Western District of Texas

Tempting Dash Sold For Record $1.7 Million

The remaining five quarter horses along with four embryos, part of more than 400 seized by federal authorities in June 2012 in connection with an alleged Los Zetas money laundering operation, have been sold for approximately $3.1 million, including Tempting Dash which sold for a record $1.7 million, announced United States Attorney Robert Pitman and Internal Revenue Service Criminal Investigation Special Agent in Charge Steve McCollough.

The horses, which were sold Friday, November 1, 2013, at Heritage Place Auction Facility in Oklahoma City, OK, included Tempting Dash, winner of the Dash for Cash at Lone Star Park race track in Grand Prairie, Texas, on October 24, 2009; Mr. Piloto, $1 million All American Futurity winner at Ruidoso Downs on Labor Day, 2010; Do Not Tempt Me, Dashin Follies; and, Separate Fire.

United States Attorney Robert Pitman noted that the proceeds from the sale of the quarter horses, totaling close to $12 million, will be held in escrow pending a final forfeiture action.  Court documents allege that the horses were bought by and for members of the Los Zetas drug cartel with proceeds from narcotics trafficking.

“Like all criminal organizations, the Zetas are motivated by money.  Identifying and taking their assets is an important way to lay an axe to the root of the tree.  The forfeiture of these assets would represent a major step in our efforts to interrupt the cartel’s activity within this country,” stated United States Attorney Pitman.  “It's always an added bonus when we are able to make the cartels effectively pay the costs of their own prosecutions.”

“This investigation has helped to disrupt this alleged international drug cartel’s U.S.-based money laundering operations and demonstrates the lengths that US law enforcement will go to deprive criminal organizations of the fruits of their illegal activities,” stated IRS-CI Special Agent in Charge Steve McCullough. 

The sale of the horses is being made as a result of a court order in U.S. v. Miguel Angel Trevino Morales, et al. (WDTX case number A12cr210) and in accordance with industry practices. 

Pelly Lee Mason, age 51, faces not less than thirty years and up to life in federal prison after pleading guilty to transporting a minor across state lines with intent to engage in criminal sexual activity.    

Mason came to the attention of law enforcement after a victim’s parent reported that Mason had performed sexual acts on her minor child.  The sexual acts had occurred on several occasions during a trip from Flagstaff, Arizona, to Orlando, Florida.  Some of the acts occurred while they were in San Antonio, Texas.  Mason admitted to having performed sexual acts on the minor child during this trip.  Mason has previously been convicted of engaging in lewd and lascivious conduct with a minor for which he served five years in prison.  As a result of that conviction, Mason was required to register as a sex offender but failed to register upon his release from prison.  Seven other victims have been identified since his arrest early this year.

This case is being investigated by the Federal Bureau of Investigation (FBI).  Assistant United States Attorney Bettina Richardson is prosecuting this case on behalf of the Government.

In San Antonio this morning, U.S. District Judge David A. Ezra sentenced Israel Hernandez, Jr., of Rio Bravo, TX, to 300 months in federal prison for his role in a crystal methamphetamine trafficking conspiracy plus an additional 30 months in federal prison for violating his supervised release announced United States Attorney Robert Pitman and Drug Enforcement Administration Special Agent in Charge Javier Pena.

On June 3, 2013, Hernandez pleaded guilty to one count of conspiracy to distribute a controlled substance.  By pleading guilty, Hernandez, a self-purported drug transportation coordinator, admitted that between March and September in 2012, he conspired with San Antonio residents Carlos Ruiz and Andrew Kessler, II, to transport crystal methamphetamine from Brownsville to Laredo.  On September 14, 2012, DEA Task Force agents seized approximately 15 pounds of 99.9% pure crystal methamphetamine inside Kessler’s vehicle while in Mission, TX.  According to court records, Ruiz offered to pay Kessler $1,200 for transporting the six kilograms of crystal methamphetamine to Laredo.  The next day, federal agents in San Antonio arrested Hernandez and Ruiz as they were attempting to locate Kessler and the missing crystal methamphetamine. 

On Monday, Judge Ezra sentenced Carlos Ruiz to 15 years in federal prison for his role in the conspiracy.  On August 8, 2013, Andrew Kessler was sentenced to seven years in federal prison for his role in the conspiracy.

The case was investigated by the Drug Enforcement Administration Task Force made up of investigators from the New Braunfels Police Department, San Antonio Police Department, Boerne Police Department, Balcones Heights Police Department, Comal County Sheriff’s Office, Guadalupe County Sheriff’s Office, Kendall County Sheriff’s Office and the Texas Department of Criminal Justice.

In El Paso 47-year-old El Paso attorney Marco Antonio Delgado, a.k.a. Marco Delgado Licon, faces up to 20 years in federal prison after a jury convicted him of conspiracy to launder up to $600 million in illegal drug proceeds announced United States Attorney Robert Pitman and Homeland Security Investigations Special Agent in Charge Dennis Ulrich.

Based on evidence presented during trial, the jury found that from a period of time between 2007 and 2008, Delgado conspired with other individuals to launder $600 million in illegal drug proceeds for members of the Milenio Drug Trafficking Organization. Two episodes of money laundering demonstrated to the jury included a Department of Homeland Security seizure in September 2007 of $1,000,000 in U.S. Currency traveling from Atlanta, GA to Mexico via El Paso; and, an HSI seizure of $50,000 in drug proceeds, in July 2008, in Chicago, IL, which was transported to El Paso and deposited in Delgado’s Attorney Interest on Lawyers’ Trust Account (IOLTA) bank account.

Delgado, who has remained in federal custody since his arrest in November 2012, is scheduled to be sentenced at 10:30am on January 24, 2014, before United States Senior District Judge David Briones.

Delgado is currently set to go to trial again on November 18, 2013, based on a separate indictment which charges him with two wire fraud counts and 15 money laundering counts. According to that indictment, in January 2010, Delgado, as a legal representative of FGG Enterprises, Inc. (FGG) signed a $121 million contract between FGG and the Comision Federal de Electricidad (CFE), a Mexican-state-owned utility company, for the acquisition and installation of equipment at the Agua Prieta II power plant located in Agua Prieta, Sonora, Mexico. Pursuant to the agreement, payments from CFE to FGG were to be deposited into a FGG bank account located in El Paso. The indictment alleges that Delgado, for the purpose of personal enrichment and without the consent of the sole owner of FGG, submitted a fraudulent written request to the Banco Nacional de Comercio Exterior in Mexico which caused two wire transfers—one on March 8, 2010, in the amount of $20 million and one on July 6, 2010, in the amount of $12 million—to be deposited into a bank account he controlled located in the Turks and Caicos Islands. The indictment further alleges that Delgado subsequently wire transferred approximately $1.15 million from the Turks and Caicos Island bank account to bank accounts in El Paso; Taos, NM; and, Pittsburg, PA, in order to conceal or disguise the nature, location, source ownership or the control of the proceeds from his scheme.

Upon conviction, Delgado faces up 20 years in federal prison per count. An indictment is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.

This indictment resulted from an investigation by Homeland Security Investigations (HSI). Assistant United States Attorneys Debra Kanof and Anna Arreola are prosecuting these cases on behalf of the Government.

In Del Rio, Hipolito Amaya, 35-year-old owner of AM-ROD Construction based in Eagle Pass, faces up to ten years in federal prison after pleading guilty to a bribery charge in connection with an alleged bribery, kickback and bid-rigging scheme in Maverick County announced United States Attorney Robert Pitman and FBI Special Agent in Charge Armando Fernandez.

Appearing before United States Magistrate Judge Collis White this afternoon, Amaya admitted that in May 2011, he submitted a $35,800 bid to Maverick County to construct a concrete sidewalk on Lago Vista in Precinct 4 of Maverick County.  Maverick County issued him a $17,900 check to commence work and then a $17,900 check for the completion of the sidewalk.  Amaya further admitted that he made cash payments to two Maverick County employees so that he could be paid in full for work he never performed. 

Amaya remains on bond pending sentencing scheduled for March 2014.

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

Raymond Holguin, Jr., of Odessa, Texas, faces up to 30 years in federal prison after pleading guilty this morning to defrauding My Community Federal Credit Union of millions of dollars announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent in Charge Douglas E. Lindquist, El Paso Division.

Holguin, age 35, was the third man to enter a plea to conspiracy to commit bank fraud in connection with this investigation. Michael Franco, age 40, and Gustavo Pizarro, age 37, both of Midland, previously entered guilty pleas to the same charge and are awaiting sentencing.

According to court records, beginning in April 2007, Holguin, Pizarro and Franco engaged in an 18-month-long scheme that defrauded the FDIC-insured financial institution through the issuance of fraudulent car loans. Holguin, operator of Motor City, an auto dealership in Odessa, TX; Pizarro, General Sales Manager at Motor City; and, Franco, a loan officer at My Community Federal Credit Union, all devised a plan to approve car loans for customers who did not meet the credit union’s lending standards.  Holguin and Pizarro presented auto loan applications to Franco that included false information such as inflated income.  Holguin and Pizarro would also add amenities to the cars that did not exist in an effort to increase the value of the car and receive a larger loan amount.  Franco never verified any of the information contained in the loan documents before processing the loans and, in return, was paid a kickback by Holguin for every car loan that was approved.  The scheme resulted in Franco approving more than 300 fraudulent car loans on behalf of Holguin and Pizarro which led to a loss at My Community Federal Credit Union of approximately $3.9 million dollars.

Franco is scheduled to be sentenced on November 22, 2013 before United States District Judge Robert A. Junell.  Pizarro is scheduled for January 9, 2014.  A sentencing date for Holguin has yet to be scheduled.

The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney V. LaTawn Warsaw.

In El Paso yesterday, U.S. District Judge Frank Montalvo sentenced 61-year-old Gary Lange of Haslett, Michigan, to two years in federal prison and ordered him to pay more than $2.89 million in restitution for scheming to secure and maintain a lucrative El Paso Independent School District special education services contract announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent in Charge Douglas E. Lindquist.

In February 2009, Lange pleaded guilty to one count of conspiracy to commit mail fraud and deprivation of honest services.  By pleading guilty, Lange admitted that from February 2003 to October 2007, he conspired with his business partner Joseph O’Hara of Albany, NY, former El Paso Independent School District Associate Superintendent Tomas Gabaldon and former El Paso Independent School District Trustee Sal Mena to fraudulently secure and maintain a contract to provide software to the special education department of EPISD and to provide services to obtain federal and state reimbursement funds for special education programs.  Lange further admitted that he facilitated O’Hara in paying $100,000 in bribes to Gabaldon and a $5,000 kickback to Mena in 2005 for their help in securing the contract for O’Hara’s company, Strategic Government Solutions, Inc.  SGS failed to provide working software to EPISD as required by the contract and it submitted improper claims for reimbursement funds.

