Western District of Texas

In Midland today, U.S. District Judge Robert A. Junell sentenced 50-year-old former Denver City (TX) councilman Joe Anthony Kay to five years in federal prison for his role in a Midland-based heroin and methamphetamine distribution ring, announced Acting United States Attorney Richard L. Durbin, Jr., Midland Police Chief Price Robinson and Texas Department of Public Safety Director Steve McCraw.

In addition to the prison term, Judge Junell ordered that Kay be placed under supervised release for a period of five years after completing his prison term.

On August 31, 2014, state and local authorities arrested Kay based on a federal grand jury indictment charging him with one count of conspiracy to possess with intent to distribute controlled substances.  Kay pleaded guilty to the charge on September 16, 2014.  By pleading guilty, Kay admitted that from June 2010 to April 2014, he conspired with others to distribute narcotics in the Midland, Odessa, and Denver City areas.  According to court records, Kay conspired to distribute 20 kilograms of cocaine, 2 kilograms of heroin, 1 kilogram of methamphetamine, and 100 pounds of marijuana.

Kay is the last of seven defendants to be convicted and sentenced for their roles in this drug trafficking scheme.  Yesterday, Judge Junell sentenced drug supplier Luis Jose Tarango Terrazas, age 51, of Fabens, TX, to 70 months imprisonment.  Last month, Judge Junell sentenced 42–year-old Michael Alexander Lozano of Denver City, and 46–year-old William Ray Warren of Midland, each to ten years imprisonment; 30-year-old Cameron Edward Gee of Midland, to 71 months imprisonment; 31-year-old Quentin Zachery Bailey of Odessa, to 46 months imprisonment; and, 24-year-old Merin James McCulley of Seagraves, TX, to two years imprisonment.

This investigation was conducted by the Midland Police Department together with the Texas Department of Public Safety.  Assistant United States Attorney Austin Berry prosecuted this case on behalf of the Government.

Forest Park Medical Center, LLC (“FPMC”), a physician-owned hospital located in Dallas, Texas, will pay $215,000 under a civil settlement with the United States Department of Justice, announced Acting United States Attorney Richard L. Durbin, Jr.  The settlement resolves allegations that the hospital paid kickbacks in exchange for referrals of patients covered by the federal workers’ compensation program, known as FECA.

FECA, a federal health care program administered by the United States Department of Labor (“DOL”), provides workers’ compensation benefits to federal workers who suffer job-related injuries.  The program covers roughly 3 million federal civilian and postal employees.  Benefits include payment of a covered worker’s medical and rehabilitation expenses.  DOL uses federal funds to reimburse health care providers that treat injured workers covered by FECA.

The Department of Justice investigated whether FPMC violated the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), and submitted false claims for reimbursement to the FECA program in violation of the False Claims Act, 31 U.S.C. §§ 3729-3733.  Between August 1, 2011 and March 1, 2012, FPMC caused payments to be made to individuals and entities located in the Western District of Texas for “marketing” and “management” services.  The United States contends that these payments were, in reality, unlawful kickbacks made in exchange for the referral of patients covered by FECA in violation of the Anti-Kickback Statute.  The United States further contends that, by billing the FECA program for services rendered to patients whose referrals were secured through kickbacks, FPMC submitted false claims for payment to the DOL in violation of the False Claims Act, which provides for treble damages and civil penalties.

Under the settlement announced today, FPMC will pay $215,000 to resolve the hospital’s potential False Claims Act liability.  The settlement, which follows an earlier resolution reached with the United States Attorney’s Office for the Northern District of Texas regarding claims submitted to the TRICARE program, is not an admission of liability by FPMC or its affiliates.  FPMC cooperated with the government’s investigation.

Acting United States Attorney Durbin commended the efforts of the investigating agencies, including the United States Postal Service -- Office of the Inspector General, United States Army Criminal Investigation Division -- Major Procurement Fraud Unit, Federal Bureau of Investigation, and the United States Department of Labor -- Office of the Inspector General.  Assistant United States Attorney John J. LoCurto and Auditor Jamie Cole, CPA handled the investigation for the United States Attorney’s Office.

In San Antonio today, a federal jury convicted 36-year-old Agustin Sergio Deleon Garza for his role in the kidnapping of a Mexican businessman in December 2013 announced Acting United States Attorney Richard L. Durbin, Jr., Special Agent in Charge Christopher Combs of the FBI’s San Antonio Division and Special Agent in Charge Joseph M. Arabit of the DEA’s Houston Division.

The jury found Deleon Garza guilty of one count of conspiracy to kidnap; one count of aiding and abetting kidnapping; two counts of receipt of ransom money; one count of interstate communication of ransom; one count of conspiracy to commit money laundering; and, one count of aiding and abetting money laundering.

Evidence presented during trial revealed that on December 27, 2013, Jorge Luis Martin Cavazos Cantu was kidnapped from his Monterrey, Mexico residence by several men.  While Cantu was in the custody of his abductors in Mexico, Deleon Garza placed several phone calls from Bexar County to Cantu’s family seeking ransom. In each call, Deleon Garza used a cellphone app which disguised his voice and his location.  Cantu was released on January 29, 2014, after a $75,000 ransom was paid.

Deleon Garza remains in federal custody pending sentencing.  He faces up to life in federal prison when he is sentenced on March 30, 2015, by visiting Senior U.S. District Judge Royce Lamberth in San Antonio.

This case was investigated by special agents with the Federal Bureau of Investigation (FBI) and the Drug Enforcement Administration (DEA) in San Antonio and in Mexico (Monterrey and Mexico City) in cooperation with the State of Nuevo León anti kidnapping unit and the attorney general's office in Monterrey.  Assistant United States Attorney Erica Benites Giese is prosecuting this case on behalf of the Government.

In San Antonio today, U.S. District Judge Orlando Garcia sentenced 43-year-old Raul Salazar to 70 months in federal prison followed by a 20 years of supervised release for receipt of child pornography announced Acting United States Attorney Richard L. Durbin, Jr., and Homeland Security Investigations (HSI) Special Agent in Charge Janice Ayala.

On August 28, 2013, federal and state authorities executed a search warrant at the defendant’s residence.  An analysis of computer related equipment collected by authorities revealed that on August 25, 2013, Salazar downloaded and viewed over 150 images depicting child pornography.  On March 3, 2014, Salazar pleaded guilty to the receipt of child pornography charge.

“By conducting these types of investigations, HSI is taking child predators off the Internet, off the streets, and putting them behind bars,” said Special Agent in Charge, Janice Ayala, HSI San Antonio. “Targeting these crimes against children is a high priority for HSI. We will continue to dedicate law enforcement resources to identify and bring to justice child predators that traumatize and victimize children.”

This investigation was conducted by HSI together with the Texas Department of Public Safety.  Assistant United States Attorney Tracy Thompson prosecuted this case on behalf of the Government.

In Midland, three former Permian Basin business owners and a title company executive were sentenced this afternoon for their roles in a mortgage fraud scheme that involved approximately 800 real estate properties and about $45 million in loans announced Acting United States Attorney Richard L. Durbin, Jr., and Federal Bureau of Investigation Special Agent in Charge Douglas E. Lindquist, El Paso Division.                 

This afternoon, United States District Judge Robert A. Junell sentenced:

• Stephen Mark Hilliard, age 59, owner of Comeback Properties, LLC, Hilliard Properties, LLC, SMH Properties, LTD, and Katpast Enterprises, LP, to three years in federal prison followed by four years of supervised release.  On August 12, 2014, Hilliard pleaded guilty to one count of conspiracy to commit bank fraud and one count of conspiracy to commit money laundering;

• Michael Duraine Cowan, II, age 43, owner of TLC Properties, LLC, and MCBW Properties, LTD, to three years in federal prison followed by four years of supervised release.  On August 5, 2014, Cowan pleaded guilty to one count of conspiracy to commit bank fraud and one count of conspiracy to commit money laundering;

• Berta Laura McFaddin, age 56, former Division Vice President of Administration for Stewart Title Company in Midland, to one year and one day in federal prison followed by four years of supervised release.  Judge Junell also ordered McFaddin to pay a $25,000 fine.  On July 29, 2014, McFaddin pleaded guilty to one count of conspiracy to commit bank fraud; and,

• Cynthia Gayle Hirsch, a 62-year-old Odessa real estate agent, to five years probation including one year of home confinement and ordered to complete 300 hours of community service.  On August 12, 2014, Hirsch pleaded guilty to one count of conspiracy to commit bank fraud.

As part of the plea agreements, Judge Junell ordered Hilliard to pay a $1 Million money judgment; Cowan to pay a separate $1 Million monetary judgment; and, Hirsch to pay a $100,000 monetary judgment.  Also, Hilliard forfeited to the Government a 2009 Lincoln MKX, 2003 Mercedes Benz SL500R, 2004 GMC Yukon, and two 2006 Yamaha Waverunners.  These monetary amounts and property represented the proceeds derived from their fraudulent scheme.

According to court records, from March 2003 until August 2011, the defendants were involved in a fraudulent “same-day property flip” scheme.  Admittedly, Hilliard and Cowan purchased a property utilizing one of their respective investment companies, and then re-sold the same property on the same day at an “inflated” sales price to another one of their investment companies.

In order to substantiate inflated prices, Hirsch admittedly created a Broker’s Price Opinion for each property in the amount directed by Hilliard or Cowan.  McFaddin, admittedly, assisted in the completion of HUD-1 forms on the same-day property flips.  Hilliard and/or Cowan obtained mortgage loans by submitting to the bank fraudulent and misleading documentation created by the defendants and without disclosing to the bank the initial sale of the property.

“Today’s sentencings culminate a multi-million dollar mortgage fraud scheme which was investigated over several years.  The success of this investigation relied heavily on interagency cooperation between the FBI, Texas Department of Insurance and various private sector entities.  The diligence displayed by investigators and professional staff proved to Midland area residents this type of crime will not be tolerated during the economic growth being experienced in the surrounding communities,” stated FBI SAC Douglas E. Lindquist.

Assistant United States Attorney Austin Berry prosecuted this case on behalf of the Government.

In El Paso today, 45-year-old Maria Blake (aka “Jessica”, “Yvonne”) and her 45–year-old husband, Ronald, were sentenced to 30 months and six months in federal prison respectively inducing foreign or interstate travel for prostitution announced Acting United States Attorney Richard L. Durbin, Acting Homeland Security Investigations (HSI) Special Agent in Charge Tom Hernandez and Federal Bureau of Investigation (FBI) Special Agent in Charge Douglas E. Lindquist.

In addition to the prison terms, United States District Judge Kathleen Cardone ordered that Maria Blake pay a $1,000 fine and be placed under supervised release for a period of ten years after completing her prison term.  Judge Cardone also ordered that Ronald Blake pay a $500 fine, remain under home confinement for six months and be placed under supervised release for a period of ten years after completing his prison term.  Furthermore, Judge Cardone ordered that the defendants’ residence located in the 2400 block of Tierra Nueva in El Paso be forfeited to the Government as it was used to facilitate their prostitution scheme.

In October 2014, both defendants pleaded guilty to one count of aiding and abetting coercion and enticement.  By pleading guilty, the Blakes admitted that from July 2011 until January 2013, they ran a prostitution service whereby they knowingly persuaded, or attempted to persuade, approximately five females to travel from Juarez to El Paso to engage in sexual activity for financial gain.

The Blakes were arrested based on an investigation initiated by the El Paso Anti-trafficking Coordination Team (ACT Team). The ACT Team is a human trafficking task force composed of members from the FBI, HSI and the Department of Labor.

“The ACT Team is an effective and efficient law enforcement force multiplier by which we can identify, arrest and prosecute criminals involved in luring and prostituting young women,” said Acting HSI SAC Hernandez. “Criminal networks that may have operated in our region and gone undetected before are on our radar now.”

Assistant United States Attorney Rifian Newaz prosecuted this case on behalf of the Government.

Over $1 Million will be paid in the form of tuition refunds for 289 students

Kaplan Higher Education (“Kaplan”), a leading for-profit education company with campuses located throughout the country, will pay roughly $1.3 million under a civil settlement with the United States Department of Justice.  The settlement resolves whistleblower allegations that the company employed unqualified instructors at its campuses in Texas, Acting U.S. Attorney Richard L. Durbin, Jr. announced today.

Kaplan operates for-profit colleges on several campuses in Texas, including Kaplan College – San Antonio (San Pedro) and Kaplan College – San Antonio (Ingram).  These campuses offer a mix of degree and diploma programs, such as a Medical Assistant Diploma program designed to train students for entry-level positions in the health care field.  Many of Kaplan’s students receive financial assistance under federal programs that help eligible students obtain higher education.  These federal programs, authorized under Title IV of the Higher Education Act of 1965 (“Title IV”), include the Federal Pell Grant Program, Federal Direct Loan Program, and Federal Family Education Loan Program, among others.

The Department of Justice began investigating Kaplan after a whistleblower, Leslie Coleman, filed a qui tam lawsuit under the False Claims Act accusing Kaplan of employing unqualified instructors to teach Medical Assistant courses at its San Antonio campuses.  The suit alleged that Kaplan knowingly requested, received, and retained federal tuition funds for courses taught by individuals who did not meet the minimum requirements established by Texas law.  Following the United States’ investigation, the parties negotiated a settlement pursuant to which Kaplan will pay $1,329,753.25 to resolve the whistleblower claims.  The majority of the settlement – roughly $1,077,000 – will be paid in the form of tuition refunds.  These refunds will benefit 289 students, whose student loan debt will decrease as a result of the settlement.

