of conspiracy to pay and receive kickbacks, conspiracy to commit health care fraud, conspiracy to commit money laundering, 11 counts of health care fraud, and three counts of wire fraud. Kathryn Tompkins pleaded guilty on Jan. 3, 2020, to one count of conspiracy to pay kickbacks.

According to the evidence at trial, George Tompkins and others billed the DOL approximately $21.8 million for medically unnecessary compound gels and creams that were predicated on illegal kickback payments. George Tompkins and Anoop Chaturvedi, 48, a legal permanent resident from India who remains a fugitive on related charges, created the scheme to generate compounded pain cream prescriptions and bill health care programs for injured state and federal employees. George Tompkins and Chaturvedi used separate entities—including George Tompkins’s company, Wellington Advisors—to receive and launder the proceeds of their crimes.  Further evidence presented at trial showed that George Tompkins sought to disguise illicit kickback payments as legitimate “marketing” expenses and continued to ship patients compound gels and creams even after patients repeatedly complained they did not want them.     

Marene Tompkins pleaded guilty before trial.  As part of her guilty plea, she admitted that she conspired with her husband and others to pay illegal kickbacks as part of the scheme. 

George and Marene Tompkins were charged in a superseding indictment in November 2018 along with Chaturvedi. Chaturvedi is considered a fugitive and a warrant remains outstanding for his arrest in connection with the charges. Anyone with information about his whereabouts is asked to contact the U.S. Postal Service - Office of Inspector General (USPS-OIG) at 1-888-877-7644.

A federal criminal indictment is merely an accusation. Chaturvedi is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

USPS-OIG, DOL-OIG, IRS-Criminal Investigation, U.S. Department of Homeland Security-OIG, and Department of Veterans Affairs-OIG, conducted the investigation. Assistant U.S. Attorney Julie Redlinger charged the case and, with Trial Attorneys Leslie Garthwaite and Devon Helfmeyer of the Criminal Division’s Fraud Section, provided substantial assistance in its prosecution. Trial Attorneys Drew Pennebaker and Sara Clingan of the Fraud Section tried the case and continue to prosecute it.

The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion. In addition, the Health and Human Services (HHS) Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

A Houston funeral director has been taken into custody on allegations he fraudulently sought over $13 million in Paycheck Protection Program (PPP) loans.

Jase DePaul Gautreaux, aka Jase Dixon, 38, is charged in a criminal complaint, unsealed today upon his arrest, with making false statements to a financial institution, wire fraud, bank fraud and engaging in unlawful monetary transactions. He is expected to make his initial appearance before U.S. Magistrate Frances H. Stacy in Houston at 2 p.m. CDT today.

Gautreaux allegedly perpetrated a scheme to file fraudulent loan applications seeking more than $13 million in forgivable loans. The Small Business Administration (SBA) guarantees the loans for COVID-19 relief through the PPP under the Coronavirus Aid, Relief and Economic Security (CARES) Act. 

The complaint alleges Gautreaux allegedly submitted several fraudulent PPP loan applications to federally insured banks, including applications on behalf of a business that did not exist and other applications on behalf of a business with which he had no affiliation. In these applications, Gautreaux allegedly falsified his identity, misrepresented the number of employees and payroll expenses of the putative companies and made numerous other inaccurate statements. According to the complaint, Gautreaux also submitted falsified tax documents and bank account information in support of these applications. He submitted fraudulent applications for over $13 million in PPP funds and ultimately received over $1.6 million in PPP funds, according to the charges.  

The CARES Act is a federal law enacted March 29. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP.  In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.   

A federal criminal complaint is merely an accusation. A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law. 

The Office of the Inspector General (OIG) - Federal Housing Finance Agency, Federal Deposit Insurance Corporation – OIG, SBA – OIG and U.S. Postal Inspection Service - Houston Division conducted the investigation. Trial Attorney Timothy A. Duree of the Criminal Division’s Fraud Section and Assistant U.S. Attorney James McAlister of the U.S. Attorney’s Office for the Southern District of Texas are prosecuting the case. The case team would also like to recognize the invaluable assistance of the Houston Police Department.     