“The sentencing of Mr. Lange once again demonstrates the continued commitment of the FBI to bring to justice those individuals who erode the public’s confidence in those entrusted to manage our educational institutions.  The FBI will continue to aggressively pursue individuals who place their personal interests above those of the taxpayers of El Paso,” stated FBI Special Agent in Charge Douglas E. Lindquist.

Gabaldon and O’Hara have been sentenced to four years and three years, respectively, in federal prison and ordered to pay the restitution to EPISD for their roles in the scheme.  Mena, who also pleaded guilty to a conspiracy charge, is scheduled to be sentenced at 9:00am on December 10, 2013, before Judge Montalvo.

The case was investigated by the Federal Bureau of Investigation along the U.S. Department of Education—Office of Inspector General.  Assistant United States Attorneys Chris Skillern, Donna Miller and Laura Gregory prosecuted this case on behalf of the Government.

A retired educator and husband of a federal prosecutor in Albuquerque, New Mexico, faces potential federal prison time after a federal jury convicted him late Friday afternoon of leaking information regarding a criminal investigation to a target announced United States Attorney Robert Pitman.

The jury convicted Danny Burnett of one count of giving notice of certain electronic surveillance and one count of making a false statement to federal investigators.  Evidence presented during trial revealed that on February 17, 2011, Burnett met at an Albuquerque restaurant with long-time friend Columbus Police Chief Angelo Vega and advised him that federal investigators had a wiretap on Vega’s phone.  Burnett was also convicted of making a false statement to federal investigators on February 28, 2012, when he denied notifying Vega that he was the subject of a firearms trafficking investigation.

“Breaching the integrity of a criminal investigation not only compromises the ability of authorities to enforce the law but, more importantly, jeopardizes the safety of law enforcement officers.  This prosecution demonstrates that we will pursue leaks and prosecute those responsible for unlawfully disclosing sensitive information,” stated United States Attorney Robert Pitman.

Burnett, who remains on bond pending sentencing, faces up to five years in federal prison per count.  Sentencing is scheduled for January 14, 2014.

This case was investigated by agents with the Department of Justice Office of the Inspector General (DOJ-OIG), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and Homeland Security Investigations (HSI).  Assistant United States Attorneys Steven Spitzer and Greg McDonald from the Western District of Texas are prosecuting this case on behalf of the government.

In San Antonio, 55-year-old Victor Zamarron, a former civilian contractor at Brooks Army Medical Center, was sentenced to 210 months in federal prison followed by 50 years of supervised release for downloading child pornography announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent in Charge Armando Fernandez, San Antonio Division.   

In September 2012, a routine information technology inspection revealed that Zamarron was downloading and viewing child pornography through the government computer system.  A subsequent search warrant executed by FBI agents at the defendant’s residence resulted in the seizure of two computers.  A forensics examination of those computers revealed the presence of more than 30,000 images depicting child pornography.  On June 24, 2013, Zamarron pleaded guilty to one count of receipt of child pornography.

This investigation was conducted by the Federal Bureau of Investigation together with the U.S. Army Criminal Investigation Division at Fort Sam Houston in San Antonio.  Assistant United States Attorney Tracy Thompson prosecuted this case on behalf of the government.

In San Antonio, 34-year-old Michael Albert Amirante was sentenced to 63 months in federal prison for robbing several banks in Texas and Michigan announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent in Charge Armando Fernandez, San Antonio Division.   

In addition to the prison term, United States District Judge Orlando Garcia ordered that Amirante pay $11,352 restitution to the financial institutions he robbed and be placed under supervised release for a period of three years after completing his prison term.

In January, Amirante pleaded guilty to three counts of unarmed bank robbery.  By pleading guilty, Amirante admitted that he robbed the San Antonio Federal Credit Union (SACU) branch on Bandera Road on August 30, 2012; the First Convenience Bank branch in Duncanville, TX, on April 18, 2012; and, the First Convenience Bank branch in Mesquite, TX, on May 29, 2012.  Amirante also admitted to robbing the Fifth Third Bank in Lansing, MI, on December 21, 2011. 

Amirante has been in federal custody since being arrested by FBI agents on August 30, 2012, following the SACU robbery.  This investigation was conducted by FBI agents in San Antonio, Dallas and Lansing together with the San Antonio, Duncanville, Mesquite and Lansing Police Departments.  Assistant United States Attorney Michael Hardy prosecuted this case on behalf of the government.

In El Paso this morning, U.S. District Judge Frank Montalvo sentenced 25-year-old Julio Adrian Pesqueira-Galaviz, to the statutory maximum of 15 years in federal prison followed by five years of supervised release for his leadership role in a scheme to illegally purchase firearms in the U.S. then smuggle them into Mexico for the purposes of arming members of the Sinaloa Drug Trafficking Organization announced United States Attorney Robert Pitman, Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Robert Champion, Dallas Division, and Drug Enforcement Administration Special Agent in Charge Joseph M. Arabit, El Paso Division.   

On June 26, 2013, Pesqueira pleaded guilty to one count each of conspiracy to make a false statement during the purchase of a firearm; false statement during the purchase of a firearm; and, conspiracy to transfer a firearm for use in a crime of violence or drug trafficking crime.  By pleading guilty, Pesqueira admitted that from July 2010 to May 2013, he purchased firearms, as well as provided money to individuals in order for them to purchase firearms, from El Paso area gun dealers to include a Barrett .50 caliber rifle and an assortment of various military style semi-automatic firearms including, AK-47’s, AR-15’s and Draco 7.62x39 caliber pistols. 

Pesqueira is the first of 11 defendants charged in this case to be sentenced.  This investigation was conducted by ATF and DEA agents together with investigators from Homeland Security Investigations and the El Paso Police Department. 

In Austin this morning, U.S. District Judge Sam Sparks sentenced 41-year-old Hussein Ali “Mike” Yassine, to three years in federal prison and ordered him to pay over $2.5 million restitution to the Internal Revenue Service for engaging in a tax fraud scheme using his Austin nightclubs.  Judge Sparks ordered that the three year term of imprisonment run consecutive to the 151–month prison term Yassine is currently serving for money laundering.

On February 6, 2013,Yassine pleaded guilty to one count of procuring the preparation of a false Income Tax Return.  By pleading guilty, Yassine admitted that in October 2010, he provided a professional tax preparer with false information to be included in Yassine’s 2009 federal Income Tax Return.  According to court documents, figures provided by Yassine understated by hundreds of thousands of dollars the actual gross receipts generated by his downtown Austin night clubs--Spill, Qua, Kiss & Fly, Pure and Malaia—in 2009. 

In January, Yassine was sentenced to 151 months in federal prison after a jury convicted him on money laundering charges.  The jury found that in 2008 and 2009, Yassine used several business establishments, including the above mentioned night clubs, to launder over $200,000 in cash, which he believed to be the proceeds of narcotics trafficking. 

This investigation was conducted by agents and investigators with the Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation and the Austin Police Department together with the Drug Enforcement Administration, Texas Attorney General’s Office, Texas Alcoholic Beverage Commission and the Texas Comptroller’s Office.  Assistant United States Attorneys Gregg Sofer and Alan Buie prosecuted this case on behalf of the Government.

Felon-In-Possession Charge Stems From the Illegal Sale of Firearms During an Austin Gun Show

In San Antonio, 65-year-old Manuel “Manny” Rodriguez of Spring Branch, TX, will remain in federal custody pending trial for being a convicted felon in possession of a firearm announced United States Attorney Robert Pitman and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Special Agent in Charge Melvin D. King, Houston Division.

A federal criminal complaint filed last week alleges that during a gun show in Austin on August 18, 2013, Rodriguez was in possession of an Intratec AB-10 9mm pistol which he later sold to an undercover officer for $650.00.  The complaint further states that Rodriguez served 47 months in federal prison based on a 2002 conviction in the Central District of California for possession of a machine gun and dealing firearms without a ATF license.

Based upon the criminal complaint, ATF agents on Friday arrested Rodriguez and executed a search warrant at the defendant’s residence where they seized a total of 76 firearms and approximately $15,000 in U.S. Currency.  The seized firearms included numerous AR-15 and AK-47 assault rifles.

This afternoon, United States Magistrate Judge John Primomo ordered Rodriguez held without bond.  Rodriguez faces ten years in federal prison upon conviction.

This continuing investigation is being conducted by ATF special agents in Austin and San Antonio together with Homeland Security Investigations (HSI) agents.  Assistant United States Attorney Jay Hulings is prosecuting this case on behalf of the Government.   

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

In San Antonio this afternoon, 26–year-old Jose Abram Lopez-Lozano, a resident of Michoacàn, Mexico, was sentenced to 36 months in federal prison in connection with an undocumented alien smuggling incident which resulted in three deaths announced United States Attorney Robert Pitman and Homeland Security Investigations (HSI) Special Agent in Charge Janice Ayala.

On March 27, 2013, Lopez-Lozano pleaded guilty smuggling undocumented aliens for financial gain.  On the same day, his co-defendant, 32-year-old Javier Silva-Morales, a resident of Monterrey, Mexico, pleaded guilty to one count of smuggling undocumented aliens resulting in death.  By pleading guilty, both admitted to transporting smuggled undocumented aliens on February 6, 2013, from Falfurrias, TX, to Houston when a Wilson County Sheriff’s deputy attempted to conduct a traffic stop near Poth, TX.  A vehicle chase ensued.  After losing sight of the vehicle, deputies subsequently discovered several individuals at the end of an open field standing on top of what appeared to be the same vehicle which was now submerged under water.   A total of 13 individuals, including both defendants, were apprehended by sheriff’s deputies with assistance from Texas Department of Public Safety troopers. HSI agents later determined that the 13 were in the United States without proper documentation and placed them under arrest.  A Texas Department of Public Safety dive team dispatched to the scene recovered three bodies from the bottom of the water near the vehicle. 

On July 7, 2013, U.S. District Judge Xavier Rodriguez sentenced Silva-Morales to 150 months in federal prison. 

This case was investigated by HSI, the Texas Department of Public Safety and the Wilson County Sheriff’s Office.  Special Assistant United States Attorney Christina Playton prosecuted this case on behalf of the Government.

Federal authorities have charged 52-year-old Veracruz, Mexico businessman Francisco Colorado Cessa, his son, 25–year-old Francisco Colorado Cessa, Jr., and a business associate, 52–year-old Ramon Segura Flores for attempting to bribe a federal judge announced United States Attorney Robert Pitman and FBI Special Agent in Charge Armando Fernandez, San Antonio Division. 