Kaplan fully cooperated with the government’s investigation and negotiated the settlement in good faith, stated Acting U.S. Attorney Durbin.  The settlement is not an admission of liability by Kaplan or its affiliates.

The Department of Education Office of Inspector General (DOE-OIG) and the U.S. Attorney’s Office for the Western District of Texas investigated the allegations raised in the whistleblower suit captioned United States ex rel. Leslie Coleman v. Kaplan, Inc., The Washington Post Company, Kaplan Higher Education Corporation, Kaplan College – San Antonio (San Pedro) and Kaplan College – San Antonio (Ingram), no. SA:12-cv-0459-FB (W.D. Tex.)   DOE-OIG Special Agent Edd Cole, Assistant U.S. Attorney John J. LoCurto, and ACE Auditor Jamie Cole, CPA handled the investigation for the Government.

Individuals who suspect Title IV fraud, waste, or abuse are encouraged to report their information to the Department of Education by calling the Inspector General’s fraud hotline at 1-800-MIS-USED.

In San Antonio today, 49–year-old Yolanda Hernandez de Arteaga, the former operator of the Los Compadres Restaurant in LaVernia, TX, pleaded guilty to federal charges in connection with the execution of a fraud scheme for financial benefit which targeted individuals seeking legitimate immigration documents announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent in Charge Christopher Combs, San Antonio Division.

Appearing before Chief U.S. District Court Judge Fred Biery this morning, Arteaga pleaded guilty to one count of conspiracy to commit wire fraud and five substantive counts of wire fraud.

By pleading guilty, Arteaga admitted that from October 2010 through December 2012, she and her co-defendant, 56–year-old Maria de Lourdes Montano-Vicencio, an undocumented alien living in Houston, initiated a series of financial fraud schemes including numerous incidents of wire fraud whereby they would induce vulnerable immigrants in the LaVernia area into giving them money in exchange for securing legal immigration status documents.  In the schemes, the defendants claimed to have personal contacts with immigration authorities who could provide each victim with items such as a social security card, a resident alien car and a work permit in about six months-time.  It was part of the scheme that the defendants did not provide any documents to the undocumented aliens.  During the time of the conspiracy, the defendants collected over $100,000 from more than 60 immigrants desperate for legal immigration status documents.  When the victim-immigrants became angry because they never received any documents or refunds, the defendants threatened to notify immigration authorities and facilitate the deportation of the immigrants if the victims made trouble.  During the scheme, Arteaga wired proceeds from the scheme from LaVernia to Montano-Vicencio in Houston via Western Union or MoneyGram.

Arteaga, who is on a $25,000 bond and confined to her residence pending sentencing, faces up to 20 years in federal prison.  The federal government is also seeking a $150,000 monetary judgment against the defendants representing the proceeds derived from their alleged scheme.

Montano-Vicencio, who is in federal custody, is currently awaiting sentencing after pleading guilty to four counts of wire fraud in February of last year.  Arteaga and Montano-Vicencio are scheduled to be sentenced on March 6, 2015.

This case resulted from an investigation conducted by the agents with the Federal Bureau of Investigation with assistance from Homeland Security Investigations (HSI), U.S. Border Patrol and the LaVernia Police Department.  Assistant United States Attorney Bettina Richardson is prosecuting this case on behalf of the Government.

In San Antonio this morning, four individuals received federal prison terms for their roles in a San Antonio-based firearms trafficking scheme announced U.S. Attorney Robert Pitman, Homeland Security Investigations (HSI) Special Agent in Charge Janice Ayala and Special Agent in Charge Robert Elder, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Houston Division.

Chief U.S District Judge Fred Biery sentenced 40–year-old ringleader Roberto Loera and his brother, 31–year-old Manuel Loera-Cazares each to ten years in federal prison.  Judge Biery also sentenced 35–year-old Jose Fedencio Mendez Cadena of San Antonio and 42–year-old Jose Driscoll to four years in federal prison.  In addition, Judge Biery sentenced a fifth defendant, 25–year-old Daniel DeLeon, to five years probation.

On October 17, 2014, co-defendants Santos Ligues, III, age 36, and Juan Jose Flores were sentenced to 20 months in federal prison and five years probation, respectively.  An eighth defendant, 30-year-old Agustin Aguilar-Torres failed to appear for today’s sentencing.  An arrest warrant has been issued for Aguilar-Torres.

All of the defendants entered guilty pleas to various firearms trafficking charges earlier this year.  According to court records, from February 2012 until April 2012, the defendants were involved in a firearms trafficking scheme in the Western and Southern Districts of Texas.  The scheme involved the purchasing of assault weapons from federal firearms licensees (FFLs) in San Antonio, then obliterating their serial numbers.  The defendants would subsequently dismantle the firearms and conceal them inside the I-beams of a pick-up truck in an attempt to smuggle them into Mexico.  On April 24, 2012, Frio County Sheriff’s deputies conducted a traffic stop on the truck being driven by Driscoll and seized $50,000 in U.S. Currency as well as five AR-15 assault rifles.

In San Antonio today, the former owner of J.M. Food Mart in Seguin, Texas, admitted to collecting approximately $275,000 from a scheme to trade Supplemental Nutrition Assistance Program (SNAP) benefits for ineligible items announced United States Attorney Robert Pitman.

Appearing before United States Magistrate Judge John Primomo this morning, 55-year-old Aijaz Aslam pleaded guilty to one count of wire fraud.  By pleading guilty, Aslam admitted that from November 2009 until May 2013, he conducted materially fraudulent transactions by selling ineligible items such as alcohol and tobacco products to SNAP beneficiaries using their Lone Star Cards at the point of sale.  Aslam also admitted that he fraudulently traded SNAP benefits for cash while generally charging SNAP beneficiaries up to double the amount of cash received.

Aslam faces up to 20 years in federal prison. He is currently on bond pending sentencing scheduled for March 2, 2015, before United Stated District Judge David A. Ezra. 

Defendant intimidated witness in trial of Killeen brothers convicted of distributing close to 30 kilograms of cocaine

In Waco today, U.S. District Judge Walter S. Smith, Jr., sentenced 33-year-old Carrick Mondale Mango of Killeen, TX, to ten years in federal prison followed by three years of supervised release and ordered him to pay a $1,000 fine for witness tampering announced United States Attorney Robert Pitman, Federal Bureau of Investigation Special Agent in Charge Christopher Combs, San Antonio Division, and United States Marshal Robert Almonte.

On June 12, 2014, Mango pleaded guilty to one count of obstruction of justice and one count of witness tampering.  According to court records, on March 6, 2014, during the trial of U.S. v. Cornelius Tywarren Wilson, et al. (W-13-CR-138) in federal court in Waco, Mango approached a trial witness and instructed the witness not to testify against defendant Christopher Wilson.  The witness told deputy U.S. Marshals that Mango gave the witness an intimidating look, which made the witness feel threatened and uncomfortable.  The witness took the stand during trial and testified but failed to identify Christopher Wilson, even though they were neighbors.

Mango’s intimidation tactics also included accosting the prosecutor trying the case and intentionally following another government witness to the lobby of the United States Attorney’s Office.

On March 10, 2014, the jury found Christopher and his brother, Cornelius Wilson, guilty of multiple drug charges in connection with their cocaine distribution operation based in Killeen.  On April 30, 2014, Christopher and Cornelius Wilson were sentenced to 35 years and 30 years in federal prison, respectively.

This case was investigated by the Federal Bureau of Investigation together with the United States Marshals Service.  Assistant United States Attorney Greg Gloff prosecuted this case on behalf of the Government.

In El Paso, federal and state authorities have arrested the owner and two employees of ERENE, Inc., (ERENE) for their alleged roles in an estimated $100 million trade based money laundering scheme announced U.S. Attorney Robert Pitman and Homeland Security Investigations (HSI) Acting Special Agent in Charge Tom Hernandez, El Paso Division.

ERENE, doing business as “J&E Sports,” “Rise High Skateshop,” Quicken,” “Quicken Footwear & Accessories,” “Pepes Casual,” “Arise 915,” and “Forward Footwear,”  is an El Paso-based business which primarily sells shoes and other goods to U.S. and Mexican-based customers. 

A 61–count federal grand jury indictment unsealed today in El Paso, charges ERENE, 52–year-old owner Jose Luis Rodriguez,  40–year-old ERENE Assistant Manager Jorge Penuelas, and  53-year-old ERENE employee Manuel Rodriguez with multiple money laundering conspiracy charges.  Other charges alleged in the indictment include smuggling goods from the United States; engaging in monetary transactions in property derived from specified unlawful activity; conspiracy to commit mail and wire fraud; mail fraud; and, wire fraud.

The indictment alleges that since May 2007, Rodriguez on behalf of ERENE, made false and material representations to shoe suppliers that ERENE would only sell their product on a retail bases i.e. to end use consumers.   On the basis of this representation, suppliers provided ERENE with millions of dollars in product which was primarily sold on a wholesale basis to Mexican and U.S. based purchasers.  Once these goods were obtained, the indictment alleges, ERENE and the Mexican based wholesale purchasers used smugglers or “pasadors” to unlawfully smuggle shoes into Mexico from the United States.  Through this method, ERENE and the Mexican based wholesale purchasers avoided tariffs, duties, and fees imposed by the Mexican government on the import of shoes into Mexico.  Further, although the goods smuggled into Mexico are sold for pesos, the Mexican based wholesale purchasers paid for a significant majority of those goods with U.S. cash dollars.

The aforementioned schemes generated significant proceeds which the indictment alleges were laundered by the defendants through various means such as the purchase of U.S. Postal money orders. 

Trade based money laundering (TBML) is the exploitation of the international trade system, including its financial system, to launder illicit proceeds.  A subset of TBML is the Black Market Peso Exchange (BMPE).  According to the indictment, criminal organizations are using the BMPE to convert the proceeds of their illegal activities from U.S. dollars to Mexican pesos in order to avoid the risk of smuggling bulk amounts of U.S. Currency across the border; risk detection by having to wire transfer the proceeds; and, to evade Mexican anti-money laundering regulations announced in June 2010 that restrict the amount of physical U.S. currency that Mexican banks may receive. 

Generally, the BMPE scheme involves a drug trafficking organization or other criminal organization obtaining large amounts of U.S. dollars through illegal activity.  These organizations, either directly or in conjunction with Mexican wholesalers/retailers or other third parties, then use these U.S. cash dollars to purchase goods within the United States, such as shoes.   These goods are then brought into Mexico and sold for pesos.

All three defendants, who were arrested yesterday without incident, remain in federal custody pending detention hearings next week.  In addition, federal and state law enforcement executed several search warrants yesterday at various locations and seized approximately $600,000 from four bank accounts affiliated with ERENE and Rodriguez as well as approximately 25,000 pairs of shoes with a rough estimated domestic value of $1,125,000. 

Each money laundering conspiracy, mail and wire fraud conspiracy, mail fraud and wire fraud charge carries a maximum penalty of 20 years in federal prison upon conviction.  Each money laundering and smuggling charge carries a maximum of ten years imprisonment upon conviction. 

This investigation is being conducted by the HSI’s Financial Operations & Currency Unified Strikeforce (FOCUS).  FOCUS is comprised of investigators from HSI, IRS – Criminal Investigation (IRSCI), U.S. Postal Inspection Service (USPIS), Customs and Border Protection – Office of Field Operations (CBP-OFO) and the El Paso Police Department. The Government of Mexico Servicio de Administracion Tributaria (SAT) also assisted in this investigation.  The case is being prosecuted by Assistant United States Attorney Joseph Blackwell.

In San Antonio this morning, FBI agents arrested 36–year-old Texas Mexican Mafia (TMM) member Ruben Reyes (aka “Menace”) in connection with the alleged murders of three high ranking TMM members announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent in Charge Christopher Combs, San Antonio Division. 

A federal criminal complaint filed today charges Reyes, a former TMM “Lieutenant of Lieutenants,” with one count of using or discharging a firearm during a crime of violence, specifically, violent crimes in aid of racketeering (VICAR).  According to the complaint, on January 13, 2014, Reyes shot and killed TMM “Captain” Mark Anthony Bernal (aka “Lefty”), TMM “General” Carlos Chapa (aka “Worm”), and TMM “Lieutenant of Lieutenants” Johnny Solis (aka “Smiley”) for their alleged mishandling of approximately $60,000 and making poor decisions in regards to the TMM daily operations.  The complaint further alleges that Reyes transported and buried the bodies of Bernal, Chapa and Solis in Pearsall, TX.

Reyes, who remains in federal custody, faces between ten years and up to life in federal prison upon conviction. 

This complaint resulted from an investigation conducted by the FBI together with the San Antonio Police Department, Texas Department of Public Safety Criminal Investigations Division, Bexar County Sheriff’s Department and the Texas Department of Criminal Justice. 

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

In Austin today, 52-year-old former Jarrell (TX) Police Chief Andres Tomas Gutierrez was sentenced to 54 months in federal prison followed by three years of supervised release for a wire fraud/theft of honest services scheme announced United States Attorney Robert Pitman; Homeland Security Investigations (HSI) Special Agent In Charge Janice Ayala in San Antonio; Department of Homeland Security Office of Inspector General–Investigations Special Agent In Charge J. Kirk Beauchamp in Houston; and Federal Bureau of Investigation Special Agent In Charge Christopher Combs, San Antonio Division.