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 Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

HOUSTON - A funeral home operator has been taken into custody on allegations he fraudulently sought over $13 million in Paycheck Protection Program (PPP) loans.

Jase DePaul Gautreaux aka Jase Dixon, 38, is charged in a criminal complaint, unsealed today upon his arrest, with making false statements to a financial institution, wire fraud, bank fraud and engaging in unlawful monetary transactions. He is expected to make his initial appearance before U.S. Magistrate Judge Frances H. Stacy in Houston at 2 p.m. today.

Gautreaux allegedly perpetrated a scheme to file fraudulent loan applications seeking more than $13 million in forgivable loans. The Small Business Administration (SBA) guarantees the loans for COVID-19 relief through the Paycheck Protection Program under the Coronavirus Aid, Relief and Economic Security (CARES) Act. 

The complaint alleges Gautreaux allegedly submitted several fraudulent PPP loan applications to federally insured banks, including applications on behalf of a business that did not exist and other applications on behalf of a business with which he had no affiliation. In these applications, Gautreaux allegedly falsified his identity, misrepresented the number of employees and payroll expenses of the putative companies and made numerous other inaccurate statements. According to the complaint, Gautreaux also submitted falsified tax documents and bank account information in support of these applications. He submitted fraudulent applications for over $13 million in PPP funds and ultimately received over $1.6 million in PPP funds, according to the charges.  

The CARES Act is a federal law enacted March 29. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief the CARES Act provides is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP.  In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, mortgage interest, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.   

The Office of the Inspector General (OIG) - Federal Housing Finance Agency, Federal Deposit Insurance Corporation – OIG, SBA – OIG and U.S. Postal Inspection Service - Houston Division conducted the investigation with the assistance of the Houston Police Department.  

Trial Attorney Timothy A. Duree of the Criminal Division’s Fraud Section is prosecuting the case with the assistance of Assistant U.S. Attorney James McAlister.

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 Hotline at 866-720-5721 or via the NCDF Web Complaint Form.

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency HERE.

A federal criminal complaint is merely an accusation. A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

CORPUS CHRISTI, Texas – A former Coahuila, Mexico, governor has entered a guilty plea for his role in a money laundering scheme that includes offenses against a foreign nation involving bribery of a public official, announced U.S. Attorney Ryan K. Patrick.

Jorge Juan Torres-Lopez, 66, admitted to conducting financial transactions in the United States to conceal the bribes he received here in return for road-building contracts for the State of Coahuila.

Torres-Lopez worked for the Mexican government from 1994 to 2011. His roles included general director of Promotion and Development while secretary of Finance for the state of Coahuila, municipal president of Saltillo as well as interim governor of Coahuila. In approximately December 2005, Hector Javier Villarreal-Hernandez was appointed as undersecretary of Program and Budget for the state of Coahuila. At the time, Torres-Lopez was his supervisor. In July 2008, Villarreal-Hernandez was appointed as secretary of Finance for Coahuila, where he remained until his resignation in August 2011.

As part of his plea, Torres-Lopez agreed to forfeit a piece of property in the United States associated with the payments.

U.S. District Judge Nelva Gonzalez Ramos set sentencing for Sept. 10. At that time, Torres-Lopez faces up to 20 years in federal prison and a possible $500,000 fine, twice the value of the monetary instrument or funds involved in the transaction or both.

Torres-Lopez was taken into custody in Mexico on Feb. 5, 2019, where he remained until his extradition to the United States Oct. 29, 2019. He will remain in custody pending his sentencing.

Villarreal-Hernandez, 49, of Saltillo, Coahuilla, Mexico, has also been convicted in the Southern and Western Districts of Texas for money laundering offenses and is also awaiting sentencing.

Multiple agencies conducted the Organized Crime Drug Enforcement Task Force investigation dubbed Operation Politico Junction to include Drug Enforcement Administration, IRS - Criminal Investigation, Immigration and Customs Enforcement’s Homeland Security Investigations, FBI and U.S. Marshals Service.

The Prosecutor General of the Republic of Mexico provided significant assistance. The Department of Justice’s Office of International Affairs of the Department’s Criminal Division also assisted.

Assistant U.S. Attorneys Jon Muschenheim and Lance A. Watt are prosecuting the case.