On May 9, 2013, a federal jury convicted Colorado Cessa of conspiring to commit money laundering for his role in a complex scheme to launder millions of dollars in illicit Los Zetas drug trafficking proceeds to purchase, train, breed, and race American quarter horses in the United States.  Yesterday afternoon, Colorado Cessa was sentenced to the statutory maximum of 20 years in federal prison.

A federal criminal complaint filed yesterday charges Colorado Cessa, Colorado Cessa, Jr. and Segura Flores with conspiracy to bribe a federal judge.  The complaint alleges that over the past couple of months the defendants conspired to pay a $1.2 million bribe to a federal judge in order to secure a reduced sentence for Colorado Cessa.  According to the criminal complaint, at no time before or during this investigation was the judge involved in the alleged criminal activity.

“We have said from the beginning that this case represents our commitment to keep the violence and corruption associated with Mexican drug cartels out of the United States.  The sentences handed down yesterday emphasize our determination to seek the most severe penalties for importing the brand of corruption that has become endemic in Mexico.  The latest allegation, if proven, demonstrates that individuals associated with the most violent drug cartel believe that they can corrupt what we hold as the bedrock of American justice – the United States Courts.  This community should rest assured that we will stop at nothing to send the message that we are one step ahead of them and if they continue to try to function as they do in Mexico, we will find them, we will stop them, and we will do whatever it takes to ensure that they are punished to the full extent of the law,” stated United States Attorney Robert Pitman.

FBI agents arrested Colorado Cessa, Jr., and Segura Flores yesterday evening without incident.  All three remain in federal custody at this time.  Initial appearances are scheduled for 2:00 pm this afternoon before United States Magistrate Judge Andrew Austin in Austin. 

Upon conviction, the defendants face up to five years in federal prison and a maximum $250,000 fine.  This case is being investigated by the FBI.

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

In Austin, Eusevio Maldonado Huitron, a 50-year-old horse trainer residing in Austin was sentenced this morning to 97 months in federal prison followed by three years of supervised release for his role in a complex conspiracy to launder millions of dollars in illicit Los Zetas drug trafficking proceeds to purchase, train, breed, and race American quarter horses in the United States announced United States Attorney Robert Pitman, FBI Special Agent in Charge Armando Fernandez, Richard Weber, Chief, Internal Revenue Service Criminal Investigation and DEA Special Agent in Charge Javier Pena.

United States District Judge Sam Sparks this morning also sentenced co-defendant Raul Ramirez, age 21 of El Paso, TX, to one year plus one day in federal prison after pleading guilty prior to trial to the conspiracy charge.  Other co-defendants who pleaded guilty to various federal charges prior to trial received probation sentences today including: Zulema Trevino, age 39 (3 years); Alexandra Garcia Trevino, age 22, of Oceanside, CA, (2 years); 33-year-old horse trainer Adan Farias of Norco, CA, (3 years); and 29–year-old Felipe Alejandro Quintero of Los Alamitos, CA, (3 years).  Judge Sparks also ordered that Farias, Quintero and Ramirez each pay a $3,600 fine.  Sentencing for 27-year-old Carlos Miguel Nayen Borbolla of Santa Anna, CA, was postponed.

Yesterday, Judge Sparks sentenced 46-year-old Jose Trevino Morales of Balch Springs, TX, and Francisco Colorado Cessa, a 52-year-old Veracruz, Mexico businessman, each to 240 months in federal prison; and, Fernando Solis Garcia, a 30-year-old horse trainer and purchasing agent from Ruidoso, NM, to 160 months in federal prison followed by three years of supervised release for their roles in the money laundering scheme.  Jose Trevino Morales is the brother of purported Los Zetas leaders, Miguel Trevino Morales (aka “40”) and Oscar Omar Trevino Morales (aka “42”).

On May 9, 2013, a federal jury convicted Jose Trevino Morales, Francisco Colorado Cessa, Fernando Solis Garcia, and Eusevio Maldonado Huitron of one count of conspiracy to commit money laundering.  Evidence presented during trial revealed that Los Zetas are a powerful drug cartel based in Mexico and generate multi-million dollar revenues from drug trafficking.  Since 2008, Miguel and Oscar Trevino Morales would direct portions of the bulk cash generated from the sale of illegal narcotics to Jose Trevino and his wife, Zulema Trevino, for purchasing, training, breeding and racing American quarter horses in the United States.

Testimony also revealed a shell game by the defendants involving straw purchasers and transactions worth millions of dollars in New Mexico, Oklahoma, California and Texas to disguise the source drug money and make the proceeds from the sale of quarter horses or their race winnings appear legitimate.  Furthermore, the defendants implemented a scheme to structure cash deposits in amounts under $10,000 in order to circumvent mandatory bank reporting requirements.

Over 400 quarter horses (which were seized by federal authorities in June 2012 as part of the above-mentioned money laundering operation) have been sold for approximately $9 million.  Most of the horses were sold at Heritage Place Auction Facility in Oklahoma City, Oklahoma in the past year including A Dash of Sweet Heat, which sold for $1 million.  Approximately 100 broodmares were sold prior to auction for approximately $35,000.  The federal government still retains possession of five quarter horses, including Tempting Dash, winner of the Dash for Cash at Lone Star Park race track in Grand Prairie, Texas, on October 24, 2009; Mr. Piloto, $1 million All American Futurity winner at Ruidoso Downs on Labor Day 2010; Dashin Follies; Separate Fire; Y516, a yearling seized in Lexington, OK; and four embryos transferred from donor mares, Dashin Follies and Separate Fire.  

U.S. Attorney Pitman noted that the proceeds from the sale of these quarter horses are being held in escrow pending the resolution of a forfeiture action.  The Government also seeks the forfeiture of real property in Lexington, OK; farm and ranch equipment located at that site; and funds contained in multiple bank accounts allegedly used in the defendants’ scheme.  The Government also seeks a monetary judgment in the amount of $60 million representing property involved in and derived from the conspiracy.

Authorities continue to seek the apprehension of seven co-defendants in this case including purported leaders of the Los Zetas, Miguel Trevino Morales (aka “40”) and his brother, 39-year-old Oscar Trevino Morales (aka “42”), as well as 32–year-old Victor Manuel Lopez,  41-year-old Sergio Guerrero Rincon, 41-year-old Luis Gerardo Aguirre, Erick Jovan Lozano Diaz and Gerardo Garza Quintero. 

This investigation was conducted by agents with the Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation and the Drug Enforcement Administration with assistance from the United States Marshals Service, Immigration and Customs Enforcement Homeland Security Investigations (ICE-HSI) and U.S. Customs and Border Patrol, as well as local law enforcement agents in Irving, TX, Lorena, TX, Bruceville-Eddy, TX, Fort Worth, TX and Laredo, TX.  The investigation received assistance from the Texas Army National Guard, Cleveland County (OK) Sheriff’s Office, and the Oklahoma and New Mexico Racing Commissions.  The U.S. Attorney’s Office for the Eastern District of Texas prosecuted several members of the Los Zetas drug cartel on drug trafficking charges related to this conspiracy and provided substantial assistance to this investigation.  The U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) provided assistance with the forfeiture action in this case.

In Del Rio, Texas this morning, Maverick County Precinct Four Commissioner Cesar Flores, age 46 of Eagle Pass, Texas, pleaded guilty to his role in a bribery, kickback and bid-rigging scheme announced United States Attorney Robert Pitman and FBI Special Agent in Charge Armando Fernandez.  This is the third Maverick County Commissioner to plead guilty as part of this investigation.

Flores pleaded guilty to count one of his indictment, which charged him with receiving bribes.  Flores admitted that he agreed to be influenced and rewarded for using his position to ensure that certain contractors were awarded construction contracts in Maverick County Precinct 4 in 2010 and in 2011—those contracts involved in excess of $5,000. 

Flores faces up to ten years in federal prison, a $250,000 fine, three years of supervised release, and, pursuant to his plea agreement, he will pay restitution as ordered by the Court at sentencing.  Flores will appear before Judge Alia Moses for sentencing at a date to be determined.

This ongoing investigation is being conducted by the Federal Bureau of Investigation and the Texas Department of Public Safety.  Individuals who have first-hand information about corruption, fraud, or bribery related to Maverick County are urged to contact the FBI at (210) 225-6741.

Assistant United States Attorney Michael Galdo is prosecuting this case on behalf of the Government.

In Austin this afternoon, three men including Jose Trevino Morales, the brother of purported Los Zetas leaders, Miguel Trevino Morales (aka “40”) and Oscar Omar Trevino Morales (aka “42”),  were sentenced to lengthy federal prison terms for their roles in a complex conspiracy to launder millions of dollars in illicit Los Zetas drug trafficking proceeds to purchase, train, breed, and race American quarter horses in the United States announced United States Attorney Robert Pitman, FBI Special Agent in Charge Armando Fernandez, Richard Weber, Chief, Internal Revenue Service Criminal Investigation and DEA Special Agent in Charge Javier Pena.

United States District Judge Sam Sparks sentenced Jose Trevino Morales, age 46, of Balch Springs, TX, and Francisco Colorado Cessa, a 52-year-old Veracruz, Mexico businessman, each to 240 months in federal prison followed by three years of supervised release.  Judge Sparks also sentenced Fernando Solis Garcia, a 30-year-old horse trainer and purchasing agent from Ruidoso, NM, to 160 months in federal prison followed by three years of supervised release.  Judge Sparks also remanded Garcia into federal custody following today’s hearing.

“The activities of Mexican drug cartels have taken a terrible toll within Mexico.  This prosecution and the sentences imposed today should send a clear message to those who would attempt to import their brand of corruption and violence into the United States.  We will find you, we will prosecute you and we will seek the most severe consequences the law allows,” stated United States Attorney Robert Pitman. 

On May 9, 2013, a federal jury convicted Jose Trevino Morales, Francisco Colorado Cessa, Fernando Solis Garcia, and Eusevio Maldonado Huitron of one count of conspiracy to commit money laundering.  Evidence presented during trial revealed that Los Zetas are a powerful drug cartel based in Mexico and generate multi-million dollar revenues from drug trafficking.  Since 2008, Miguel and Oscar Trevino Morales would direct portions of the bulk cash generated from the sale of illegal narcotics to Jose Trevino and his wife, 39-year-old Zulema Trevino, for purchasing, training, breeding and racing American quarter horses in the United States.

Testimony also revealed a shell game by the defendants involving straw purchasers and transactions worth millions of dollars in New Mexico, Oklahoma, California and Texas to disguise the source drug money and make the proceeds from the sale of quarter horses or their race winnings appear legitimate.  Furthermore, the defendants implemented a scheme to structure cash deposits in amounts under $10,000 in order to circumvent mandatory bank reporting requirements.

 “Today’s sentencing marks the successful culmination to a complex, intensive investigation where the FBI, working together with U.S. Attorney’s Office and our law enforcement partners, has demonstrated the ability to dismantle the financial arm of a violent and ruthless drug cartel which has attempted to influence and control legitimate U.S. enterprises and threatened the safety of our community,” stated FBI Special Agent in Charge Armando Fernandez.