On February 7, 2014, Gutierrez pleaded guilty to the wire fraud/theft of honest services charge.  By pleading guilty, Gutierrez admitted that from the Fall of 2011 to November 2013, he devised a scheme to defraud and deprive the citizens of Jarrell of their right to his honest services through bribery and concealment of information.  Gutierrez solicited and accepted cash bribes—between $10,000 and $40,000—from several undocumented aliens in return for requesting and obtaining for the aliens limited immigration benefits that the U.S. government intended and designed for law enforcement purposes.  Gutierrez falsely represented to the U.S. government that the undocumented aliens were assisting the Jarrell Police Department with ongoing investigations into narcotics trafficking and human trafficking.

According to court records, individuals unconnected to the City of Jarrell and its Police Department introduced Gutierrez to undocumented aliens who had money to pay for immigration benefits.  Gutierrez or the individuals who made the introductions, or both, then met with the aliens and explained the benefits they could receive if they paid certain amounts of money.  They lied to the aliens, telling them that the Jarrell Police Department would receive the money and use it to pay for law enforcement operations.  They also told the aliens that they would provide information or assistance to the Jarrell Police Department, for use in criminal investigations, in return for the immigration benefits.  That was also a lie.  Gutierrez never asked the aliens to provide assistance or information in connection with criminal investigations.  What Gutierrez asked for and received from the aliens was money. 

Furthermore, with the help of the individuals who introduced him to the aliens, Gutierrez simply sold the aliens the benefits.  After an alien paid his or her money, Gutierrez would submit to the U.S. government an application for the alien to receive what is known as a Significant Public Benefit Parole, which is a type of immigration status that federal immigration laws make available to aliens who actually assist federal, state and local law enforcement agencies.   The Paroles authorize an alien to reside and work in the United States for up to a year, and they can be renewed.  The applications that Gutierrez submitted said the aliens were providing assistance with ongoing criminal investigations by the Jarrell Police Department, which was false.  Also, Gutierrez never disclosed to the United States government that he was selling the Paroles.

“The sentencing of Andres Gutierrez, the former Jarrell Police Chief, is the culmination of a long-term investigation into corruption and the violation of public trust,” said Special Agent in Charge Janice Ayala of Homeland Security Investigations (HSI) in San Antonio. “This case illustrates the ability of federal law enforcement agencies to leverage resources and work together to achieve justice.”

“Acts of corruption within law enforcement threaten our nation’s system of justice and undermine the honest and hardworking law enforcement personnel who consistently strive to keep that system the best in the world.  The Department of Homeland Security will not tolerate corruption, and we will aggressively pursue those who choose to break the law,” stated DHS OIG SAC J. Kirk Beauchamp.

“The FBI will continue to utilize all resources to investigate those who have taken an oath to serve and protect our communities and use their position as a public servant to shield their criminal activities and violate the trust of those they serve,” stated FBI Special Agent in Charge Christopher Combs.

This investigation was conducted by agents with Homeland Security Investigations, Department of Homeland Security Office of Inspector General--Investigations and the Federal Bureau of Investigation.  Assistant United States Attorneys Alan M. Buie and Gregg N. Sofer prosecuted this case on behalf of the Government.

In San Antonio today, a federal jury convicted 41-year-old U.S. Army Lieutenant Colonel Raymond Valas of sex trafficking of a minor announced United States Attorney Robert Pitman, Special Agent in Charge Christopher Combs of the FBI’s San Antonio Division and Texas Attorney General Greg Abbott.

The jury found that Valas, a U.S. Army War College fellow at Syracuse University and a member of the New Hampshire National Guard, solicited a minor using the internet for the purpose of engaging in commercial sex.  Further, jurors found that Valas knowingly had sex with that minor female in a San Antonio hotel on two occasions in August 2013 while on temporary duty. 

Valas faces between ten years and life in federal prison when he is sentenced on February 27, 2015.  Following the reading of the verdict, on the motion of the Government, Chief U.S. District Judge Fred Biery remanded Valas into federal custody.

All three of Valas’ co-defendants have been convicted of sex trafficking of minors as a result of this investigation.  San Antonio residents Marcus Deshawn Wright, age 38, Malcolm Deandre Copeland, age 22, and Amber Doak, age 20, await sentencing on February 27, 2015.

This case was investigated by the Federal Bureau of Investigation (FBI) together with the San Antonio Police Department.  Assistant United States Attorney Bettina Richardson and Special Assistant United States Attorney Geoff Barr from the Texas Attorney General’s Office are prosecuting this case on behalf of the Government.

United States Attorney Robert Pitman announced today that the Western District of Texas (WDTX) collected $20,238,152 in criminal and civil actions in Fiscal Year 2014.  Of this amount, $8,945,457.88 was collected in criminal actions and $11,292,694.70 was collected in civil actions. 

Additionally, the Western District of Texas worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $12,748,758.80 in civil actions pursued jointly with these offices.         

“While convictions and prison terms get a lot of attention, these collections demonstrate that we vigorously pursue justice on behalf of victims and the citizens of the Western District of Texas.  These collection figures, together with the asset forfeiture recoveries, show that we will make strong efforts to separate ill-gotten gains from those who violate criminal and civil laws, and hold them fully accountable,” stated United States Attorney Robert Pitman.

In San Antonio, the WDTX collected $450,000 restitution in December from Thomas Shriver.  Shriver was sentenced to two years probation and ordered to pay restitution for his role in a Health Care fraud scheme.

In July, the WDTX collected $311,000.00 towards defendant Sherri Lynn Brewer’s Court ordered restitution.  On August 2, 2013, Brewer was sentenced to serve 15 years of probation and to pay $6,445,370 in restitution for contract procurement fraud against the United States Air Force.

In December, the WDTX collected $178,166.25 from Jimmie Fulton Gibson.  Gibson was sentenced to 15 years incarceration followed by a lifetime of supervised release for receipt of child pornography.  At sentencing, the Court ordered that Gibson pay a fine for his cost of incarceration at $2,000.00 per month from his military retirement.

In El Paso, the WDTX collected $223,413.80 restitution in January from Albert G. Torres who was convicted of wire fraud and deprivation of honest services and sentenced to 18 months in federal prison for defrauding the City of El Paso with respect to contracts for repairs and service to city garbage trucks.

In Midland, the WDTX collected $100,000 towards restitution in August from Jose Luis Suarez.  In June, Suarez was sentenced to 21 months imprisonment and ordered to pay approximately $229,000 restitution for subscribing false tax returns.

In November 2013, the WDTX collected $84,000 from Tammie Stephens following her conviction for wire fraud.  At sentencing, the Court ordered Stephens to pay $84,000 restitution for embezzling from her employer, Big Lake Service.

In April, the WDTX collected $43,872.14 towards restitution from Brantten Rhodes.  Last November, Brantten was sentenced to two years in federal prison and ordered to pay $235,300 for stealing copper wire from oilfield drilling rigs.

In Austin, the WDTX collected $61,000 towards restitution in March from Christina Newsome.  On April 15, 2013, Newsome was sentenced to five years probation and ordered to pay $240,132.32 in restitution for a Health Care fraud and money laundering scheme.

In August, the WDTX collected $17,924.61 towards restitution from Manuel Hernandez for defrauding FEMA.  Last year, Hernandez was sentenced to five years probation and ordered to pay $30,000 restitution and a $3,000 fine for making a false claim to FEMA that his primary residence was destroyed as a result of the Labor Day 2011 wildfires in Bastrop County.

In Del Rio, the WDTX collected $61,000 restitution in July from John Andrew Cardenas who was convicted of aiding and abetting the preparation and presentation of a false and fraudulent federal tax return.

In Waco, the WDTX collected $20,157.32 towards restitution last month from Jamal and Magdalena Akhter.  In August 2013, the Akhters were sentenced to 21 months and 18 months in federal prison, respectively, and ordered to pay $295,737.64 in restitution to the USDA following wire fraud convictions for fraudulently handling SNAP benefits.

In Pecos/Alpine, the WDTX collected $8,800 from Billy Wayne King this year.  In August 2010, King was sentenced to 18 months imprisonment and ordered to pay a $10,000 fine for possession of marijuana with intent to distribute.  The $8,800 was collected in April, June and October thereby paying off King’s debt in full.

Those cases were reflected in today’s announcement by Attorney General Eric Holder that the Justice Department collected $24.7 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2014.  The more than $24 billion in collections in FY 2014 represents nearly eight and a half times the appropriated $2.91 billion budget for the 94 U.S. Attorney’s offices and the main litigating divisions in that same period.

“Every day, the Justice Department’s federal prosecutors and trial attorneys work hard to protect our citizens, to safeguard precious taxpayer resources, and to provide a valuable return on investment to the American people,” said Attorney General Holder.  “Their diligent efforts are enabling us to achieve justice and recoup losses in virtually every sector of the U.S. economy.  And this result shows the fruits of the Justice Department’s tireless work in enforcing federal laws; in protecting the American people from violent crime, national security threats, discrimination, exploitation, and abuse; and in holding financial institutions accountable for their roles in causing the 2008 financial crisis.”   

The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims.  The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss.  While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.

The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws.  In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.

In Laredo, TX, today, federal authorities arrested 37-year-old Victor Manuel Guerra, Jr., in connection with an alleged theft of Eagle Ford Shale oil announced United States Attorney Robert Pitman; Christopher Combs, Federal Bureau of Investigation (FBI) Special Agent in Charge of the San Antonio Division; and William Cotter, Internal Revenue Service (IRS) Criminal Investigation Acting Special Agent in Charge.

Last month, a federal grand jury in Del Rio, TX, indicted the Laredo resident and two others--49-year-old Juan Martin Bernal of Eagle Pass, TX, and 25-year-old Carlos Samuel Pena of Del Rio--on charges of theft of oil from interstate shipment, wire fraud, and money laundering.  Guerra is charged with two counts of theft from interstate shipment, sixty-nine counts of wire fraud and fifty-eight counts of money laundering.  Bernal and Pena, who were arrested earlier this month, are both charged with one count of theft from interstate shipment and sixty-nine counts of wire fraud. 

The indictment alleges that between January 2011 and August 2014, the defendants devised a scheme to steal oil from energy companies operating in the South Texas’ Eagle Ford Shale, including a company Bernal worked for, Newfield Exploration Company, and Anadarko Petroleum Corporation, a company that employed Pena.  Guerra, who owned Las Lomas Vacuum Services and AVG Vacuum Services, provided wastewater removal services from oil field well sites.  According to the indictment, Guerra’s trucks had no authority from the Texas Railroad Commission to receive or transport oil.  Further, the wastewater trucks were not designed to safely carry and transport oil.  

The indictment further alleges that although Guerra’s company had no contract or permission to be on Newfield or Andranko property, Pena and Bernal covertly allowed the wastewater trucks onto the victims’ properties.  Instead of removing wastewater from the oil field storage tanks, the drivers, in collusion with Pena and Bernal, would take oil.  The pilfered oil was then transported to Guerra’s property where Guerra would sell the stolen product for financial gain to third-party buyers who would pay for the oil via wire transfer.

The indictment also includes a notice of criminal forfeiture wherein the Government is seeking proceeds derived from the fraudulent scheme as well as funds totaling more than $1.5 million, which represents the amount of proceeds obtained, directly or indirectly, as a result of the criminal scheme.

“The vast expanse of the Eagle Ford Shale and the high level of oil and gas drilling and production in the area provide many opportunities for those inclined to cheat and steal.  This indictment gives notice that this office will work closely with federal and state law enforcement agencies to vigorously investigate and prosecute those who perpetrate unlawful schemes to exploit the financial opportunities presented in the oil field,” stated United States Attorney Robert Pitman.

“While the theft the defendantsallegedly engaged inresulted in significant losses for two publicly traded companies, this type of criminal activity often harms the American public as well by hindering the creation of new jobs, raising prices for consumers, and depriving communities of tax revenue needed to fund infrastructure and other vital projects,” said Christopher Combs, Special Agent in Charge of the San Antonio Division of the Federal Bureau of Investigation.  “The FBI will continue to work side-by-side with our law enforcement partners to investigate and prosecute those who put their greed above the law.”

IRS Criminal Investigation Acting Special Agent in Charge William Cotter said: “No matter how slick a criminal thinks he is, there’s always a trail to follow.  In this case, IRS CI Special Agents employed their financial investigative expertise to separate the oil from the water, leading them to Guerra Jr., Bernal, and Pena.”

Upon conviction, the theft and money laundering counts are punishable by imprisonment up to ten years and a fine of $250,000 and the wire fraud counts are punishable by imprisonment up to 20 years and a fine of $250,000.

This indictment resulted from an investigation conducted by agents with the Federal Bureau of Investigation (FBI), Internal Revenue Service (IRS) Criminal Investigation, Texas Attorney General’s Special Investigations Unit, Bexar County District Attorney’s Office, Texas Department of Public Safety, Texas Rangers, Dimmit County Sheriff’s Office, and the Texas Railroad Commission.  Assistant United States Attorneys Bryan Nathan Reeves and Timothy Adam Duree are prosecuting this case on behalf of the Government.

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

In Waco today, 47-year-old James Fudge of Temple, TX, was sentenced to 108 months in federal prison for possession of child pornography announced United States Attorney Robert Pitman and Special Agent in Charge Janice Ayala, Homeland Security Investigations (HSI) in San Antonio.

In addition to the prison term, United States District Judge Walter S. Smith, Jr. ordered that Fudge pay a $1,000 fine and be placed on supervised release for a period of five years after completing his prison term. 

On September 18, 2014, Fudge pleaded guilty to possession of child pornography.  By pleading guilty, Fudge admitted to being in possession of child pornography and sharing child pornography with others via the Internet.  On October 15, 2013, HSI agents executed a search warrant at the defendant’s residence and seized his computer and other related media.  A forensics examination of the computer revealed the presence of approximately 970 images depicting child pornography. 