HOUSTON – A 32-year-old resident of Austin has been taken into custody on charges of civil disorder, announced U.S. Attorney Ryan K. Patrick.

Travis Glendon Martin III is set to make his appearance at 2:00 p.m. today before U.S. Magistrate Judge Dena H. Palermo. He is charged in a criminal complaint filed June 5.

According to the charges, authorities had been engaged in the lawful performance of their duties May 29 during a protest in Houston related to the death of George Floyd. The protest allegedly involved multiple acts of violence at the hands of many which resulted in damage to property and injury to peaceful protesters and others.

Some law enforcement personnel were assigned to control pedestrian traffic and prevent their entrance to Interstate-45, according to the charges. During this time, Martin allegedly lowered his shoulder and rammed one of the officers in an attempt to break through the police line and enter the interstate.

Officers attempted to gain control of Martin who had been exhibiting passive resistance by placing his arms underneath his body as he lay on the ground, according to the complaint. Martin’s actions allegedly impeded law enforcement as another individual was able to remove a traffic cone and throw it at the officers while they attempted to take Martin into custody.

The complaint further alleges that Martin’s actions emboldened others to commit similar acts. During his arrest, yet another person then threw traffic cones at the officers which further obstructed, delayed and adversely affected commerce up the ramp and onto the interstate, according to the charges.

Civil disorder involves the commission of any act or attempt to obstruct, impede or interfere with a fireman or law enforcement officer lawfully engaged in the performance of official duties which adversely affects commerce.

If convicted, Martin faces up to five years in federal prison and a possible $250,000 fine.

The FBI conducted the investigation. Assistant U.S. Attorney Steven Schammel is prosecuting the case.

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

LAREDO, Texas – A 19-year-old man has been taken into custody for illegally possessing a firearm while under an active domestic violence protection order and possessing a firearm while under indictment, announced U.S. Attorney Ryan K. Patrick.

Mario Salazar is expected to make a virtual initial appearance before U.S. Magistrate Sam Sheldon at 9 a.m. today.

The criminal complaint, filed under seal June 4 and unsealed yesterday upon his arrest, alleges that Salazar had a domestic violence order on file which prohibited him from possessing a firearm. However, he allegedly assaulted a woman March 31 – striking her in the left arm and hip with the firearm. The charges also allege he pointed a firearm at her feet while threatening to shoot her.

According to the criminal complaint, the firearm also matches a shooting incident in Laredo April 23. On that date, Salazar allegedly discharged a firearm at a vehicle as it was driving through an intersection. He was still subject to the domestic violence order at that time, according to the complaint.

Salazar is also currently under indictment in Webb County for engaging in organized criminal activity and unlawful restraint, according to the charges, and is prohibited from possessing a firearm.

If convicted of either charge, Salazar faces up to 10 years in federal prison and a possible $250,000 maximum fine.

The Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation with the assistance of the Laredo Police Department. Assistant U.S. Attorney April Ayers-Perez is prosecuting the case.

A criminal complaint 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 48-year-old Beeville man has been ordered to federal prison following his conviction for destruction of U.S. government property and possession of a stolen firearm, announced U.S. Attorney Ryan K. Patrick.

Brian Dale Robinson pleaded guilty Nov. 21, 2019.

Today, U.S. District Judge Nelva Gonzales Ramos ordered Robinson to prison for 33 months to be immediately followed by three years of supervised release. He was further ordered to pay restitution of more than $12,000 to Naval Air Station (NAS) in Corpus Christi. In handing down the sentence, the court noted the dangerousness of Robinson’s conduct.

At the time of his plea, Robinson admitted he knew the firearm in his possession was stolen and he intentionally damaged federal property. He had hit a barricade located at the North gate entrance of NAS - Corpus Christi.

On Oct. 7, 2019, Robinson was at a gas station in Beeville when he spotted a Dodge Ram 3500 pickup truck with the engine running. He then entered that vehicle without permission and drove straight to Corpus Christi. There, he approached the NAS and attempted to gain unauthorized access to the base by crashing through the gate. However, the vehicle became inoperable after he hit the barricade.