Drug Enforcement Administration Special Agent in Charge Javier F. Peña stated, “DEA is satisfied with today’s sentencings. Each sentence handed out today represents the relentless hard work and unyielding dedication DEA and its counterparts utilized to bring the defendants to justice.” 

Over 400 quarter horses (which were seized by federal authorities in June 2012 as part of the above-mentioned money laundering operation) have been sold for approximately $9 million.  Most of the horses were sold at Heritage Place Auction Facility in Oklahoma City, Oklahoma in the past year including A Dash of Sweet Heat, which sold for $1 million.  Approximately 100 broodmares were sold prior to auction for approximately $35,000.  The federal government still retains possession of five quarter horses, including Tempting Dash, winner of the Dash for Cash at Lone Star Park race track in Grand Prairie, Texas, on October 24, 2009; Mr. Piloto, $1 million All American Futurity winner at Ruidoso Downs on Labor Day 2010; Dashin Follies; Separate Fire; Y516, a yearling seized in Lexington, OK; and four embryos transferred from donor mares, Dashin Follies and Separate Fire.  

U.S. Attorney Pitman noted that the proceeds from the sale of these quarter horses are being held in escrow pending the resolution of a forfeiture action.  The Government also seeks the forfeiture of real property in Lexington, OK; farm and ranch equipment located at that site; and funds contained in multiple bank accounts allegedly used in the defendants’ scheme.  The Government also seeks a monetary judgment in the amount of $60 million representing property involved in and derived from the conspiracy.

“Today’s sentencing of top leaders of the Los Zetas crime syndicate is a decisive blow against its drug trafficking and money laundering network. It also sends a clear message to those who attempt to hide their ill-gotten gains through investment in legitimate businesses,” said Richard Weber, Chief, IRS Criminal Investigation. “All financial transactions leave a trail and we have the unique expertise to follow those leads. The special agents of IRS Criminal Investigation are committed to taking the profit away from drug traffickers and putting those individuals in jail. IRS Criminal Investigation was proud to provide this financial expertise as we worked alongside our law enforcement partners and bring these brutal criminals to justice.” 

Authorities continue to seek the apprehension of seven co-defendants in this case including purported leaders of the Los Zetas, Miguel Trevino Morales (aka “40”) and his brother, 39-year-old Oscar Trevino Morales (aka “42”), as well as 32–year-old Victor Manuel Lopez,  41-year-old Sergio Guerrero Rincon, 41-year-old Luis Gerardo Aguirre, Erick Jovan Lozano Diaz and Gerardo Garza Quintero.  Co-defendants Zulema Trevino, Jose Trevino Morales’ daughter Alexandra Garcia Trevino, age 22, of Oceanside, CA, 33-year-old horse trainer Adan Farias of Norco, CA, 27-year-old Carlos Miguel Nayen Borbolla of Santa Anna, CA, 29–year-old Felipe Alejandro Quintero of Los Alamitos, CA, Eusevio Maldonado Huitron, a 50-year-old horse trainer residing in Austin; and 21-year-old Raul Ramirez of El Paso, TX, are scheduled to be sentenced tomorrow beginning at 9:00am before Judge Sparks in Austin.

This investigation was conducted by agents with the Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation and the Drug Enforcement Administration with assistance from the United States Marshals Service, Immigration and Customs Enforcement Homeland Security Investigations (ICE-HSI) and U.S. Customs and Border Patrol, as well as local law enforcement agents in Irving, TX, Lorena, TX, Bruceville-Eddy, TX, Fort Worth, TX and Laredo, TX.  The investigation received assistance from the Texas Army National Guard, Cleveland County (OK) Sheriff’s Office, and the Oklahoma and New Mexico Racing Commissions.  The U.S. Attorney’s Office for the Eastern District of Texas prosecuted several members of the Los Zetas drug cartel on drug trafficking charges related to this conspiracy and provided substantial assistance to this investigation.  The U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) provided assistance with the forfeiture action in this case.

Normangee Police Chief Joseph Ray “Jody” Navarro, age 40, is in federal custody charged with allegedly using a law enforcement computer system to aid a methamphetamine trafficker announced United States Attorney Robert Pitman, Texas Department of Public Safety (DPS) Director Steven McCraw and Leon County Sheriff Kevin Ellis.

A criminal complaint, filed last Thursday and unsealed today, charges the Madisonville, Texas, resident with one count of intentionally exceeding authorized access to a protected computer.  According to the criminal complaint, in May 2013, Navarro ran a background check on a name supplied to him by suspected methamphetamine trafficker and Normangee resident Brenda Antanette Evans, age 45. 

A separate, but related, criminal complaint filed last Thursday and unsealed today, charges Evans and 25–year-old Joshua Troy Thomas of Normangee with one count of possession with intent to distribute methamphetamine.  According to that complaint, on April 26, 2013, during an undercover investigation, Evans purchased close to one ounce of methamphetamine from Thomas on behalf of an undercover agent for approximately $1,200.

Authorities arrested Navarro and Thomas yesterday without incident.  Both had their Initial Appearances in Federal court this morning and are scheduled to have a detention hearing on September 3, 2013, before United States Magistrate Judge Jeffrey C. Manske in Waco.  Evans has yet to be apprehended.  Upon conviction, Navarro faces up to five years in federal prison and a maximum $250,000 fine; Thomas and Evans, up to 20 years in federal prison and a maximum $250,000 fine.

This ongoing investigation is being conducted by the Texas Department of Public Safety Criminal Investigation Division, Leon County Sheriff’s Office and the Federal Bureau of Investigation.  Agents with the Drug Enforcement Administration as well as Deputy U.S. Marshals assisted with the arrests.  Assistant United States Attorney Mary Kucera is prosecuting this case on behalf of the Government. 

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

In El Paso, 36-year-old Manuel Gerardo Velasquez (aka “Shorty”), an El Paso cell ringleader for the Vicente Carrillo Fuentes drug trafficking organization, will remain in federal custody pending trial for allegedly operating a Continuing Criminal Enterprise (CCE) responsible for the smuggling and distribution of more than 1,000 kilograms of marijuana and the repatriation of drug proceeds to the Republic of Mexico announced United States Attorney Robert Pitman and Drug Enforcement Administration Special Agent in Charge Joseph M. Arabit.

This morning, Velasquez waived his right to a detention hearing originally scheduled for today in United States Magistrate Court in El Paso.  A 13-count federal grand jury indictment returned on August 7, 2013, charges Velasquez and others with one count of conspiracy to possess with intent to distribute marijuana. The indictment alleges that from January 1997 until the present, the defendants conspired to distribute more than 1,000 kilograms of marijuana throughout Texas, Oklahoma and into Kansas.  In addition to the drug conspiracy charge, Velasquez is charged with one count of operating a continual criminal enterprise, one count of conspiracy to commit money laundering, eight counts of aiding and abetting the intentional possession of marijuana; and, two counts of maintaining a drug involved premise.  The indictment also seeks the criminal forfeiture of proceeds derived from the criminal scheme including cash and eight real estate properties in El Paso; Afton, OK; and, Grove, OK.  During this investigation, authorities have seized some 3,800 pounds of marijuana and approximately $10,000 in U.S. Currency.

Other defendants charged in this indictment include: 39-year-old Jose Antonio Cabral-Espinoza, a Mexican citizen residing in El Paso; 30-year-old Juan Carlos Campa-Gutierrez of Juarez, Mexico; 44-year-old Cesar Ricardo Olague-Duran, of Juarez, Mexico; 47-year-old Octavio Alonso Montenegro-Muniz of El Paso; 58-year-old Cecil Ellis Blythe of Afton, OK; 32-year-old Carlos Alberto Gijon of El Paso; 31-year-old Daniel Medina of El Paso; 44-year-old Mario Garcia-Reveles, a Mexican citizen residing in El Paso; 31-year-old Joshua Lee Harris of Wichita, KS; 61-year-old Richard Lee Harris of Wichita, KS; 31-year-old Endi Alberto Renteria Bravo of Wichita, KS; 74-year-old Gilberto Velasquez, Sr., of El Paso; 66-year-old Victoria Consuelo Velasquez of El Paso; 52-year-old Sally Barraza-Mena of El Paso; and, 40-year-old Maria Elena Avila of El Paso.  Blythe, Gijon, Medina, Gilberto and Victoria Velasquez, Barraza and Avila have been released on bond pending trial.  The other named defendants are in custody.

 “The numerous arrests and seizures that occurred in this investigation have severely disrupted the operations of this drug trafficking organization.   In El Paso and all across our region, DEA and our partners are determined to continue to identify drug traffickers, shut down their operations and bring them to justice,” stated DEA Special Agent in Charge Joseph M. Arabit, El Paso Division.

Velasquez faces between 20 years and life in federal prison upon conviction of the CCE charge.  All of the defendants face between ten years and life in federal prison upon conviction of the drug trafficking conspiracy charge. 

This case resulted from an investigation by the Drug Enforcement Administration together with Homeland Security Investigations, U.S. Border Patrol, U.S. Marshals Service, El Paso County District Attorney’s Office, El Paso Police Department, Anthony Police Department, El Paso County Sheriff’s Office and the Texas Office of the Attorney General.   

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

In Austin, 34-year-old Antonio Cervantez faces federal prison time after pleading guilty to federal charges stemming from a bank robbery in May announced United States Attorney Robert Pitman and FBI Special Agent in Charge Armando Fernandez, San Antonio Division.

Appearing before United States Magistrate Judge Mark Lane this afternoon, Cervantez pleaded guilty to one count of bank robbery and one count of possession of a firearm during a crime of violence.  By pleading guilty, Cervantez admitted that on the afternoon of May 29, 2013, he robbed the Bank of America located on West Parmer Lane in Austin.  A bank customer, who witnessed the robbery from the drive-through banking lane, called the police and followed Cervantez after he fled the scene.  Cervantez drove to his residence in the 4300 block of Northridge where authorities subsequently arrested him and recovered approximately $30,000 stolen from the bank and a .380 caliber firearm.

Cervantez, who has remained in custody since his arrest on May 29, 2013, faces up to 25 years in federal prison on the bank robbery charge and a mandatory seven year consecutive prison term for the firearm charge.  He will be sentenced at a later date by United States District Judge Sam Sparks.

This case was investigated by the Austin Violent Crime Fugitive Task Force.  The Task Force is made up of investigators from the Federal Bureau of Investigation, Austin Police Department and the Round Rock Police Department.  Assistant United States Attorney Gregg N. Sofer is prosecuting this case on behalf of the Government.