"The prevention and investigation of the exploitation of minors is a priority for HSI," said Special Agent in Charge Janice Ayala, HSI San Antonio. "These investigations are pursued by dedicated special agents who not only work with the United States Attorney's Office to bring predators to justice, but work tirelessly to prevent these crimes through extensive outreach and education."

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

In Waco today, 21-year-old Daniel Lee Rosales of Killeen, TX, was sentenced to two years in federal prison for stealing money from U.S. Army soldiers though a fraudulent loan scam announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent in Charge Christopher Combs, San Antonio Division.

In addition to the prison term, United States District Judge Walter S. Smith, Jr. ordered that Rosales pay $28,180 restitution to his victims and be placed on supervised release for a period of five years after completing his prison term. 

On September 4, 2014, Rosales pleaded guilty to one count of false statement on loan or credit application.  By pleading guilty, Rosales admitted that in May 2013, he posed as a Sergeant in the First Cavalry Unit at Fort Hood to befriend new Army enlistees and encourage them to apply for signature loans at area banks in order to build up their credit.  Rosales further admitted to instructing them to place false residential and marital status information on loan applications in order to increase the loan amount enlistees could receive from the institution.  After the loans were obtained and the checks cashed, Rosales insisted on retaining the majority of the loan proceeds, in his words, “for safekeeping.” 

This investigation was conducted by the FBI and prosecuted by Assistant United States Attorney Mark Frazier.

In Waco today, 60-year-old former McLennan County Justice of the Peace Erma Jean Laster Boone was sentenced to 9 months in federal prison in connection with a scheme to steal Social Security Income benefits announced United States Attorney Robert Pitman.

In addition to the prison term, United States District Judge Walter S. Smith, Jr. ordered that Boone pay a $5,000   fine and be placed on supervised release for a period of three years after completing her prison term.

On September 11, 2014, Boone pleaded guilty to theft of Government property.  According to court records, Robert Martin Davis died on May 27, 2010, and the defendant was the reporting party on Davis’ death certificate.  From Davis’ death until October 2013, the Social Security Administration continued to deposit Social Security benefits, which totaled approximately $63,000, into Davis’ bank account.  The defendant had access to Davis’ bank account.  Boone admitted to authorities that she spent over $16,000 from Davis’ account on “fixing stuff up around the house.”  In March 2014, Boone paid back to the Social Security Administration the money she had fraudulently embezzled and used.

This investigation was conducted by the United States Social Security Administration, Office of Inspector General.  Assistant United States Attorney Greg Gloff prosecuted this case on behalf of the Government.

In Midland, a federal grand jury returned an indictment charging a Monahans, TX, man in connection with a scheme to steal an estimated $58,000 worth of oil announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent in Charge Douglas C. Lindquist, El Paso Division.

The indictment charges 33–year-old David Wayne Schroeder with three counts of theft from an interstate shipment.  The indictment alleges that on three separate occasions in November and December 2013, Schroeder stole oil from different Permian Basin companies.  The final incident, according to court records, occurred during the evening hours of November 30, 2013, and into the early morning hours of December 1, 2013, when Schroeder used a stolen vacuum truck and trailer to steal five tankerloads (approximately 520 barrels) of oil from a Whiting Petroleum lease in Ward County.  Schroeder delivered the stolen oil to Itero Energy’s site in Monahans for payment.  A Ward County Sheriff’s deputy dispatched to investigate a possible stolen vacuum truck on Itero’s site witnessed Schroeder off-loading oil and attempted to question him.  After a brief altercation with the deputy, Schroeder managed to flee the scene in a stolen vehicle, but was apprehended later that morning in Monahans.  Investigators discovered Schroeder had left four tickets each documenting a separate tanker load delivered to Itero Energy’s site.  In the normal course of business, the tickets would have justified and likely led to Itero Energy’s payment for the oil deliveries.

Upon conviction of each theft charge, Schroeder faces up to 20 years in federal prison.  Schroeder remains in federal custody pending trial.  No trial date has been scheduled.

In Waco today, 51-year-old Milton Lewis Anglin of China Spring, TX, was sentenced to 51 months in federal prison for bank robbery announced United States Attorney Robert Pitman and Christopher Combs, Federal Bureau of Investigation Special Agent in Charge of the San Antonio Division.

In addition to the prison term, United States District Judge Walter S. Smith, Jr. ordered that Anglin pay a $1,000 fine and be placed on supervised release for a period of five years after completing his prison term. 

On September 18, 2014, Anglin pleaded guilty to a bank robbery charge admitting that he robbed the First National Bank of Central Texas located on China Spring Road in Waco with a dangerous weapon on January 31, 2014.  During the heist, Anglin stole approximately $2,832 from the financial institution.  Authorities arrested Anglin on February 3, 2014.  He has remained in federal custody since.

This case was investigated by the Federal Bureau of Investigation together with the Waco Police Department.  Assistant United States Attorney Greg Gloff prosecuted this case on behalf of the Government.

UPDATE - The defendants in this case, Howard Root and Vascular Solutions Inc., were acquitted of the charges alleged in the indictment described in the press release below.

An indictment was filed today charging Vascular Solutions Inc. (VSI) and its chief executive officer, Howard Root, with selling medical devices without U.S. Food and Drug Administration (FDA) approval and conspiring to defraud the United States by concealing the illegal sales activity. The announcement was made today by Acting Assistant Attorney General Joyce R. Branda for the U.S. Department of Justice’s Civil Division, U.S. Attorney Robert Pitman for the Western District of Texas and Special Agent in Charge Antoinette V. Henry of the U.S. Food and Drug Administration (FDA)’s Office of Criminal Investigations, Metro Washington Field Office. The devices at issue are from VSI's “Vari-Lase” product line, a system designed to treat varicose veins by burning or “ablating” them with laser energy.

Root and VSI are each charged with one count of conspiracy and eight counts of introducing adulterated and misbranded medical devices into interstate commerce. The case is pending in the U.S. District Court for the Western District of Texas.

“These charges involve a deceptive sales campaign led by the CEO of a public company,” said Acting Assistant Attorney General Branda. “The indictment charges that the sales campaign persisted in the face of FDA warnings, a whistleblower’s complaint to the CEO and a failed clinical trial showing that the device was less safe and less effective than a product that had already been approved. We will take action to hold corporations and their leaders responsible when they violate laws intended to protect public health.”

According to the indictment, the Vari-Lase products were cleared by the FDA only for the treatment of superficial veins, but Root and VSI sold them for the ablation, or removal, of “perforator” veins, which connect the superficial vein system to the deep vein system. Because perforator veins come into direct contact with deep veins, treating them with lasers was a more difficult and risky procedure.

Root is charged with leading the illegal sales campaign, which lasted from 2007 until 2014, and conspiring with others to hide it from the FDA. The indictment alleges that Root authorized the campaign after VSI failed to obtain FDA authorization to sell the Vari-Lase system for ablation of perforator veins. The sales campaign is alleged to have ignored FDA concerns about the safety and effectiveness of the procedure and specific warnings from the FDA not to sell Vari-Lase products for treatment of perforator veins. The indictment alleges that, with Root’s approval, the sales continued even after the company sponsored an unsuccessful clinical trial that showed that the Vari-Lase system was less safe and effective than a competing device that the FDA had cleared for perforator vein treatment. According to the indictment, the sales continued even after a whistleblower complained to Root in 2009 and the government told the company about its investigation in 2011.

The indictment also charges VSI and Root with deceiving the FDA. In late 2007, Root decided to launch a special “Short Kit” designed for perforator vein treatment, despite the lack of FDA marketing authorization, by claiming that the product was intended for “short vein segments” or “short veins.” At the same time, the government alleged that internal company documents approved by Root taught the sales force that these terms included perforator veins and urged salespeople to suggest to health care providers that Vari-Lase devices could be used to treat perforator veins. After learning about the government’s investigation, members of the sales force began using the term “short vein segments” in field trip reports to disguise that they were still selling Vari-Lase devices for perforator vein treatment, according to the indictment. Two other members of the sales force are alleged to have misled investigators; in addition, the indictment charges that one member falsely denied his conduct and another tried to scapegoat a low-level salesman.

In July 2014, VSI agreed to pay $520,000 to resolve allegations that it caused false claims to be submitted to federal health programs by marketing the Vari-Lase devices for treating perforator veins. In that civil action, the government alleged that VSI knowingly caused physicians and other purchasers of the Short Kit to submit false claims to federal health care programs for uses of the Short Kit that were not reimbursable.

“FDA is committed to protecting the public health and the integrity of the regulatory system,” said Special Agent in Charge Henry.

The case is being prosecuted by Trial Attorney Timothy Finley of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Bud Paulissen of the Western District of Texas. The case was investigated by the FDA’s Office of Criminal Investigations and the U.S. Department of Health and Human Services’ Office of the Inspector General.

An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.

In El Paso on Friday, 31-year-old former U.S. Army Sergeant Dexroy Germaine Hamilton was sentenced to six months in federal prison followed by six months home confinement for the illegal importation of International Trafficking in Arms Regulations (ITAR) controlled military equipment valued at approximately $30,000 announced United States Attorney Robert Pitman and Homeland Security Investigations (HSI) Special Agent In Charge Dennis Ulrich.

In addition to the prison term, Senior United States District Judge David Briones ordered that Hamilton perform no less than 100 hours of community service and be placed under supervised release for a period of three years after completing his prison term.

On August 22, 2014, Hamilton pleaded guilty to one count of conspiracy to commit theft of government property and one count of smuggling goods into the United States.  By pleading guilty, Hamilton admitted that while on deployment in Afghanistan between July 2013 and March 2014, he conspired with others to steal U.S. military munitions property including optical sights, night vision equipment and infrared lasers, then transport those items to the United States for resale. 

On March 20, 2014, HSI agents executed a search warrant at the defendant’s residence in El Paso where they recovered five (5) AN/PVS-14 night vision monocular devices, fifty-two (52) PMAG 5.556 x 42 military magazines, and nineteen (19) M-16 magazines (government owned).

This investigation was conducted by Homeland Security Investigations.  Assistant United States Attorney Greg McDonald prosecuted this case on behalf of the Government.

In Waco today, 26-year-old Conner Phillip Koss and his mother, 60-year-old Le’Ann Koss, both of Hewitt, TX, were sentenced to 121 months and 70 months in federal prison, respectively, for their roles in a marijuana distribution scheme announced United States Attorney Robert Pitman.

In addition to the prison terms, United States District Judge Walter S. Smith, Jr., ordered that Conner and Le’Ann Koss each pay a $2,000 fine and be placed under supervised release for a period of five years after completing their prison terms.

On July 24, 2014, Le’Ann Koss pleaded guilty to one count of conspiracy to possess with intent to distribute marijuana and one substantive count of possession with intent to distribute marijuana.  On June 26, 2014, Conner Koss pleaded guilty to the same charges.  By pleading guilty, the defendants admitted that from October 2010 until November 2013, they conspired with family members and others to possess over 50 kilograms of marijuana. 

Also sentenced today was Brian Thomas Smith, age 23.  Judge Smith sentenced Smith to two years in federal prison followed by three years of supervised release after pleading guilty in July to his role in the marijuana distribution scheme.  Judge Smith also ordered Smith to pay a $1,000 fine.
Hewitt
Phillip Larry Koss, age 59, remains in federal custody awaiting sentencing after pleading guilty in March to one count of possession with intent to distribute marijuana.  Originally scheduled to be sentenced today, Phillip Larry Koss instead requested new counsel be appointed to represent him--a request which Judge Smith granted today.   He faces up to five years in federal prison.

On November 29, 2013, authorities executed a search warrant at the Koss’ residence and discovered approximately 12 pounds of tetrahydrocannabinol, commonly known as THC, several firearms and some $27,000 in U.S. Currency.  Court records allege that the defendants obtain high grade marijuana from the State of California and arrange for it to be transported to their residence in Hewitt for distribution.  Authorities have also recovered approximately 200 pounds of marijuana resulting from related search warrants executed in California as well as traffic stops during this investigation.

The Koss’ other son, Chad, is scheduled for a re-arraignment hearing at 10:00am tomorrow before Judge Smith.  He faces the conspiracy charge only.

This investigation is being conducted by the McGregor Police Department, Texas Department of Public Safety and the Yuba County (CA) Narcotics Enforcement Team.  Assistant United States Attorney Mary F. Kucera is prosecuting this case on behalf of the Government.

In El Paso, 45-year-old Maria Blake (aka “Jessica”, “Yvonne”) and her 45–year-old husband, Ronald, face up to 20 years in federal prison after pleading guilty to federal charges involving foreign or interstate travel for prostitution announced United States Attorney Robert Pitman, Homeland Security Investigations (HSI) Special Agent in Charge Dennis Ulrich and Federal Bureau of Investigation Special Agent in Charge Douglas E. Lindquist.

Appearing before United States Magistrate Judge Norbert Garney this morning, Ronald Blake pleaded guilty to one count of aiding and abetting coercion and enticement.  Maria Blake pleaded guilty to the same charge yesterday.  By pleading guilty, the Blakes admitted that from July 2011 until January 2013, they ran a prostitution service whereby they knowingly persuaded, or attempted to persuade, approximately five females to travel from Juarez to El Paso to engage in sexual activity for financial gain.  

The Blakes are on bond pending sentencing.  No sentencing date has been scheduled.  The Government is also seeking the criminal forfeiture of their residence located in the 2400 block of Tierra Nueva in El Paso.  Authorities allege that the residence was used to facilitate their prostitution scheme.