Robinson exited the pickup truck and fled on foot into the base with a handgun he had stolen from the vehicle and hid next to a dumpster. He was located by base security personnel who immediately arrested him. Robinson claimed he had suicidal thoughts. However, he opted to drop the weapon so no one else would be hurt. Following his arrest, they located an HS Produkt, model XDM-9, 9mm pistol loaded with a full magazine. 

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

The Naval Criminal Investigative Service and Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant U.S. Attorney Robert D. Thorpe Jr. prosecuted the case.   

LAREDO, Texas - A 30-year-old Zapata man has entered a guilty plea to conspiracy to transport aliens within the country, announced U.S. Attorney Ryan K. Patrick.

On Jan. 21, Leonidas Navarro drove a semi-truck and trailer combination through the Laredo North Border Patrol checkpoint on Interstate 35. Upon inspection, a K-9 alerted to the presence of contraband in the trailer. Navarro also could not provide a bill of lading for the goods he was supposedly transporting. He was then referred to secondary inspection.

However, rather than complying, Navarro increased his speed and drove through a fence and into a field before he ultimately crashed. He jumped out of the truck and attempted to flee, but was soon captured.

Authorities found a total of 63 aliens that had been hidden inside the truck. None were seriously injured during the crash.

U.S. District Court Judge Diana Saldaňa will impose sentencing at a later date, at which time Navarro faces up to 10 years in federal prison.

He has been and will remain in custody pending that hearing.

Immigration and Custom Enforcement’s Homeland Security Investigations conducted the investigation with the assistance of Border Patrol. Assistant U.S. Attorney Paul Harrison is prosecuting the case.

LAREDO, Texas – A 21-year-old legal permanent resident from Laredo has pleaded guilty to conspiracy to transport undocumented aliens from Guatemala, announced U.S. Attorney Ryan K. Patrick.

Ivan Duran Gachuzo admitted he was transporting illegal aliens to San Antonio for $4,000.

On Jan. 20 at approximately 5:20 p.m., law enforcement attempted to perform a traffic stop on a Chevrolet truck at the Moose Ranch near Freer. Gachuzo was driving. Numerous individuals jumped out of the truck and absconded into the brush. Authorities apprehended three and determined them to be citizens of Guatemala.

Gachuzo then accelerated towards an official vehicle, nearly causing a crash. He  continued to flee from law enforcement for approximately 90 miles through four different counties. He attempted to enter Mexico at the Falcon Port of Entry in Roma where he was ultimately apprehended.  

Gachuzo admitted he swerved toward the agent’s vehicle because he wanted to get away. He was asked if he knew he could have hurt or killed someone. “I was aware that could happen,” Gachuzo replied.  

U.S. District Judge Diana Saldana will impose sentencing at a later date, at which time Gachuzo faces up to 10 years in prison.

He has been and will remain in custody pending sentencing.

Border Patrol conducted the investigation with assistance from Customs and Border Protection, Texas Department of Public Safety and the Jim Hogg County Sheriff’s Office. Assistant U.S. Attorney Jennifer Day is prosecuting the case.

HOUSTON – A 65-year-old Texas man has pleaded guilty to wire fraud in his connection to stealing millions from a Deer Park oil corporation, announced U.S. Attorney Ryan K. Patrick.

James Arthur Camp, New Braunfels, admitted that from April 1998 through November 2017, he defrauded Lubrizol Corporation of $9,256,712.54. During the scheme, Camp submitted fraudulent invoices for laboratory services from two companies he owned, knowing they had not been performed.

Specifically, Camp admitted that one of those fraudulent laboratory charges included one from his company Bay Area Analytical in the amount of $2,774.06. Camp inputted the data into Lubrizol’s accounting system, causing it to be transmitted electronically from Deer Park to company headquarters in Wycliffe, Ohio. That fraudulent charge was then bundled with other similar charges and paid via electronic funds transfer to Bay Area Analytical’s bank account at J P Morgan Chase Bank in the amount of $12,294.23.

U.S. District Judge Nancy Atlas accepted the plea and set sentencing for August. At that time, Camp faces up to 20 years in federal prison and a possible $250,000 maximum fine.

The FBI conducted the investigation. Assistant U.S. Attorney John Braddock is prosecuting the case.