A federal grand jury in San Antonio this week returned a bribery indictment against 41–year-old James Paul Council, a former project manager in the Facilities Department at the University of Texas at San Antonio, and three other San Antonio area residents in connection with a bribery scheme announced United States Attorney Robert Pitman and FBI Special Agent in Charge Armando Fernandez.  As of today, all four defendants have surrendered to federal authorities.

The 17-count indictment charges Council; 47-year-old Alfredo Romero Gonzalez, owner of Power Source Electric, an electrical construction and repair business in San Antonio; 60-year-old Power Source Electric chief estimator and project manager Magin Villalon (a.k.a. “Buddy”); and, Villalon’s wife, 56-year-old Sarah Anne Luna with one count of conspiracy to commit bribery concerning programs receiving Federal funds and four counts of mail fraud.  Council is also charged with six counts of receiving a bribe; the other defendants, six counts of paying a bribe.

According to the indictment, from approximately August 2011 through September 2012, the defendants allegedly conducted a scheme to bribe a purchasing officer in order to secure UTSA construction contracts.  The indictment further alleges that the defendants colluded in the submission of fraudulent, inflated bids to UTSA under the names of sham companies, GNZ Enterprise, LLC and Vista Contracting, and fixed at least 40 UTSA contracts.  Authorities estimate the submitted bids totaled more than $200,000.  Furthermore, the indictment alleges that Council received cash as well as improvements to his residence for his role in the scheme.

Upon conviction, the defendants face up to five years imprisonment on the conspiracy count, up to ten years imprisonment for each bribery related count and up to 20 years in federal prison for each mail fraud count.  All four defendants are on bond pending further court proceedings.

This indictment resulted from an investigation conducted by the agents with the Federal Bureau of Investigation together with the San Antonio Police Department and the University of Texas at San Antonio Police Department.  Assistant United States Attorney James Blankinship is prosecuting this case on behalf of the Government.

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

Law Enforcement testimony revealed that defendant possessed over 1,000 videos and 100 images depicting child pornography

In Del Rio, 39-year-old Ruben A. Vazquez, a teacher at Calderon Elementary in the San Felipe Independent School District, faces a minimum of five years in federal prison after a jury convicted him this afternoon of child pornography charges, announced United States Attorney Robert Pitman and Homeland Security Investigations (HSI) Special Agent in Charge Janice Ayala.

The jury convicted Vazquez of one count of receipt of child pornography, one count of distribution of child pornography and one count of access with the intent to view child pornography.  Evidence presented during trial revealed that Vazquez was using peer to peer file sharing programs to access, receive and distribute videos of child pornography.  Law enforcement officers testified that Vazquez admitted to them that he had over 1,000 images and over 100 videos of child pornography. 

On June 21, 2012, HSI special agents executed a search warrant at the defendant’s residence and seized several computers and related equipment.  According to court records, a forensics evaluation of the seized items revealed the presence of child pornography videos that depict minors engaging in sexually explicit conduct along with evidence of child pornography files that had previously resided on the computer. 

Vazquez faces between five and 20 years in federal prison on each receipt and distribution count; and, up to ten years in federal prison on the access count.  Vazquez remains in federal custody pending sentencing scheduled for January 16, 2014, before United States District Judge Alia Moses.

This case was investigated by HSI agents together with the investigators from the Beaumont Police Department.  Assistant United States Attorneys Meghan McCalla and Ralph Paradiso are prosecuting this case on behalf of the Government.

Midland resident and land surveyor Steven Leonard Prewit, age 54, faces up to ten years in federal prison after pleading guilty this afternoon to the possession of unregistered silencers in violation of National Firearms Registration requirements, announced United States Attorney Robert Pitman, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Dallas Field Office Special Agent in Charge Robert Champion and Federal Bureau of Investigation (FBI) Special Agent in Charge Mark Morgan.

Appearing this morning before United States Magistrate Judge David Counts in Midland, Prewit admitted to illegally possessing eight (8) unregistered firearms silencers.  According to court records, a search by the ATF and FBI of both his home and a ranch near Balmorhea on May 2, 2013, uncovered the silencers as well as a number of fully automatic machine guns and improvised explosive devices (IEDs).  Specifically, Prewit possessed eight (8) firearms silencers, eighteen (18) fully automatic machine guns, one (1) short barreled rifle and four (4) IEDs; all of which were unregistered.  All eight of the unregistered firearms silencers did not have serial numbers or manufacturer’s markings as required. 

The investigation into Prewit began in March of this year when ATF and FBI agents received information that Prewit was in possession fully automatic machine guns, firearms silencers and IEDs.  An FBI undercover employee was on the ranch with Prewit in both March and April of 2013 when he saw Prewit in possession of multiple fully automatic machine guns, silencers and IEDs.  Prewit admitted to the FBI undercover employee that none of the weapons, silencers and/or IEDs was registered to him and that he knew they should have been.  

Under Title 26, United States Code, Chapter 53, any individual who possesses a machine gun, destructive device, or firearm silencer is required by federal law to register the firearms and/or devices with the Alcohol Tobacco and Firearms (ATF) National Firearms Act Branch (NFA).  The applicant must complete and have approved an ATF Form 4: Application for Tax Paid Transfer and Registration of the Firearm and pay a tax.  After the application is approved, the firearm may be transferred and the applicant will be entered into the National Firearms Registration and Transfer Record. 

In exchange for Prewit’s guilty plea today, the government has agreed to dismiss counts one and two which involved the possession of the machine guns and explosive devices.  Prewit will remain on bond pending his sentencing hearing later this fall.  Assistant United States Attorney LaTawn Warsaw is prosecuting this case on behalf of the Government.

Four Defendants Were Convicted Of Submitting False Claims To FEMA

United States Attorney Robert Pitman announced today that on Thursday, August 15, 2013, United States District Judge Sam Sparks sentenced Roy Albert McDougald, Jr., age 46, formerly of Spicewood, Texas, to imprisonment for 12 months and a day for making a false claim for housing benefits to the Federal Emergency Management Agency (“FEMA”) in the wake of the wildfires that erupted in Central Texas around Labor Day 2011. McDougald was the fourth of four defendants to be sentenced in the Austin Division of the Western District of Texas for similar crimes related to the wildfires.

The fires began on August 30, 2011, and destroyed more than a thousand homes as they continued into September. President Obama declared a major disaster on September 9, 2011. FEMA personnel began arriving in Central Texas to provide disaster relief while the wildfires were still burning, and they eventually processed thousands of applications for individual benefits. Among other forms of monetary relief, benefits up to a maximum of $30,200 were available to owners of homes that had been damaged or destroyed.

On December 4, 2012, a federal grand jury in Austin, Texas indicted three defendants on charges of filing a fraudulent claim for federal disaster relief, in violation of 18 U.S.C. § 1014. The Defendants were McDougald; Manuel Hernandez, age 53, of Smithville, Texas; and Ginger Roe, age 65, of Temple, Texas. On February 19, 2013, the federal grand jury indicted Andre Oliver, age 48, of Paige, Texas, on similar charges.

Each indictment alleged that the defendant had made a claim to FEMA for housing benefits, asserting that the wildfires had destroyed a trailer home that he or she owned and lived in as his or her primary residence. Each of the indictments alleged that the defendant’s claim was false and fraudulent, either because the trailer home was not the defendant’s primary residence or because the defendant did not own the trailer home. Hernandez, Roe, and Oliver each received $30,200 from FEMA based on their applications, and McDougald received $20,420.

Each of the four defendants eventually entered into a plea bargain with the United States Attorney’s Office, under which the defendants pleaded guilty to making a false claim to the United States, in violation of 18 U.S.C. § 287. McDougald was the last of the defendants to be sentenced, and the other three received sentences as follows: • On May 10, 2013, Judge Sparks sentenced Hernandez to a five-year term of probation and a $3,000 fine.
• On June 24, 2013, Judge Sparks sentenced Oliver to imprisonment for 12 months and a day, followed by a 3-year term of supervised release.
• On July 25, 2013, United States District Judge Lee Yeakel sentenced Roe to a five-year term of probation.

Each of the four of the defendants was also ordered to repay to FEMA the money they received as a result of their false claim ($30,200 each for Hernandez, Olive and Roe, and $20,420 for McDougald).

These cases were investigated by the Office of Inspector General of the United States Department of Homeland Security.

In San Antonio this afternoon, Chief U.S. District Judge Fred Biery sentenced 36-year-old Gemase Lee Simmons of San Antonio to 10,776 months, or 898 years, in federal prison after convicting him in February of 39 counts of various bank fraud and child pornography related offenses announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent in Charge Armando Fernandez.

In addition, Judge Biery ordered that Simmons pay $52,788.12 in restitution and a special assessment of $3,900.  Simmons has been in federal custody since his arrest in January 2012. 

“This man abused and exploited his victims in unspeakable ways.  This sentence will ensure that he will not pose a risk to the public again,” stated United States Attorney Robert Pitman.

On February 11, 2013, following a six-day bench trial, Judge Biery convicted Simmons of six counts of bank fraud, four counts of extortion and 29 counts of sexual exploitation of a child including production, distribution, transportation, receipt and possession of child pornography.

Testimony and evidence introduced during trial established that between May 2011and January 2012, Simmons and others at his direction knowingly engaged in an approximate $70,000 check kiting scheme using local bank accounts.  Simmons directed other individuals to withdraw cash from bank accounts he and others established using checks drawn on other bank accounts which Simmons knew either had insufficient funds or were closed.

Testimony also revealed that Simmons and others used those proceeds to implement and further a child exploitation scheme.  Acting as himself and by assuming fake personas, Simmons recruited, enticed and coerced over 100 minors and adults, male and female, to engage in sexually explicit conduct and recorded the activity under the pretenses of helping them establish a modeling career.  Testimony also revealed that Simmons oftentimes transmitted the images and videos of sexually explicit conduct to his female victims as a means to control them.  Simmons then threatened to release the sexually explicit material publicly if the victims did not comply with his requests for additional images and sexual activity.

The case was investigated by the Federal Bureau of Investigation.  Assistant United States Attorneys Tracy Thompson and Bettina Richardson prosecuted this case on behalf of the Government.

In San Antonio this morning, 29-year-old Abdullahi Omar Fidse, a citizen of Somalia, was sentenced to eight years in federal prison after admitting to making false statements under penalty of perjury during a terrorism investigation announced United States Attorney Robert Pitman, Federal Bureau of Investigation Special Agent In Charge Armando Fernandez, San Antonio Division and Acting Special Agent in Charge Vincent Iglio, Homeland Security Investigations (HSI) in San Antonio.

“This prosecution demonstrates the vigilance of the federal government in detecting and disabling individuals who seek to enter the country illegally with the purpose of doing harm.  We will continue to be aggressive in protecting our borders and seeking severe punishment for those who violate our laws,” stated U.S. Attorney Robert Pitman.