The Blakes were arrested based on an investigation initiated by the El Paso Anti-trafficking Coordination Team (ACT Team). The ACT Team is a human trafficking task force composed of members from the Department of Justice, Federal Bureau of Investigation, Homeland Security Investigation, and the Department of Labor.Assistant United States Attorney Rifian Newaz is prosecuting this case on behalf of the Government.

Today, United States Attorney Robert Pitman announced the appointment of Assistant United States Attorney (AUSA) Tom Moore as the District Election Officer.  AUSA Moore will lead the efforts of the United States Attorney’s Office for the Western District of Texas in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 4, 2014, general elections. AUSA Moore will be responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.

United States Attorney Pitman said, “Every citizen must be able to vote without interference or discrimination and to have that vote counted without it being stolen because of fraud. The Department of Justice will act promptly and aggressively to protect the integrity of the election process.”

The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on Election Day.

Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.

In order to respond to complaints of election fraud or voting rights abuses on November 4, 2014, and to ensure that such complaints are directed to the appropriate authorities, United States Attorney Pitman stated that AUSA/DEO Moore will be on duty in this District while the polls are open. He can be reached by the public at the following telephone number: (210) 384-7188.

In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on Election Day. The San Antonio FBI field office can be reached by the public at (210) 225-6741.  The El Paso FBI field office can be reached by the public at (915) 832-5000.  Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington by phone at 1-800-253-3931 or (202) 307-2767, by fax at (202) 307-3961, by email to voting.section@usdoj.gov or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.

United States Attorney Pitman said, “Ensuring free and fair elections depends in large part on the cooperation of the American electorate. It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my Office, the FBI, or the Civil Rights Division.”

In El Paso today, 27-year-old Wano McSwain of Dahlonega, Georgia, was sentenced to seven years in federal prison for being a convicted felon in possession of a firearm during an interstate kidnapping announced United States Attorney Robert Pitman and Douglas E. Lindquist, Federal Bureau of Investigation (FBI) Special Agent in Charge of the El Paso Division.

In addition to the prison term, United States District Judge Philip R. Martinez ordered that McSwain be placed under supervised release for a period of three years after completing his prison term and forfeit two firearms and an assortment of ammunition seized by law enforcement at the time of his arrest. 

According to court records, on February 5, 2014, a 78-year-old man reported to a store clerk at the Love’s Truck Stop on Interstate 10 in Anthony, TX, that he was in fear of his life.  The man told the clerk that two days prior, while in Georgia, McSwain forced him at gunpoint to drive McSwain to Albuquerque, NM.   Anthony police officers arrived on the scene and began searching for McSwain.  They subsequently arrested McSwain nearby and recovered a .25 caliber pistol and a .20 gauge shotgun belonging to McSwain. 

McSwain’s criminal history reveals that he was convicted of Pandering of a Child on April 19, 2005 in Clark County, NV, and subsequently sentenced to two to eight years in the Nevada Department of Corrections.  Further investigation revealed a police report on file in Lumpkin County, GA, which alleged that McSwain stole the .20 gauge shotgun recovered by authorities on February 5, 2014.  On August 29, 2014, McSwain pleaded guilty to the federal felon-in-possession charge in El Paso. 

This case was investigated by special agents with the Federal Bureau of Investigation together with the Anthony Police Department.  Assistant United States Attorney Rifian Newaz prosecuted this case on behalf of the Government.

In Austin today, 58-year-old political consultant Kenneth Barfield (aka “Buddy Barfield”) pleaded guilty to stealing approximately $1.8 Million in campaign funds from Texas Lieutenant Governor David Dewhurst announced United States Attorney Robert Pitman, Christopher Combs, Federal Bureau of Investigation (FBI) Special Agent in Charge of the San Antonio Division, and IRS Criminal Investigation Acting Special Agent in Charge William Cotter.

Appearing before United States Magistrate Judge Mark Lane, Barfield pleaded guilty to one count of wire fraud, one count of making a false tax return and one count of embezzlement of federal campaign funds.  According to court documents, Barfield, and through his Austin-based companies, was a member of the campaign staff and committee for Lieutenant Governor David Dewhurst’s run for the Republican nomination for United States Senate in 2012.  Barfield and his companies were responsible for securing, paying, and/or subcontracting legal and legitimate activities on behalf of Dewhurst’s campaign and had a fiduciary duty to act in the best interests of the campaign, including oversight and maintenance of financial records.

By pleading guilty to the charges, Barfield admitted to knowingly engaging in a scheme to steal an estimated $1.8 Million in campaign funds and use it for his own personal expenses including his home mortgage, school tuition for his children, personal investments and other living expenses.  Barfield further admitted that on his 2008 Income Tax return, he knowingly stated that his Taxable Income was zero when, in fact, his Taxable Income should have been reported as approximately $582,000.  Barfield also admitted that under his direction, fraudulent documentation was submitted in disclosure reports to the Federal Elections Commission (FEC) regarding expenditures for campaign disbursements.

“This case should serve as a reminder of the unfortunate truth that some people abuse positions of trust to enrich themselves at the expense of others, including, in this case, the taxpayers,” stated United States Attorney Robert Pitman.

Barfield is on bond pending sentencing.  He faces up to 20 years in federal prison for wire fraud; up to three years in federal prison for making a false tax return; and, up to five years in federal prison for embezzlement of federal campaign funds.  Sentencing before United States District Judge Sam Sparks in Austin has yet to be scheduled.

“Whenever an individual utilizes their position to defraud the public for their own personal gain by stealing campaign contributions, it tarnishes our political process.  The FBI is committed to working with our law enforcement partners to ensure those who choose to line their pockets with public funds and abuse their positions of trust are held accountable,” stated FBI Special Agent in Charge Christopher Combs.

“The role of IRS Criminal Investigation becomes even more important in embezzlement cases such as this due to the complex financial transactions that must be unraveled.  As in the case of Mr. Barfield, federal tax laws are typically violated in connection with this blatant fraud which can result in additional jail time,” stated IRS Criminal Investigation Acting Special Agent in Charge William Cotter.  “Honest and law abiding citizens are fed up with greedy individuals who abuse the trust they are granted and use deceit and fraud to line their pockets with other people's money.  Today's guilty plea demonstrates the collective efforts of IRS and our partners to enforce the law and ensure public trust.”

This case was investigated by special agents with the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation together with the Travis County District Attorney’s Special Prosecution Division.  Assistant United States Attorneys Dan Guess and Ashley Hoff are prosecuting this case on behalf of the Government.

In Pecos on Friday, United States District Judge Robert A. Junell sentenced a 49-year-old Terlingua, TX, woman to the statutory maximum of ten years in federal prison for stealing over $245,000 in Social Security benefits paid to her deceased father announced Robert Pitman, United States Attorney.

In addition to the prison term, Judge Junell ordered Judith Maria Broughton to pay restitution to the federal government in the amount of $245,226 and be placed under supervised release for a period of three years after completing her prison term.

On July 3, 2014, Broughton pleaded guilty to a one count Information charging her with willfully and knowingly stealing Social Security Administration Retirement Insurance Benefits.  By pleading guilty, Broughton admitted that she forged her father’s signature causing SSA benefits paid in the name of her father, Luther D. Broughton, to be electronically deposited into a joint checking account. From June 1990 to August 2011, she collected the funds deposited into the account even after his death.  Broughton further admitted to converting those monies to her own personal use.

According to court records, Luther Broughton died in June 1990 and the defendant leased a storage unit in Lexington, KY, to conceal his death.  A search of the storage unit on January 8, 2014, revealed the mummified remains of Luther D. Broughton as well as his personal belongings including an automobile.  Also, the defendant’s mother, Mary Elizabeth Broughton’s, Social Security benefits were being electronically deposited into a joint checking account with the defendant.  Mary Elizabeth Broughton’s whereabouts have not been determined and her SSA benefits have been suspended.

This case was investigated by special agents with the Social Security Administration-Office of Inspector General with assistance from the Brewster County Sheriff's Office and law enforcment in Lexington, KY.  Assistant United States Attorney James J. Miller, Jr. prosecuted this case on behalf of the Government.

A member of a drug trafficking organization with ties to the Los Zetas Cartel operating in Piedras Negras, Mexico, faces up to life in federal prison after a jury convicted him of smuggling thousands of kilograms of marijuana into the United States from Mexico announced United States Attorney Robert Pitman, Christopher Combs, Federal Bureau of Investigation (FBI) Special Agent in Charge of the San Antonio Division, Janice Ayala, Homeland Security Investigations Special Agent in Charge, San Antonio, and Joseph M. Arabit, Drug Enforcement Administration Special Agent in Charge, Houston Division.

On October 16, 2014, jurors convicted 20–year-old Servando Benitez-Reynoso of one count of conspiracy to possess with the intent to distribute 1,000 kilograms or more of marijuana and one count of possession with the intent to distribute 1,000 kilograms or more of marijuana.  The jurors found him not guilty of conspiracy to commit bulk cash smuggling and one count of bulk cash smuggling. 

According to courtroom testimony, Benitez-Reynoso was the organizer for the drug trafficking organization in the United States who was responsible for coordinating the movement of marijuana loads from the Quemado, TX, and Normandy, TX, areas to San Antonio and Austin between September 27, 2012, and July 31, 2013.  Benitez-Reynoso scouted for the load vehicles and coordinated the route of travel to avoid detection.   Bundles of marijuana, smuggled across the river into Quemado were transported to stash houses in Eagle Pass, TX.  From there, the marijuana was transported to stash houses in San Antonio and Austin where it would be further broken down and distributed to other locations.  Evidence presented during the trial also showed that Benitez-Reynoso attempted to influence the testimony of witnesses. 

On July 31, 2013, Benitez-Reynoso was arrested in Eagle Pass while scouting for a load of marijuana.  He will remain in federal custody pending sentencing. Sentencing is scheduled for February, 2014, in Del Rio.

This case was investigated by special agents with the Federal Bureau of Investigation, Homeland Security Investigations and Drug Enforcement Administration together with the U.S. Border Patrol, U.S. Marshal Service, Austin Police Department, Houston Police Department, and Brookshire Police Department.

Federal, state and local law enforcement have arrested 23 individuals, including 35-year-old alleged ringleader George Alamillo of San Antonio, charged with conspiracy to distribute cocaine in the Crystal City, La Pryor, Carrizo Springs and San Antonio areas announced United States Attorney Robert Pitman, Drug Enforcement Administration Special Agent in Charge Joseph M. Arabit, Houston Division, and Homeland Security Investigations Special Agent in Charge Janice Ayala, San Antonio Division.

An eight–count indictment, unsealed today, charges those arrested, along with 44–year-old Gabriel Martinez (aka “Gabby”), who was already in custody prior to yesterday, with conspiracy to distribute cocaine. A list of the defendants arrested yesterday is below. Defendants face between five and 40 years, or up to 20 years, in federal prison upon conviction for the drug conspiracy charge.

The indictment alleges that from February 2014 to September 2014, the defendants participated in a cocaine distribution conspiracy. During this investigation, authorities have seized approximately one kilogram of cocaine, 660 pounds of marijuana, 15 firearms (including 10 AK-47s and one MAC-10 semi-automatic pistol), approximately $33,000 in U.S. Currency and three vehicles.

In addition to the drug charges, several defendants including Gerardo Martinez, Gabriel Martinez, Claudio Jimenez and Javier De la Rosa are charged with knowingly transporting undocumented aliens. Each defendant faces up to ten years incarceration upon conviction.

Domingo Aguilar also faces a single charge of unlawful possession of a firearm by a drug user. The indictment alleges that on June 10, 2014, Aguilar was unlawfully in possession of a .22 caliber American Tactical Rifle. Aguilar faces up to ten years incarceration upon conviction.

Martha Perez also faces a misprision of felony charge whereby she allegedly was aware of the drug distribution conspiracy and had possession of a cell phone used by a co-defendant to facilitate the operation, yet denied ever possessing the phone to authorities. Perez faces up to three years incarceration upon conviction.

“The success of this operation exemplifies the outstanding teamwork among federal, state and local law enforcement agencies in the Eagle Pass region. DEA will continue to work closely with our law enforcement partners in order to improve the quality of life in the communities throughout this area,” stated DEA Special Agent in Charge Joseph M. Arabit.

These charges and arrests resulted from an Organized Crime Drug Enforcement Task Force (OCDETF) investigation conducted by the Drug Enforcement Administration and Homeland Security Investigations with assistance from the United States Border Patrol, Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives, Eagle Pass Police Department, 293rd Judicial District Attorney’s Office, Dimmit County Sheriff’s Office, Uvalde County Sheriff’s Office, Kinney County Sheriff’s Office, Maverick County Sheriff’s Office and the Zavala County Sheriff’s Office.

“This OCDETF criminal investigation worked by Homeland Security Investigations (HSI) and DEA dealt a major blow to a south Texas criminal organization that is made up several criminal networks,” said Special Agent in Charge Janice Ayala, HSI San Antonio.

“The Zavala County Sheriff’s Office is committed to working with our federal and state law enforcement partners to identify and remove drug trafficking from our communities,” said Zavala County Sheriff Eusevio Salinas. “Investigations of this scale provide a positive impact on our citizens and make our communities safer. I would like to thank the DEA Eagle Pass Office and HSI for their commitment to the citizens of Zavala County and our State.”

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


ARRESTED YESTERDAY (24)

NAME AGE RESIDENCE
GEORGE ALAMILLO 35 San Antonio
LUCIO LEROY GONZALEZ 34 San Antonio
MARTHA ZULEMA PEREZ 44 LaPryor, TX
JOSE LUIS PEREZ 39 LaPryor
LLOYD DANIEL JACQUEZ a.k.a. “Richie” 34 LaPryor
JAVIER PEREZ a.k.a. “J-Bird” 33 LaPryor
JESUS VICTORINO a.k.a. “Chuy” 35 Uvalde, TX
JOHN DAVID VICTORINO a.k.a. “Pajaro” 35 Uvalde
MARGARITO BALCAZAR a.k.a. “Nunito” 26 LaPryor
VENTURA MORENO a.k.a. “Benny” 34 Crystal City, TX
REYNALDO ROBLEDO a.k.a. “Rey” 34 LaPryor
TIMOTHY PENA 36 LaPryor
JESSE JOE QUEVEDO a.k.a. “Caveman”, “Chuy” 35 Crystal City
GERARDO MARTINEZ a.k.a. “Gerry” 47 Crystal City
JESSICA LARA RODRIGUEZ 30 Carrizo Springs, TX
CHRIS MARTINEZ 40 Carrizo Springs
RAMIRO AGUILAR a.k.a. “Ram” 41 Crystal City
JOHNNY AGUILAR 40 Crystal City
MARK ANTHONY MENA 27 Crystal City
DEEANA NICOLE MARTINEZ 24 Crystal City
CLAUDIO PABLO JIMENEZ a.k.a. “Clyde” 43 Crystal City
JAVIER DELAROSA 42 Crystal City
DOMINGO AGUILAR a.k.a. “Mingo” 61 Crystal City
JESUS PEREZ a.k.a. “Jesse” 34 LaPryor

In El Paso today, U.S. District Judge Kathleen Cardone sentenced 34-year-old repeat sex offender Berry Jay Miller to 30 years in federal prison followed by a lifetime of supervised release for distribution of child pornography announced United States Attorney Robert Pitman and FBI Special Agent in Charge Douglas E. Lindquist, El Paso Division.

On August 11, 2014, Miller pleaded guilty to a child pornography distribution charge.  By pleading guilty, Miller, a registered sex offender, admitted to using public terminals at the El Paso Public Library to exchange images of child pornography via email with other individuals, including an undercover agent.  According to court records, Miller has two prior sex offenses in El Paso County—one for indecency with a child and one for solicitation of a minor.  Miller has remained in federal custody since FBI agents arrested him on March 10, 2014.

“The sentencing of Berry Miller is a prime example of the dedication and hard work of  the El Paso Child Exploitation Task Force, comprised of the FBI, El Paso Police Department, El Paso Sheriff’s Office, Texas Department of Public Safety and Homeland Security Investigations.   We are dedicated to protecting the El Paso Community from predators who commit heinous crimes against children and will continue to rigorously investigate and prosecute them,” stated FBI Special Agent in Charge Douglas E. Lindquist, El Paso Division.

Assistant United States Attorney Robert Almonte prosecuted this case on behalf of the Government.

Federal and state authorities have arrested 24 individuals, including Austin lawyers Richard Patrick Fagerberg, age 45, and David Ramos, age 39, for their roles in a cocaine and methamphetamine distribution operation announced United States Attorney Robert Pitman and Drug Enforcement Administration Special Agent in Charge Joseph M. Arabit, Houston Division. 

Two related federal grand jury indictments, unsealed this afternoon, charges those arrested, as well as ten others who were already in custody prior to today, with conspiracy to distribute a controlled substance.  A list of the defendants is below. 

According to the indictments, the defendants have allegedly participated in a conspiracy to distribute various amounts of cocaine and methamphetamine since May 2013.  During this 16-month-long operation, authorities have seized approximately 87 kilograms of cocaine and two kilograms of methamphetamine, four firearms, close to $1.5 million in criminally derived assets in connection with this investigation.

“Nothing is more important than the safety and security of our communities.  DEA, and our federal, state, and local law enforcement partners in Austin and throughout Texas, will remain relentless in our pursuit of the vicious criminal individuals and drug trafficking organizations who threaten our safety and stability. These arrests send a strong and unified message that these crimes will not be tolerated in our communities and those who commit these offenses will be brought to justice,” stated DEA Special Agent in Charge Joseph M. Arabit.

Upon conviction, the defendants face statutory penalties of between ten years and life imprisonment or between five and 40 years imprisonment. 

“Organized crime and drug trafficking are a serious threat to public safety in Texas, and DPS vigilantly works alongside our law enforcement partners to detect, deter and dismantle drug trafficking organizations operating in our communities,” said DPS Regional Commander Freeman Martin. “This long-term investigation is an ideal example of how law enforcement at all levels works together to put suspected criminals behind bars and protect Texans.”

These charges and arrests resulted from an investigation conducted by the Austin High Intensity Drug Trafficking Area (HIDTA) Task Force.  The Austin HIDTA Task Force is made up of investigators from the Drug Enforcement Administration, Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation, Texas Department of Public Safety, Austin Police Department, Travis County Sheriff’s Office, Bastrop County Sheriff’s Office, Williamson County Sheriff’s Office, Hays County Sheriff’s Office, Cedar Park Police Department and the Georgetown Police Department.  Other agencies participating in today’s arrests include Homeland Security Investigations (HSI), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), United States Marshals Service, Round Rock Police Department, Travis County District Attorney’s Office and the Williamson County District Attorney’s Office.  Assistant United States Attorneys Mark Marshall and Dan Guess are prosecuting this case on behalf of the Government. 

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

ARRESTED YESTERDAY (24)

CASE #          NAME                                                  AGE   RESIDENCE        STAT. PENALTY

A14cr292        DAVID DEPAZ                                                       22        Austin, TX                  10 years to life
A14cr292        HECTOR MAYORGA                                          23        Austin                          10 years to life
A14cr292        ALVARO SALINAS                                              46        Austin                             5 years to 40 years
A14cr292        ARTHUR VILLALOBOS                                    34        Taylor, TX                   5 years to 40 years
A14cr292        JOEL AVILEZ-JAIMES                                      38        Austin                             5 years to 40 years
A14cr292        VERONICA DeLEON                                          31        Taylor                             5 years to 40 years
A14cr292        RENE PEREZ                                                         35        Austin                           10 years to life
A14cr292        ALEJANDRO RODRIGUEZ                             41        Austin                             5 years to 40 years
A14cr292        FRANCISCO LOPEZ                                           38        Austin                           10 years to life
A14cr292        FERNANDO TEJEDA                                        30        Austin                           10 years to life
A14cr292        JAVIER TEJEDA                                                 24        Austin                             5 years to 40 years
A14cr292        ROGELIO VILLANUEVA                                 35        Austin                             5 years to 40 years
A14cr292        JAMES YERKES                                                  46        Austin                           10 years to life
A14cr292        TIMOTHY COOPER                                          49        Debray, FL                    5 years to 40 years
A14cr300        RAY VILLEGAS                                                   42        Austin                           10 years to life
A14cr300        VALERIA CUENCA                                            23        Kyle, TX                      10 years to life
A14cr300        ANTONIO NIETO                                              23        Austin                           10 years to life
A14cr300        GERVACIO MORALES                                     31        Kyle                               10 years to life
A14cr300        BENJAMIN TYLER GOLDBERG                 26        Austin                           10 years to life
A14cr300        VICTOR HUGO EXCALANO-ZUVIETA  25        Austin                           10 years to life
A14cr300        RICHARD PATRICK FAGERBERG           45        Austin                           10 years to life
A14cr300        DAVID RAMOS                                                   39        Austin                            10 years to life
A14cr300        EUGENIO LUCIO                                               60        San Benito, TX          10 years to life
A14cr300        JUAN MAXIMO RUIZ                                     33        Brownsville, TX        10 years to life

ALREADY IN CUSTODY PRIOR TO YESTERDAY (10)

CASE #          NAME                                                AGE   RESIDENCE       STAT. PENALTY

A14cr292        JOSE NIETO-FIGUEROA                             23        Pflugerville, TX       5 years to 40 years
A14cr292        RICARDO CRUZ                                               53        Pharr, TX                   10 years to life
A14cr292        GERARDO DIAZ                                               23        Austin, TX                 10 years to life
A14cr292        JUAN GONZALEZ                                           28        Austin                           10 years to life
A14cr300        OSCAR ARMANDO AVILA-JAIMES     35        Austin                           10 years to life                       
A14cr300        ARMANDO GUTIERREZ                           40        Austin                           10 years to life
A14cr300        JESUS ANGELOS DOMINGUEZ             29        Austin                           10 years to life
A14cr300        OSCAR SUAREZ-LARA                               29        Austin                           10 years to life
A14cr300        JOSE LUIS REYES-VALLE                        38        Austin                           10 years to life
A14cr300        ANTONIO de JESUS
                             HERNANDEZ-GONZALEZ                         29        Austin                           10 years to life

In Waco today, U.S. District Judge Walter S. Smith, Jr., sentenced the owner of A-Kind Bookkeeping and Tax (AKBT) located in Mexia, TX, and her daughter to federal prison for their roles in a fraudulent Income Tax Return preparation scheme announced United States Attorney Robert Pitman and IRS-Criminal Investigation Acting Special Agent in Charge William Cotter.

AKBT owner Patricia “Sissy” Foley was sentenced to two years incarceration followed by three years of supervised release and ordered to pay $842,815 restitution to the IRS after pleading guilty in June to one count of conspiracy to commit tax fraud.

Foley’s daughter, Cassandra Renee Egbert (aka Cassandra Renee Foley), was sentenced to 18 months incarceration followed by three years of supervised release and ordered to jointly pay the same amount of restitution after pleading guilty in June to one count of conspiracy to commit tax fraud.

In addition, Lana Renee Catalena (aka Lana Rene Venable) was sentenced to three years probation and ordered to pay a $4,000 fine after pleading guilty in August to one count of aiding or assisting false or fraudulent tax returns.

A fourth defendant in this case, Joshua Duane Stifle, was scheduled to be sentenced today but instead, he filed a motion to withdraw his guilty plea.  In August, Stifle pleaded guilty in August to one count of aiding or assisting false or fraudulent tax returns and one count of making a false statement.  Judge Smith has taken his motion under advisement. 

According to court records, from January 2007 until April 15, 2010, the defendants were involved in preparing and filing fraudulent Income Tax Returns with the Internal Revenue Service in which they falsely claimed deductions and credits (i.e. head of household, first time home buyer) they knew the filer was not entitled to receive.

“While most return preparers provide excellent service to their clients, a few unscrupulous tax preparers file false and fraudulent returns to defraud the government and their own clients. Our special agents use their investigative and financial expertise to detect and hold accountable abusive tax return preparers who falsely tell taxpayers they are eligible for tax credits that they are not entitled to receive. These sentences are a reminder that all tax professionals have to respect the law and protect the interests of their clients and the taxpaying public,” stated IRS Criminal Investigation Acting Special Agent in Charge William Cotter.

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

In El Paso yesterday, 22-year-old Kevin Rodriguez was sentenced to 60 months in federal prison followed by three years of supervised release and ordered to pay restitution for his role in maliciously causing destruction to the Coronado Tower Building announced United States Attorney Robert Pitman and Special Agent in Charge Robert R. Champion, Bureau of Alcohol, Tobacco, Firearms and Explosives, Dallas Field Division.

According to court records, in April 2013, Rodriguez caused a fire to be started in the Coronado Tower Building located at 6006 North Mesa in El Paso.  An individual working in the building saw Rodriguez in close proximity to the fire and started chasing Rodriguez.  Rodriguez fled from the building and was shortly apprehended by a chef at a restaurant located in the Coronado Towers.  Rodriguez was then placed in police custody.

In July 2014, Rodriguez pled guilty to one count of maliciously damaging a building and admitted he started the fire using tissue and a lighter.  The fire caused some tenants of the building to close their business or to relocate to other offices in the building.

This case was investigated by Special Agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives and Investigators from the El Paso Fire Department Arson Unit. 

In Del Rio, 54-year-old German Garcia Cano faces up to ten years in federal prison after pleading guilty this afternoon to a bribery charge in connection with a bribery, kickback and bid-rigging scheme in Maverick County announced United States Attorney Robert Pitman and FBI Special Agent in Charge Christopher Combs.

Appearing before United States Magistrate Judge Collis White this afternoon, the owner of GGC Enterprises, Inc., pleaded guilty to one count of paying a bribe to an agent of an organization receiving federal funds.    According to the court records, Maverick County paid GGC hundreds of thousands of dollars between 2009 and 2012 for leasing heavy equipment used in construction projects in Maverick County.  By pleading guilty, Cano admittedly paid bribes to two Maverick County employees to insure that GGC secured those leasing contracts with Maverick County and to receive his checks from the county.

Cano, who is the 16th defendant convicted in connection with this Maverick County corruption investigation, remains on bond pending sentencing.  Eagle Pass businessman Hipolito Amaya is the only defendant who has been sentenced.  In March 2014, Amaya was sentenced to 41 months in federal prison followed by three years of supervised release and ordered to pay approximately $35,000 restitution for paying a bribe.  The remaining defendants are scheduled for sentencing in February 2015.

This investigation is being conducted by the Federal Bureau of Investigation and the Texas Department of Public Safety.  Individuals who have first-hand information about corruption, fraud, or bribery related to Maverick County are urged to contact the FBI at (210) 225-6741.  Assistant United States Attorney Bryan Reeves, Katherine Griffin and Michael Galdo are prosecuting this case on behalf of the Government.

More than 2,000 individuals victimized as a result of the defendants' scheme

In Waco today, 39-year-old Charles Hattenbach and 29–year-old Kathryn Hubbert were sentenced to 81 months and 48 month in federal prison, respectively, for a postal theft scheme involving more than 50,000 pieces of mail and over $500,000 in other U.S. Government property from U.S. Post Offices in approximately 80 cities and towns across Texas announced U.S. Attorney Robert Pitman and U.S. Postal Inspection Service (USPIS) Inspector in Charge Robert Weymss, Houston Division.