According to court records, on June 24, 2008, Fidse and 25-year-old Deka Abdalla Sheikh, who was serving as Fidse’s English interpreter, arrived at the Hidalgo, TX, Port of Entry without any identification and claimed asylum based upon Fidse’s father being murdered by “al-Qaida” in the father’s store in Mogadishu, Somalia, while in the presence of Fidse.  Fidse was placed in an Immigration Detention Facility located in Pearsall, Texas, while his asylum claim was investigated. 

Recorded conversations between Fidse and Sheikh during Fidse’s detention revealed that prior to arriving in Hidalgo, the defendants admittedly planned to provide false testimony to authorities about how they first met, that they were married and that they had lived together for three years.  Furthermore, they discussed hand signals to be used to communicate during hearings in an effort to ensure that their individual testimony would match.  

Fidse’s stories changed over the course of his detention, including who was responsible for his father’s death.  Fidse initially told Customs and Border Protection officers that al-Qaida killed his father while they lived in Somalia.  He subsequently told an Immigration Court judge that the Islamic Courts were responsible for his father’s death.  In truth, his father had died of natural causes years before and Fidse actually had lived in Kenya since he was in grade school.  Because of Fidse’s credibility and his inability to get his story straight on who killed his father, on March 31, 2009, the Immigration Court denied Fidse’s asylum request.  He remained in the detention facility since he is a Somali national and travel documents could not be obtained from that country.

The previously mentioned recordings also revealed discussions Fidse had with an undercover source in which Fidse professed his support for violent, radical Jihad; the killing of non-Muslims; and, his adoration for Osama Bin Laden.  While still in custody, Fidse also made recorded comments that he purchased an armed vehicle and weapons to be used by terrorists.  Fidse told an undercover source how he bought a vehicle and armed it for an al-Shabaab squad and that the vehicle was ultimately destroyed while fighting the Ethiopian defense forces supporting the Somalia Transitional Government.  Fidse also told the undercover source that, “We are terrorists.”

Fidse initially denied making the recorded statements when interviewed by federal investigators and furthermore, refused to provide them with more specifics about the armed vehicle.  However, on December 5, 2012, Fidse pleaded guilty to one count of conspiracy to obstruct an immigration proceeding and one count of conspiracy to make a false statement during a terrorism investigation.  Today, Fidse received four years imprisonment for each count to run consecutively.  On September 20, 2012, Sheikh pleaded guilty to one count of conspiracy to make a false statement in a terrorism investigation.  By pleading guilty, Sheikh admitted that she and Fidse conspired to provide false information to authorities to gain entrance into the United States as well as provide false information to authorities concerning support for terrorist organizations.  Yesterday, Judge Biery sentenced her to five years probation.

“This case demonstrates the Joint Terrorism Task Force's commitment to protecting the U.S. from individuals who seek to do us harm by gaining entry to the U.S. through deception, manipulation and violation of the law,” stated FBI Special Agent in Charge Armando Fernandez.

“Homeland Security Investigations’ (HSI) unique law enforcement authorities provide the tools essential to investigating a wide variety of criminal violations and immigration offenses.  These authorities proved to be a critical advantage in building a case against Abdullahi Omar Fidse,” said HSI Acting Special Agent in Charge Vincent Iglio. “HSI will continue to use it’s vast investigative enforcement authorities to help prosecute those who threaten our national security or provide support to those who intend to do harm against our citizens.”

This case was investigated by agents with the Joint Terrorism Task Force, Federal Bureau of Investigation (FBI), Homeland Security Investigations (HSI), U.S. Border Patrol, and the Department of Homeland Security Citizenship and Immigration Services (CIS) and Detention and Removal Operations (DRO).  Assistant United States Attorney Mark Roomberg prosecuted this case on behalf of the government.

Bryan Ray Allen, 32, of San Juan Capistrano, California, faces an agreed sentence of forty-eight (48) months in federal prison after admitting to interference with a flight crew, United States Attorney Robert Pitman, FBI Special Agent in Charge Mark Morgan, El Paso Division, and Midland Police Chief Price Robinson announced today.

Appearing in United States District Court before Judge Robert Junell in Midland this afternoon, Allen pleaded guilty to one count of interference with a flight crew.  According to the factual basis filed in the case, on May 23, 2013, Allen boarded Southwest Airlines flight 863 in Los Angeles, California, with a final destination of Dallas, Texas.  The flight had stops in Las Vegas, Nevada, and Midland, Texas. Allen admitted that in the twenty-four hours before the flight he smoked methamphetamine twice and drank whiskey at the airport.  On the flight from Las Vegas to Midland, Allen began hallucinating.  He believed the pilots of the plane were evil and that it was a “plane ride to hell”.  Allen felt he needed to either get off the plane or get into the cockpit to stop the pilots.  As the plane began its descent into Midland, after all the passengers were instructed to remain seated, Allen approached the cockpit door, ignoring flight crew instructions to return to his seat and attempted multiple times to enter the cockpit.  Once the plane landed, Allen pushed a flight attendant out of the way of the cabin door and ran up the jet way ramp into the airport where he was met by Midland Police Department officers who had to physically subdue him. 

Allen has been and will remain in the custody of the United States Marshals pending a sentencing hearing on October 10, 2013, before United States District Judge Robert A. Junell in Midland.

This case was investigated by the Federal Bureau of Investigation with assistance from the Midland Police Department.  Assistant United States Attorney V. LaTawn Warsaw is prosecuting this case on behalf of the Government.

Incident resulted in the deaths of two area residents and serious injury to a third

David Steiner, a 39–year-old Vinegar Bend, AL, resident faces 20 years in federal prison after pleading guilty to felony assault of a U.S. Border Patrol agent announced United States Attorney Robert Pitman and Rodolfo Karisch, Del Rio Sector Chief Patrol Agent, U.S. Border Patrol.

Appearing before United States Magistrate Judge Collis White in Del Rio this morning, Steiner pleaded guilty to one count of assaulting, resisting, or impeding an officer by using a deadly or dangerous weapon.  By pleading guilty, Steiner admitted that on May 25, 2012, he used his vehicle to charge at three Border Patrol agents near Langtry, Texas, during an attempt to avoid potential detention after fleeing from a traffic stop near Comstock, Texas. 

As a result of Steiner’s actions, the agents were forced to drive off the paved roadway to avoid being struck by Steiner.  Agents gave chase and the pursuit continued toward Sanderson, Texas.  The pursuit ended when Steiner hit an oncoming vehicle killing two occupants and gravely injuring the driver. 

Steiner, who has remained in custody since his arrest, is scheduled to be sentenced at 9:00am on December 17, 2013, before United States District Judge Alia Moses.

This case was investigated by agents with the Department of Homeland Security – U.S. Customs and Border Protection Office of Internal Affairs with assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives, Kinney County Sheriff’s Office, Terrell County Sheriff’s Office and the Texas Department of Public Safety.  Assistant United States Attorney Ralph Paradiso is prosecuting this case on behalf of the Government.

Jack Nealy, a former San Antonio Police officer, now faces up to ten years in federal prison after pleading guilty to being a convicted felon in possession of a firearm, announced United States Attorney Robert Pitman and ATF Special Agent in Charge Melvin D. King, Houston Division.

Appearing before U.S. Magistrate Judge Pamela Mathy yesterday afternoon, Nealy, who was convicted in federal court in the Western District of Texas of bank robbery in 1993 and served a sentence of 121 months imprisonment, admitted that in November 2011, he was in possession of a .40 caliber pistol and was wearing a replica United States Department of State badge, when he was apprehended in the parking lot of a San Antonio nightclub.

Nealy, who remains in federal custody, is scheduled to be sentenced on October 24, 2013, before U.S. District Judge Orlando Garcia in San Antonio.

This investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives together with the San Antonio Police Department and the U.S. Diplomatic Security Service.

A federal grand jury in San Antonio has returned an indictment charging a former City of San Antonio employee in connection with a bribery scheme announced United States Attorney Robert Pitman and FBI Special Agent in Charge Armando Fernandez.

The three-count indictment, returned late yesterday, charges 49-year-old Oscar Gilberto Rodriguez of San Antonio with one count of paying a bribe concerning a program receiving federal funds and 35-year-old Irene Avina Morales of San Antonio with one count of receiving a bribe concerning a program receiving federal funds and one count of money laundering.

According to the indictment, between June 2008 and August 2009, Rodriguez paid Morales, an employee in the city’s Neighborhood Service Department $5,100 in an effort to secure a $26,040 contract with the city to clean up a lot on Maridel Avenue.  The indictment further alleges that in September 2008, Morales conducted a financial transaction designed to conceal and disguise the nature of the bribe money.

Upon conviction, the defendants face up to 10 years imprisonment on the bribery related count.  Morales is also subject to a maximum 20 years in federal prison upon conviction of the money laundering count.

This indictment resulted from an investigation conducted by the agents with the Federal Bureau of Investigation.  Assistant United States Attorney James Blankinship is prosecuting this case on behalf of the Government.

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

A federal grand jury in San Antonio has returned an indictment charging two San Antonio area men and a Manhattan, KS, woman for their roles in a scheme to defraud the United States in connection with contracts worth millions of dollars’ for medical equipment and personnel training announced United States Attorney Robert Pitman.

The 40-count indictment, returned late yesterday, charges 42-year-old Lawrence Peter Fenti of New Braunfels, TX, 50-year-old Heidi Lynn Webster and 43-year-old John Walter Hoffman, owner/operator of Hoffman Surgical Devices, Inc. in San Antonio, with one count of conspiracy to commit wire fraud.  Fenti is also charged with seven counts of bribery, seven counts of wire fraud, seven counts of making false statements to U.S. Army authorities, five counts of money laundering, four counts of making false claims against the U.S., four counts of participating in a government matter affecting personal interest and one count of impersonation of a U.S. Army officer.  Webster is also charged with seven counts of bribery, seven counts of wire fraud, four counts of making false claims against the U.S., and four counts of participating in a government matter affecting personal interest.  Hoffman is also charged with five counts of money laundering, two counts of wire fraud and two counts of making false statements to U.S. Army authorities.

According to the indictment, Fenti was a non-commissioned officer trained as a technician who worked in the radiology departments of various Army medical facilities including Irwin Army Medical Center at Fort Riley, KS, and Brooks Army Medical Center (BAMC) at Fort Sam Houston in San Antonio.  In 2008, Fenti was selected as the non-commissioned officer in charge of Base Realignment and Closure issues for BAMC radiology.  From 1995 until 2006, Webster was an Army officer physician specializing in radiology at BAMC and Irwin.  In 2006, Webster was discharged from the Army but continued to work under a contract with the Army to provide radiology services at Irwin.   In 2007 and 2008, Webster formed two KS corporations—MRI Resources, Inc. and Pro Veteran Staffing, Inc.  Data Dynamics Inc. was a Grafton, ND, company engaged in the business of transcribing medical records.  It was certified by the Small Business Administration as owned by a socially and economically disadvantaged person and was eligible to obtain certain federal contracts with, or with limited, competition. 