In addition to the prison terms, United States District Judge Walter S. Smith, Jr., ordered the defendants to pay $103,720 restitution.  Judge Smith also ordered that Hattenbach and Hubbert pay a $6,000 fine and $5,000 fine, respectively, and be placed on supervised release for a period of five years after completing their prison terms.

In July, Hattenbach pleaded guilty to one count of conspiracy to steal mail, one count of bank fraud, one count of theft of Government property and three counts of aggravated identity theft.  In June, Hubbert pleaded guilty to one count of conspiracy to steal mail, one count of bank fraud, one count of theft of Government property and two counts of aggravated identity theft. 

According to court records, from December 2013 until March 2014, the defendants conspired to steal U.S. mail and other Government property by breaking into U.S. Post Offices and blue mail receptacle boxes located outside of post offices in an area stretching from Midland to College Station and from Dallas to San Antonio.  The defendants stole credit cards, personal checks, business checks, money orders, postage, W-2s, tax returns, items which contained personal identifying information, cash, gift cards and other items belonging to more than 2,000 victims. 

The defendants also devised a scheme to defraud several financial institutions, including Extraco Bank in Round Rock, TX, by endorsing and depositing stolen money orders and checks.  The defendants subsequently withdrew the deposits causing the financial institutions to lose more than $80,000.  The defendants also activated numerous credit cards using victims’ personal identifying information, including names, social security numbers and driver’s license numbers and dates of birth, which they had previously stolen from the mail.

The defendants targeted United States Post Offices, collection boxes, parcel lockers and post office boxes in the following cities and towns:  Alvarado, Austin (Balcones, Bluebonnet, Main, McNeil, Mockingbird, Northcross, South Campus, Southeast, and Town North branches), Bangs, Belton, Blanket, Brenham, Bryan, Buchanan Dam, Buckholts, Burton, Cameron, Campbellton, Carmine, Cedar Park, Chapel Hill, Clifton, Coleman, College Station, Colorado City, Copperas Cove, Corpus Christi (Gulfway branch), Dripping Springs, Early, Elgin, Florence, Gause, Georgetown, Gustine, Harker Heights, Hearne, Heidenheimer, Hewitt, Hillsboro, Holland, Hutto, Jerrell, Jonesboro, Kemper, Killeen, Lampasas, Lawn, Leander, Ledbetter, Liberty Hill, Lockhart, Loraine, Lorena, May, McDade, Meridian, Merkel, Midland, Milano, Millican, Mound, Navasota, Nolanville, Novice, Paige, Pendleton, Pflugerville, Red Oak, Rising Star, Roby, Rockport, Rogers, Rosebud, Round Rock, Salado, San Angelo, San Marcos, Santa Anna, Sinton, Sterling City, Sweetwater, Taylor, Temple, Thorndale, Treat, Troy, Tye, Valley Mills, Waco (Highlander and Woodway branches), Walnut Springs, Washington and Weir.

“The Postal Inspection Service has sought those who steal mail for hundreds of years. The ability to use the mail in a safe and secure manner is at the core of the Postal Inspection Service's mission,” stated USPIS Inspector in Charge Robert Weymss.

This case resulted from an investigation conducted by USPIS and the Bell County Organized Crime Task Force (BCOTF).  The BCOTF is comprised of investigators from the United States Marshals Service, Bell County Sheriff’s Office and police departments from Temple, Belton, Killeen, Copperas Cove and Harker Heights. Assistant United States Attorney Greg Gloff prosecuted this case on behalf of the Government.

In Waco today, U.S. District Judge Walter S. Smith, Jr. sentenced 32-year-old Daniel Ethan Clark to 30 years in federal prison followed by ten years of supervised release on child pornography charges announced United States Attorney Robert Pitman and FBI Special Agent in Charge Christopher H. Combs.

On July 3, 2014, Clark pleaded guilty to one count of production of child pornography and one count of distribution of child pornography.  According to court records, in April 2014, the defendant, seeking images of child pornography in return, sent an email which contained child pornography images to an undercover officer. 

On April 1, 2014, FBI agents executed a search warrant at the defendant’s Copperas Cove residence and seized a cell phone belonging to the defendant.  A subsequent forensics examination of the cell phone revealed the presence of approximately 7,000 images and videos depicting child pornography.  By pleading guilty, Clark admitted to producing and distributing numerous images and videos of minor females, namely a 7-year-old and 13-year-old, engaged in sexually explicit conduct. 

Clark’s wife, Michelle, is charged by federal indictment with one count of sexual exploitation of children for allegedly knowing about, and even participating in, her husband’s actions.  Upon conviction, Michelle Clark faces between 15 and 30 years in federal prison.  Michelle Clark remains in federal custody pending trial.  She is currently set for jury selection on November 3, 2014.

This investigation was conducted by the Federal Bureau of Investigation.  Assistant United States Attorney Greg Gloff is prosecuting this case on behalf of the Government.

In San Antonio today, 29-year-old Leonard Roundtree, III, of Richardson, TX, was sentenced to five years in federal prison followed by three years of supervised release for plotting to kill his uncle’s intimate partner announced United States Attorney Robert Pitman, FBI Special Agent in Charge Christopher H. Combs, San Antonio Division, and United States Marshal Robert Almonte. 

In April, a jury convicted Leonard Roundtree of one count of conspiracy to commit murder.  Evidence presented in open court revealed that on June 10, 2013, Roundtree’s uncle, 52-year-old Alvin Roundtree, shot and wounded his intimate partner with a .45 caliber handgun inside the Medical Training Facility located on Fort Sam Houston Army Post.  The victim, who suffered a total of seven gunshot wounds, was immediately taken into surgery and survived the incident.  Authorities subsequently apprehended Alvin Roundtree while still on Fort Sam Houston and recovered the firearm.  Recorded phone calls between the defendants revealed that the two conspired to hire someone to kill the victim to prevent her testimony in court.  The evidence revealed that Leonard Roundtree agreed to, and in fact did, deliver information between his uncle and the hitman ultimately agreeing to pay $10,000 upon proof the murder.

In March, Alvin Roundtree pleaded guilty to one count of assaulting an officer or employee of the United States with a deadly weapon.  On September 9, 2014, Chief United States District Judge Fred Biery sentenced Alvin Roundtree to the maximum 20 years in federal prison.

Assistant United States Attorneys Bettina Richardson and Joey Contreras prosecuted this case on behalf of the Government.

In Austin today, 25–year-old Gabriel Soza Ruedas, Jr., was sentenced to two years in federal prison followed by three years of supervised release for pointing a laser at an aircraft flying overhead announced United States Attorney Robert Pitman and FBI Special Agent in Charge Christopher Combs, San Antonio Division. 

“Laser strikes can pose serious risks to flight crews, passengers, and even individuals on the ground.  They are a serious public safety hazard and will be treated as such by law enforcement officials,” stated United States Attorney Robert Pitman.

On July 7, 2014, Ruedas pleaded guilty to one count of pointing a laser at an aircraft--a federal violation under the FAA Modernization and Reform Act of 2012.

According to court records, on February 15, 2014, Ruedas admittedly aimed the beam of a laser pointer at a helicopter flying overhead.  That aircraft happened to be an Austin Police Department helicopter (Air1) on approach to land at Austin Bergstrom International Airport (ABIA).  All of this occurred after Air1 had been cleared by air traffic control to land.  Air1 delayed its landing to investigate the source of the laser.  Austin Air Traffic Control issued a general warning to all pilots in the area where the laser incident occurred, which was the flight path of arriving aircraft on short final approach to ABIA. 

The laser Ruedas used was strong enough to reflect inside the cockpit of Air1 causing the pilot to turn his head and avert his eyes from the laser, distracting him from normal flight operations.

The crew of Air1 communicated to ground units from the Austin Police Department (APD) information about the source of the laser strikes, enabling APD units to identify and apprehend Ruedas.  Ruedas was found with the laser pointer in his sweatshirt pocket and arrested.  He has since remained in federal custody.

“The sentence handed down today reinforces our message to the public:  Shining a hand-held laser at an aircraft is a serious, illegal act that exposes both air crew and the public on the ground to severe risk,” said Special Agent in Charge Christopher Combs of the San Antonio Division of the FBI. “Hand-held lasers are well labeled to inform owners of their potential risk to health and safety. Ignorance or curiosity is no excuse for such reckless action, and we are committed to working with our law enforcement partners to locate and identify individuals who have total disregard for life and safety.”

This case resulted from an investigation conducted by agents with the Federal Bureau of Investigation together with the Austin Police Department and the Texas Attorney General’s Office.  Assistant United States Attorney Gregg Sofer prosecuted this case on behalf of the Government. 

In San Antonio today, 31-year-old Michael Floyd White was sentenced to 39 months in federal prison followed by three years of supervised release and ordered to pay $112,362 restitution for his role in an aggravated identity theft and mail fraud scheme announced United States Attorney Robert Pitman and Special Agent in Charge Steven McCullough, Internal Revenue Service Criminal Investigation, San Antonio Field Office.

By pleading guilty to one count of mail fraud and one count of aggravated identity theft, White admitted that from January 2011 to February 2012, he and 30–year-old co-defendant Sasha Cher-Von Beckett knowingly devised a scheme to defraud the Internal Revenue Service by submitting fraudulent Income Tax returns seeking refunds totaling approximately $160,000.  Throughout the scheme, White and Beckett would use names, dates of birth and social security numbers of other individuals to electronically file numerous Income Tax returns, then collect the refunds by using the debit card option and having those debit cards mailed directly to them. 

Beckett awaits sentencing after pleading guilty to the one count each of mail fraud, aggravated identity theft and access device fraud.  She faces up to 20 years in federal prison for mail fraud and access device fraud.  She also faces a mandatory two years in federal prison for aggravated identity theft.  Beckett is scheduled to be sentenced at 1:30pm on October 22, 2014, before United States District Judge Xavier Rodriguez.

“IRS Criminal Investigation continues our emphasis on vigorously investigating refund fraud and identity theft.  This deliberate fraud can impede honest taxpayers from receiving their lawful refund and causes monetary loss to the U.S. Treasury.  Today’s sentencing of Mr. White should serve as a strong warning to those who are considering similar illegal conduct.  Those who engage in these fraudulent activities will be held accountable for their criminal actions,” stated IRS Criminal Investigation Special Agent in Charge Steven McCullough. 

This case was investigated by special agents with the IRS Criminal Investigation together with the San Antonio Police Department.  Assistant United States Attorney Tom Moore is prosecuting this case on behalf of the Government.

In Waco today, former McLennan County Justice of the Peace Erma Jean Laster Boone pleaded guilty to theft of Government property in connection with a scheme to steal Social Security Income benefits announced United States Attorney Robert Pitman.

According to court records, Robert Martin Davis died on May 27, 2010, and the defendant was the reporting party on Davis’ death certificate.  From Davis’ death until October 2013, the Social Security Administration continued to deposit Social Security benefits, which totaled approximately $63,000, into Davis’ bank account.  The defendant had access to Davis’ bank account.  Boone admitted to authorities that she spent over $16,000 from Davis’ account on “fixing stuff up around the house.”  In March 2014, Boone paid back to the Social Security Administration the money she had fraudulently embezzled and used.

Boone remains on bond pending sentencing which is scheduled for 1:00pm on November 19, 2014.  She faces up to ten years in federal prison and a maximum $250,000 fine.

This investigation was conducted by the United States Social Security Administration, Office of Inspector General.  Assistant United States Attorney Greg Gloff is prosecuting this case on behalf of the Government.

In Round Rock, TX, today, federal authorities arrested Richard Anthony Corrales, 55–year-old President of CORTEC Precision Sheet Metal, Inc., and two others for allegedly employing undocumented aliens announced Robert Pitman, United States Attorney for the Western District of Texas, and Janice Ayala, Special Agent in Charge for Homeland Security Investigations (HSI) in San Antonio. 

A two-count federal grand jury indictment, unsealed today, charges Corrales, CORTEC, 44-year-old old CORTEC brake operator Leopoldo Yepez, and 42–year-old CORTEC Human Resources Manager Mon Prum Cerda with one count of harboring undocumented aliens and one count of unlawful employment of undocumented aliens.

The indictment alleges that beginning in September 2013, the defendants concealed from law enforcement undocumented aliens employed by CORTEC.  According to the indictment, agents with the Department of Homeland Security (DHS) supplied the defendants with names of at least 16 undocumented aliens employed at the company and provided the defendants with 10 days notice to provide valid documentation.  The indictment further states that in January 2014, the defendants knowingly employed the undocumented aliens after representing to DHS that they had been fired.  In June 2014, the defendants informed DHS that many of the positions previously held by the undocumented aliens were still vacant when in fact, they were still employing undocumented aliens.

The defendants face up to ten years in federal prison if convicted of the harboring charge and up to six months in federal prison if convicted of the unlawful employment charge.  CORTEC faces fines of up to $250,000 on the harboring charge and up to $3,000 for each undocumented alien employed.

“Today’s arrest of three employees of the CORTEC Precision Sheet Metal Company comes in the wake of an investigation where these individuals were knowingly hiring an illegal workforce,” said Special Agent in Charge Janice Ayala, HSI San Antonio. “Investigations of these criminal violations play an important role in HSI’s mission.  Employers are encouraged to participate in the ICE Mutual Agreement between Government and Employers (IMAGE) Program, an outreach program designed to provide employers with the tools and knowledge that will enable them to hire and maintain a legal workforce.”

These charges and arrests resulted from an investigation conducted by Homeland Security Investigations (HSI).  Assistant United States Attorney Douglas Gardner is prosecuting this case on behalf of the Government.

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

In El Paso, a federal jury convicted 55–year-old Thomas Gregory Harris of Friendswood, TX, former Sr. Vice President for Luster National Inc.,  yesterday afternoon of 16 counts of wire fraud in connection with a scheme to defraud the Small Business Administration (SBA) announced United States Attorney Robert Pitman and Special Agent in Charge Douglas E. Lindquist of the FBI’s El Paso Division.

SBA administers a program pursuant to the Small Business Act called the “Section 8(a) program” that is intended to promote the business development of companies owned and operated by “socially and economically disadvantaged individuals.”  In that program, certain government contracts are sometimes set aside for performance by so-called “8(a) concerns,” that is, business entities whose owners/operators the SBA has determined meet the criteria for being "socially and economically disadvantaged."

In July 2010, the SBA approved a joint venture, called Tropical Luster Joint Venture ("TLJV"), between two business entities: Tropical Contracting, LLC ("Tropical"), which is based in San Antonio, and Luster National, Inc. ("Luster"), which has offices in Houston and California. The SBA had approved Tropical as an 8(a) concern in 2009. Luster was not a qualifying 8(a) concern.

Evidence presented during trial revealed that in 2010 and 2011, Harris, unbeknownst to the SBA, used Tropical’s qualifying 8(a) status to obtain three restricted contracts awarded by the SBA.

In 2011, the SBA awarded Harris and TLJV the “Net Zero contract” at Fort Bliss in El Paso to design and implement a written plan to reduce energy consumption at the base.  In January 2012, the U.S. Army paid TLJV approximately $492,000 as compensation for work on the Net Zero contract.

In 2010 and 2011, the SBA awarded Harris and TLJV two separate contracts with the U.S. Army Corps of Engineers (USACE) in Galveston, TX for project management duties as assigned by USACE.  From 2010 to 2012, USACE paid TLJV approximately $895,000 as compensation for work on USACE projects.

In all three matters, Tropical, the 8(a) concern, did not manage and control TLJV's performance of the contracts as required by law. In fact, personnel associated with Tropical did no work whatsoever on the contracts. Harris managed and controlled TLJV's entire performance of the contracts. Luster personnel, or subcontractors Luster retained, did all of the work.  Had the SBA known that Tropical was not managing and controlling TLJV's work on any of the contracts, it would have disqualified TLJV as an approved 8(a) joint venture, which would have rendered it ineligible for the contracts to perform the work at Fort Bliss or USACE in Galveston.

“Today’s conviction of Mr. Harris, should serve as a strong message regarding the FBI’s pursuit and prosecution of vendors in the El Paso community who take advantage of socially and economically disadvantaged small businesses for self-profit.  Nothing erodes the public trust more than those who illegally manipulate a contract acquisition process to benefit from taxpayer dollars,” stated FBI Special Agent in Charge Douglas E. Lindquist.

Harris is on bond pending sentencing.  Sentencing is scheduled for 8:00am on December 10, 2014, before United States District Judge Philip R. Martinez in El Paso.  Each wire fraud charge calls for up to 20 years in federal prison. 

This case was investigated by the Federal Bureau of Investigation (FBI) together with the United States Army Criminal Investigation Command, Major Procurement Fraud Unit.  Assistant United States Attorneys John Klassen and Gregory McDonald are prosecuting this case on behalf of the Government.

RICO Charge Alleges Murder, Extortion, Robbery, Assault, Drug Distribution, and Money Laundering

In El Paso, Barrio Azteca (BA) members and associates, including 41-year-old heroin supplier Rigoberto Alvarado of El Paso, are in custody charged with conspiracy to violate the Racketeering Influenced Corrupt Organization (RICO) statute announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent in Charge Douglas E. Lundquist, El Paso Division.

Today, state and federal authorities arrested eight (8) El Paso residents for their roles in the RICO conspiracy.  They are:  34-year-old Raul Lopez (aka Garfield); 54-year-old Manuel Minjares (aka Manny); 43-year-old Eugene Lozano (aka Gino, Polvos); 43-year-old Gabriel Aldana (aka Mookie); 35-year-old Rito Alvarez (aka Ewok); 55-year-old Jose Minjares (aka Paz); 48-year-old Ramon Sanchez (aka Magic); and, 43-year-old Jose Angel Barrios (aka Chamuco).  Alvarado and five others involved in the RICO conspiracy were already in state custody prior to today.  They are: 40-year-old Fernando Madrid (aka Muneco); 34-year-old Richard Espino (aka Cricket); 45-year-old Hector Bernal (aka Bouncer); 30-year-old Eddie Mendoza (aka Raskal); and, 35-year-old Barbara Rodriguez (aka Barbie).  Defendants face up to life in federal prison upon conviction of the RICO conspiracy charge. 

According to the RICO indictment, the Barrio Azteca, which began in the 1980’s as a violent prison gang and has expanded into a transnational criminal organization, is primarily based in West Texas; Juarez, Mexico; and throughout state and federal prisons in the U.S. and Mexico. In furtherance of the enterprise, BA members collect a street tax, also known as “cuota,”  “quota,”  “renta,” or “taxes.”  The proceeds from the “cuota” are used to support members of the BA who are arrested, to pay for lawyers, bail bonds, fines, and any other fees associated with legal proceedings.  The proceeds from the “cuota” are also used to purchase money orders, which are mailed through the United States Postal Service (USPS) to inmate accounts.  The proceeds are also reinvested back into the BA enterprise activities for the purchase of assets, commodities, and other property that are related to the day-to-day function of the BA, including firearms, ammunition, and controlled substances.

The indictment alleges that since August 2010, the defendants conspired to commit racketeering acts in furtherance of criminal enterprise including murder, attempted murder, extortion, drug distribution, and money laundering.  The indictment specifically alleges that on March 25, 2012, defendant Jose Angel Barrios murdered Raymundo Puga by injecting what’s referred to by BA’s as a “hotshot,” or lethal amount of heroin, which caused a heroin overdose.  Other overt acts alleged in the indictment included mailing heroin to Georgia so that it could be delivered to incarcerated BA members; purchasing money orders with criminal proceeds and sending them to incarcerated BA members; heroin and cocaine sales; and, threats to individuals for not paying cuotas or theft of cuotas.

In addition to the RICO conspiracy charge, the indictment charges:  Barrios with violating the VICAR statute, or Violent Crime in Aid of Racketeering, for the murder of Puga; Alvarado and Aldana with conspiracy to import heroin; Alvarado, Aldana, Sanchez, and Rodriguez with conspiracy to distribute heroin; Rodriguez with conspiracy to distribute cocaine; and, Madrid, Lopez, Lozano, Alvarado, Aldana, Espino, Alvarez, Sanchez, and Mendoza with conspiracy to commit money laundering.

“The FBI and together with our law enforcement  partners will continue to investigate gang members engaged in organized criminal activity to ensure the continued safety of our community,” stated FBI Special Agent in Charge Douglas E. Lindquist, El Paso Division.

“Organized crime, drug trafficking and gang activity pose an undeniable threat to the safety of all communities across the state. This extensive investigation is a great example of the successful partnership between DPS and our law enforcement colleagues in El Paso. We proudly work together around the clock to help prevent crime in this area and to take criminals off our streets,” stated Texas Department of Public Safety Commander Carey Matthews.

These charges and arrests resulted from a joint investigation conducted by the Federal Bureau of Investigation (FBI) and Homeland Security Investigations (HSI), together with the Texas Department of Public Safety, El Paso Police Department Gang Unit and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). 

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

In San Antonio today, 52-year-old Alvin Roundtree was sentenced to the maximum 20 years in federal prison for plotting to kill his intimate partner announced United States Attorney Robert Pitman, FBI Special Agent in Charge Christopher H. Combs, San Antonio Division, and United States Marshal Robert Almonte.

Chief United States District Judge Fred Biery also ordered that Roundtree be placed under supervised release for a period of three years after completing his prison term and forfeit his military pension.  Judge Biery continued the sentencing of Roundtree’s nephew and co-defendant, 29-year-old Leonard Roundtree, III, of Richardson, TX.  No new sentencing date has been scheduled.

In April, a jury convicted Leonard Roundtree of one count of conspiracy to commit murder.  In March, Alvin Roundtree pleaded guilty to one count of assaulting an officer or employee of the United States with a deadly weapon.  Evidence presented in open court revealed that on June 10, 2013, Alvin Roundtree shot and wounded his intimate partner with a .45 caliber handgun inside the Medical Training Facility located on Fort Sam Houston Army Post.  The victim, who suffered a total of seven gunshot wounds, was immediately taken into surgery and survived the incident.  Authorities subsequently apprehended Roundtree while still on Fort Sam Houston and recovered the firearm.  Recorded phone calls between the defendants revealed that the two conspired to hire someone to kill the victim to prevent her testimony in court.  The evidence revealed that Leonard Roundtree agreed to, and in fact did, deliver information between his uncle and the hitman ultimately agreeing to pay $10,000 upon proof the murder.

Assistant United States Attorneys Bettina Richardson and Joey Contreras prosecuted this case on behalf of the Government.

In Austin today, 58-year-old Patty E. Smith of Lohn, TX, was sentenced to two years in federal prison and ordered to pay $ 636,475.82 restitution for embezzling from the Lohn Independent School District (LISD) announced United States Attorney Robert Pitman and Special Agent in Charge R. Damon Rowe, Internal Revenue Service Criminal Investigation, Dallas Field Office.

Smith was remanded to the custody of the U.S. Marshals Service following today’s hearing to begin serving her prison term.

“Ms. Smith took advantage of her position at Lohn ISD and abused the trust of the school district and all taxpayers by stealing federal money and using it for her own purposes.  IRS Criminal Investigation commends the Texas Rangers for their assistance in the investigation,” said Damon Rowe, Special Agent in Charge of IRS Criminal Investigation, Dallas Field Office.  “IRS Criminal Investigation remains steadfast on focusing our efforts to ensure that these types of crimes are investigated and those abusing the public trust are held accountable.”

In June, Smith pleaded guilty to one count of tax evasion and one count of theft from an organization receiving federal funds.  By pleading guilty, Smith admitted that between September 2006 and September 2012, she stole LISD funds totaling $507,075.82 and used it for her personal benefit.  She also admitted to evading paying taxes on the embezzled funds, which constituted taxable income, by not disclosing it to the IRS on her yearly Income Tax returns. 

According to the factual basis filed in this case, Smith did not have signature authority over any LISD financial accounts, however, she had sufficiently gained the trust of the person with signature authority to the point that that person signed blank checks for funds that Smith would subsequently complete and make payable to either “cash” or fictitious payees.  Smith concealed her activities by recording false check amounts in the check register.  For years 2007 through 2011, Smith’s willful evasion of taxes on the funds she stole from LISD resulted in the underpayment of income tax in the amount of approximately $129,400.

This case was investigated by special agents with the IRS Criminal Investigation with the assistance of the Texas Rangers.  Assistant United States Attorney Matthew Devlin prosecuted this case on behalf of the Government.

In San Antonio today, U.S. District Judge Orlando Garcia sentenced 23-year-old Michael Douglas Glasenapp was sentenced to 220 months in federal prison followed by a 30 years of supervised release for distribution of child pornography announced United States Attorney Robert Pitman and FBI Special Agent in Charge Christopher H. Combs.

On March 21, 2013, federal authorities executed a search warrant at the defendant’s residence.  A forensics examination of computer related equipment revealed the presence of more than 400 images and 48 videos depicting child pornography some of which the defendant shared with others, including an undercover officer, via the Internet.  On April 17, 2014, Glasenapp pleaded guilty to the distribution charge. 

This investigation was conducted by the Federal Bureau of Investigation.  Assistant United States Attorneys Sarah Wannarka and Tracy Thompson prosecuted this case on behalf of the Government.

James Edward “Jasper” Jones, age  44, of Midland, TX, faces up to 20 years in federal prison after pleading guilty to two wire fraud charges in connection with a cattle purchasing scheme announced United States Attorney Robert Pitman and FBI Special Agent in Charge Douglas E. Lindquist.

According to court records, for approximately one year beginning in March 2011, Henry Resources retained Jones, doing business as Stampede Ranch and Lease Management (Stampede), to manage several of its ranching properties in West Texas. One such entity was JJB Lands, LLC (JJB Lands). 

In approximately April 2011, Jones agreed with JJB Lands that he would purchase $250,000 worth of cattle for a ranch near Eldorado, TX, and that amount was subsequently wire transferred to a Stampede bank account. Jones’ representations to JJB Lands concerning how he would use these funds were material in JJB Lands’ decision to transfer them.  In subsequent months, Stampede would invoice JJB Lands for additional purchases of cattle for this ranch, and JJB Lands paid those invoices.

In pleading guilty last Friday, Jones admitted that he did not actually use all of the money designated by JJB Lands for cattle purchases for that purpose, even though he had promised and represented otherwise.  Instead, Jones diverted a large portion of the funds for other purposes, including personal expenses.  When a cattle inventory was conducted in early March 2012 at the Eldorado ranch, approximately 120 head of cattle, which Jones represented to JJB Lands that he had purchased, could not be located.  The Government estimates the resulting loss to JJB lands exceeded $400,000. 

Jones remains on bond pending sentencing which is scheduled for 9:30am on December 5, 2014, before United States District Judge Robert A. Junell in Midland.

This investigation was conducted by the Federal Bureau of Investigation.  Assistant United States Attorney John Klassen is prosecuting this case on behalf of the Government.