The indictment alleges that since 2007, the defendants schemed to secure multiple Army contracts and sub-contracts for radiology equipment and services by using their positions of influence, taking advantage of Data Dynamics’ non-competitive bidding status, making false statements and fraudulent claims, as well as bribing Army personnel and Army contractors.  Those contracts included a $2 million BAMC magnetic resonance imaging (MRI) contract in June 2008, a $4.9 million BAMC MRI contract in July 2008, a $633,406.69 BAMC staffing contract in September 2008, and a $336,600 MRI contract in September 2009 for Womack Army Medical Center at Fort Bragg, NC.

Once contracts were secured by a prime contractor, typically by Data Dynamics, the defendants allegedly stole money from the Army by causing the prime contractor to overcharge the Army and then submitted substantially overinflated invoices from MRI Resources or Pro Veteran Staffing to prime contractors, allowing the defendants’ companies to collect monies that had not been earned.

Upon conviction, defendants face up to 20 years imprisonment for each bribery, money laundering and wire fraud count; up to five years imprisonment for each conspiracy, false statement and false claim count; and, up to three years imprisonment for the impersonation of a U.S. Army officer.  The indictment also seeks a monetary judgment against Webster in the amount of $613,828 and Fenti in the amount of $542,485.35, representing the amount of proceeds obtained directly or indirectly as a result of their fraudulent scheme.

This indictment resulted from an investigation conducted by the U.S. Army Criminal Investigations Division.  Assistant United States Attorney James Blankinship is prosecuting this case on behalf of the Government.

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

A San Antonio man who is currently under federal indictment for allegedly shooting his common-law wife multiple times on Fort Sam Houston last month faces a new charge of conspiracy to kill a witness to prevent testimony and in retaliation for providing information to law enforcement announced United States Attorney Robert Pitman and Federal Bureau of Investigation San Antonio Division Special Agent in Charge Armando Fernandez.

A federal criminal complaint filed this morning against 51–year-old Alvin Leon Roundtree alleges that from June 26, 2013 until July 7, 2013, Roundtree conspired with his nephew, 28-year-old Leonard Roundtree, Jr., of Richardson, TX, to hire an individual to kill Alvin Roundtree’s common-law wife.  According to the complaint, in recordings of multiple telephone calls placed by Alvin Roundtree from the GEO federal jail facility to Leonard Roundtree, Alvin told Leonard that he was going to pay an individual $10,000 to kill his common-law wife to prevent her from testifying against him in his upcoming trial and for providing information to investigators about the June 10, 2013, shooting incident.  According to the complaint, Leonard Roundtree agreed to deliver a pre-payment of $1,000 to the individual solicited to commit the murder plus $9,000 more after the murder was carried out.

Leonard Roundtree was arrested yesterday in Richardson, TX.  He had his initial appearance in federal court in Dallas earlier today where he waived his detention hearing and agreed to be transferred to the Western District of Texas for further court proceedings.  Upon conviction of the conspiracy to kill charge, each defendant faces up to life in federal prison.

This case is being investigated by the Federal Bureau of Investigation (FBI) and the United States Marshals Service together with the U.S. Army Criminal Investigation Division and the San Antonio Police Department.  Assistant United States Attorney Bettina Richardson is prosecuting this case on behalf of the Government. 

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

In Del Rio, three Texas Syndicate members from Uvalde, TX, face up to life in federal prison after a federal jury convicted them last night of various violations of federal racketeering offenses committed in Uvalde, San Antonio and the surrounding areas announced United States Attorney Robert Pitman.

Jurors convicted 38-year-old Raul “Fatboy” Rodriquez, 37-year-old Mike “Big Mike” Cassiano and 35-year-old Cristobal “Little Cris” Velasquez of conspiracy to violate the Racketeering Influenced Corrupt Organization (RICO) statute.  Evidence presented during the trial revealed that Rodriquez, Cassiano and Velasquez, along with eleven other Texas Syndicate members and associates, conspired since 2002 to commit three murders, one attempted murder, extortion, plus distribution of controlled substances.

In addition to the conspiracy charge, jurors convicted:

• Rodriquez of a violent crime in aid of racketeering, namely the murder of Rogelio Mata in Uvalde, Texas on October 13, 2002, for allegedly failing to follow the rules of the Texas Syndicate;
• Velasquez of conspiracy to commit violent crime in aid of racketeering and the substantive charge of violent crime in aid of racketeering for the murder of Jose Guadalupe de la Garza on December 25, 2005, in Uvalde, Texas for allegedly disrespecting the Texas Syndicate as well as conspiracy to commit robbery in violation of the RICO statute; and,
• Cassiano, who previously held a leadership role in the criminal organization in 2005, of two counts of conspiracy to commit violent crime in aid of racketeering for the Jose Guadalupe de la Garza murder and the November 9, 2009, murder of Jesse James Polanco in Uvalde.  Mr. Polanco was murdered because it was suspected he was cooperating with law enforcement.

The following 11 co-defendants are awaiting sentencing after pleading guilty prior to trial to violating the RICO statute:  Sotero Rodriguez Martinez (a.k.a. “June”) of Uvalde; Chuco Mario Martinez (a.k.a. “Mariachi”) of Uvalde; Jose Andres Torres (a.k.a “Yogi”) of Uvalde; Larry Munoz, Jr. (a.k.a. “Little Larry”) of Uvalde; Brian Esparza (a.k.a. “Tata”) of Uvalde; Charles Esparza (a.k.a. “Horse”) of Uvalde; Ervey Sanchez (a.k.a. “Mad Max”) of Uvalde; Inez Mata (a.k.a. “Bebito”) of Uvalde; Mark Anthony Vela of Hondo, Texas; Mario Alberto Gonzales (a.k.a. “The Enforcer”) of Hondo; and, Charles Olan Quintanilla of Hondo.

In a separate, but related matter, on June 20, 2013, a federal jury in Del Rio returned guilty verdicts against Eli Torres and Alfredo Tapia III, the last two defendants involved in a narcotics distribution ring operating in Hondo, Uvalde, San Antonio and the surrounding areas.  This narcotics distribution ring was connected to and associated with the Texas Syndicate prison gang. 

Jurors convicted 37-year-old Eli Torres of Uvalde of conspiracy to possess with the intent to distribute 500 grams or more of cocaine from August 1, 2009, until September 28, 2011.  Evidence presented at trial revealed that Torres, as a member of the Texas Syndicate, participated in this drug distribution ring by using the organization’s drug distribution connections to aid him in obtaining cocaine to sell on the streets of Uvalde.  Torres faces between ten years and life in federal prison for this conviction.  Torres was also found guilty of possession with the intent to distribute 500 grams or more of cocaine within 1,000 feet of the Sacred Heart Parish School in Uvalde.  As a result, he faces between five and 80 years in prison for this conviction.  Torres, who remains in federal custody, awaits sentencing scheduled for December 16, 2013.

Jurors also convicted 42-year-old Alfredo “Naco” Tapia, III, of conspiracy to possess with the intent to distribute 500 grams or more of cocaine from August 1, 2009, until September 28, 2011.  He was also found guilty of conspiracy to possess with the intent to distribute 100 kilograms or more of marijuana from August 1, 2009 until September 28, 2011.  Tapia faces between five and 40 years in federal prison for each conviction.  Evidence presented at trial revealed that Tapia was associated with members of the Texas Syndicate prison gang and facilitated their distribution of cocaine and marijuana.

The other members of the conspiracy listed below are all awaiting sentencing after entering guilty pleas prior to trial.  They include: Jose Alberto Ruiz (a.k.a. “Spike”), of Uvalde; Calletano Nira (a.k.a. “Cat) of Hondo; Joshua Leonard Benavides of Hondo; Ted Benavides (a.k.a. “TJ”) of Hondo; Jessica Escareno of Hondo; Ruben Dominguez of Hondo; Sandra Torres of Uvalde; Jaime Corona, Jr., of Hondo; John Khosravi of San Antonio; and, former Bandera County Sheriff’s Deputy Thomas Cuellar of Hondo.  On April 2, 2013, Cuellar pleaded guilty to one count of unlawful use of a government computer and one count of possession with intent to distribute cocaine.  By pleading guilty, Cuellar admitted that on August 31, 2010, he unlawfully accessed a department computer in order to obtain law enforcement information regarding co-conspirators.  As a result, Cuellar faces up to twenty years in federal prison on the drug charge and up to five years in federal prison on the unlawful access charge. Only Cuellar and Sandra Torres are currently on bond pending sentencing; all other defendants remain in federal custody.

These prosecutions resulted from a joint investigation by the Federal Bureau of Investigation with the Texas Department of Public Safety--Criminal Investigations Division, San Antonio Police Department, Medina County Sheriff’s Office and the Bandera County Sheriff’s Office.  Also assisting in the investigation was the 38th Judicial District Adult Probation Gang Unit, Texas Department of Criminal Justice and the U.S. Bureau of Prisons.  The U.S. Marshals Service, U.S. Immigration and Customs Enforcement-Customs and Border Protection and the Uvalde County Sheriff’s Department assisted in making the arrests. These cases were prosecuted by Assistant United States Attorneys Erica Giese, Ralph Paradiso and Patrick Burke.

In San Antonio, 46-year-old Robert Brooks, of Lantana, TX, was sentenced to 135 months in federal prison followed by five years of supervised release and ordered to pay approximately $8.5 million restitution for his role in a mortgage fraud operation involving a series of “property flip” schemes announced United States Attorney Robert Pitman; Armando Fernandez, Special Agent in Charge of the Federal Bureau of Investigation, San Antonio Division; and, Steve McCullough, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation in San Antonio.

On January 29, 2013, a federal jury convicted Brooks of one count of conspiring to commit bank, wire and mail fraud, eight counts of mail fraud and two counts of aiding the filing of false income tax returns. 

Evidence presented during trial revealed that 20 individuals, under the direction of Robert Brooks, participated in a mortgage fraud scheme from May 17, 2005, until February 21, 2008, whereby Brooks purchased properties at fair market value then resold at an artificially inflated price to straw purchasers.  Brooks recruited his co-defendants–appraisers, loan processors, title company employees, straw purchasers, etc.–and provided them with kickbacks from loan proceeds for their participation in the scheme.  Evidence also revealed that Brooks used the proceeds from the purported sales to various nominees to pay for his initial purchase of real estate, to pay closing costs for both his purchase and sale to the nominee, to pay the nominee’s down-payment, to pay the nominee for the nominee’s participation, and to pay the mortgage for the first 12 months, after which each mortgage went into default.  Brooks’ mortgage loan scheme involved over 40 properties primarily located in the Dallas area and defrauded financial institutions in Dallas, Austin, San Antonio and Houston of over $20 million.  Jurors also found that Brooks caused the submission of false 2007 income tax returns for himself and his wife, and for a partnership, which contained a false business expense.

Brooks is the only defendant in this case to be sentenced; 14 are awaiting sentencing after entering guilty pleas; and, seven are still pending trial.  This case resulted from an investigation by agents from the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation.  Assistant United States Attorney William R. Harris is prosecuting this case on behalf of the government.

Operation Stolen Dreams was organized by President Obama’s interagency Financial Fraud Enforcement Task Force, which was established to lead an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit StopFraud.gov.

Federal, state and local authorities have arrested 18 individuals, including the operator of three locations of Kash Tobacco & Novelties in Austin as well as the owner of the Best Foods #2 convenience store and Hang Ten Smoke Shop in San Antonio, for their roles in synthetic cannabinoid distribution operations announced United States Attorney Robert Pitman, Drug Enforcement Administration Special Agent in Charge Javier Pena, Houston Division, and Federal Bureau of Investigation Special Agent in Charge Armando Fernandez, San Antonio Division.  In addition to the arrests, authorities in the Western District of Texas have seized thousands of packages containing synthetic marijuana, cash, and an assortment of materials used to manufacture synthetic cannabinoids.

U.S. Attorney Pitman noted that these arrests based on federal charges represent a major step by federal, state and local law enforcement agencies to address the emerging problem of designer drugs in our communities before it becomes a significant law enforcement and public health hazard as it has become in other communities.  “Let me be clear about this.  This is not marijuana.  These are chemical substances that are, to the user, completely unknown and that pose potentially serious health risks.  There have been reports in our own community of people, especially young people, who have had potentially serious health effects from their use,” stated U.S. Attorney Pitman.  He added, “To the owners and operators of convenience stores and smoke shops who sell illegal designer drugs, we are here to tell you that this is just the beginning of our effort to enforce the law with respect to the sale of these potentially dangerous substances.  To people in the community who think that designer drugs are a safe and legal option, we hope that this will provoke an understanding not just that they are illegal, but that you are playing a game of Russian roulette when you put these unregulated and unknown chemicals into your body.”

In Austin, a five-count federal grand jury indictment, returned on June 18, 2013, and unsealed today, charges six Austin area residents with one count of conspiracy to possess with intent to distribute synthetic cannabinoids.  Those six include Austin residents 45-year-old Zikar R. Ali, operator of three Kash Tobacco & Novelties in Austin; 43-year-old Mehdi Rahim Ali; 41-year-old Karim Rahim Ali ; 36-year-old Syed Ali; and; as well as Round Rock residents 40-year-old Aziz Velani and 20-year-old Azeem Choudhary.  In addition, Mehdi Ali, Karim Ali, Syed Ali and Zikar Ali each face two counts of possession with intent to distribute synthetic cannabinoids while Velani and Choudhary each face one count of possession with intent to distribute synthetic cannabinoids.

“Today, the Drug Enforcement Administration and its counterparts caused a significant blow to those who allegedly distribute, operate or manufacture ‘synthetic’ or ‘designer drugs’,” said DEA Special Agent in Charge Javier Peña.  “These illegal, dangerous and deadly concoctions are designed, marketed and sold to our youth under catchy names and colorful packaging; all in an effort to outwit the law.  Today’s operation should put would-be traffickers on alert that DEA and its counterparts will not tolerate any type of illegal controlled substances to be distributed in our communities,” SAC Peña added.

In San Antonio, a criminal complaint was filed today against 19 individuals--12 of whom were arrested today-- charging them with one count of conspiracy to possess with intent to distribute synthetic cannabinoids.  A list of the defendants is attached.  According to the complaint, the defendants are responsible for the production and distribution of synthetic marijuana and bath salts in San Antonio, Houston, Austin, Dallas and Laredo as well as Tulsa and Oklahoma City, OK. 

“These arrests demonstrate the FBI’s steadfast commitment to protecting the community by working long-term, joint investigations aimed at dismantling criminal organizations.  The drug targeted during these investigations, synthetic marijuana, is of particular concern to the FBI and our law enforcement partners since it is specifically designed and marketed to deceive the user of its lethality, and is often targeted at those who are most vulnerable in our society; young adults, teenagers and children,” stated Federal Bureau of Investigation Special Agent in Charge Armando Fernandez, San Antonio Division.

Synthetic cannabinoids, also known as synthetic marijuana, “Spice,” “K2,” or “Kush,” comprise a large family of chemically unrelated structures functionally similar to THC, the primary psychoactive ingredient in organic marijuana.  When ingested, synthetic cannabinoids produce psychoactive effects that are similar to the effects of THC, but often with pronounced and dangerous side-effects.

Synthetic cannabinoid products consist of organic plant matter that is sprayed with a mixture of acetone and synthetic cannabinoid chemical compounds.  These chemicals are unregulated, often produced in China, and imported to the United States where they are then applied to organic plant matter to render them ingestible by smoking.  Generally, the product is packaged in foil baggies which falsely state that the product is “herbal incense” and “not for human consumption” in an attempt to avoid prosecution.   The product may be sold in brick and mortar “smoke shops,” convenience stores, adult book stores, as well as, over the Internet.  Synthetic cannabinoid products are marketed under many different brand names, including those mentioned above, as well as, “Scooby Snax,” “Paradise,” “Mad Monkey,” “Sexy Monkey,” and “Devil Eye,”    

These are chemical substances that are, to the user, completely unknown and that pose potentially serious health risks.  For example, from January 1, 2010 through February 28, 2013, the Texas Poison Center Network reported receiving 1,627 calls about exposure to synthetic cannabinoids and that some individuals exposed experienced symptoms to include agitation, tachycardia, elevated blood pressure, vomiting, hallucinations and confusion. 

Upon conviction, the defendants face up to 20 years in federal prison and a maximum $250,000 fine per count. An indictment or a criminal complaint is merely a charge and should not be considered as evidence of guilt.  The defendants are presumed innocent until proven guilty in a court of law.

These investigations resulted from the efforts of the Drug Enforcement Administration and the Federal Bureau of Investigation together with the Internal Revenue Service-Criminal Investigation, Immigration and Customs Enforcement - Homeland Security Investigations, U.S. Border Patrol, Austin, San Antonio and New Braunfels Police Departments, the Texas Department of Public Safety, Texas Attorney General’s Office, Travis County District Attorney’s Office, Travis County Sheriff’s Office, Williamson County Sheriff’s Office, Williamson County Constables Office-Precinct 2, Bastrop County Sheriff’s Office, Live Oak Police Department and the Texas Alcoholic Beverage Commission. ICE Enforcement and Removal Operations also assisted with today’s arrests.  Assistant United States Attorney’s Mark Marshall and Chris Peele are prosecuting the Austin case; Mark Roomberg and Jay Hulings, the San Antonio case.

Investigation stems from an abandoned marijuana load discovered on Van Horn school bus last year

In Alpine, two men face federal drug trafficking charges related to the discovery of more than 480 pounds of marijuana on a Van Horn ISD school bus last year announced United States Attorney Robert Pitman and DEA-El Paso Division Special Agent in Charge Joseph M. Arabit.

A two-count federal grand jury indictment, returned Tuesday in Pecos, TX, and unsealed following their arrests yesterday, charges 22–year-old Anthony Paredez-Juarez of Odessa, TX, and 20–year-old George Jacob Cosme-Baird of Presidio, TX, with one count of attempted possession of between 100 kilograms and 1,000 kilograms of marijuana and one count of possession with intent to distribute between 100 kilograms and 1,000 kilograms of marijuana within 1,000 feet of a school, namely Presidio High School.

The indictment stems from an investigation resulting from a marijuana seizure on November 19, 2012, at a convenience store in Marfa, TX.  Earlier in the day, the school bus was used to transport students from Van Horn to Presidio, TX, for a basketball game and was now en route back to Van Horn. According to authorities, the bus driver alerted U.S. Border Patrol agents, who were also at the convenience store, when he noticed several duffle bags in the bay area of the bus which not there when they departed Van Horn.  The agents took possession of the duffle bags after discovering the marijuana inside.

“This case involved a particularly brazen act of using a school bus and students as cover for a drug load. These arrests and federal charges should send a message that law enforcement agencies will work together to ensure that persons involved in this type of activity are brought to justice, especially when the safety of our children is concerned.  This case also shows the importance of the cooperation we receive from vigilant and honest citizens, without whose assistance we could not do our jobs,” stated DEA-El Paso Division Special Agent in Charge Joseph M. Arabit.

Upon conviction, each defendant faces a minimum of five years in federal prison per count.  The statutory maximum sentence for conviction of the school zone related drug charge is 80 years incarceration and a $10 million fine. The statutory maximum sentence for conviction of the other drug charge is 40 years incarceration and a $5 million fine. Both defendants remain in federal custody pending the outcome of a detention hearing scheduled for 9:30am on June 19, 2013, before U.S. Magistrate Judge B. Dwight Goains in Alpine, TX.

This indictment resulted from an investigation conducted by the Drug Enforcement Administration (Alpine) together with the U.S. Border Patrol, Homeland Security Investigations (HSI-Alpine) and the Texas Department of Public Safety Narcotics Division (Alpine).  Assistant United States Attorney James J. Miller, Jr., 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 Eagle Pass last night, Federal Bureau of Investigation agents along with Texas Department Public Safety investigators arrested 52-year-old Salvador Castillon, owner of South Texas Concrete based in Eagle Pass, in connection with an alleged bribery, kickback and bid-rigging scheme announced United States Attorney Robert Pitman and FBI Special Agent in Charge Armando Fernandez.

A federal grand jury indictment, returned yesterday and unsealed this morning, charges Castillon with two counts of paying a bribe to an agent of an organization receiving federal funds.  According to the indictment, Castillon was awarded Maverick County construction contracts totaling $416,800 in 2010 and $148,000 in 2011.  The indictment alleges that in exchange for each Maverick County construction contract he was awarded, Castillon agreed to pay a Maverick County commissioner between $3,000 and $5,000. 

Upon conviction, Castillon faces up to ten years in federal prison and a maximum $250,000 fine per count. 

Castillon appeared before U.S. Magistrate Judge Collis White in Del Rio this morning for his initial appearance.  Judge White ordered that Castillon remain in custody pending the outcome of a detention hearing scheduled for 9:00am on Monday, June 17, 2013.

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

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

Former Maverick County Solid Waste Authority general manager and chief executive officer of the Maverick County landfill Hector Chavez, Jr., faces up to ten years in federal prison, a fine of up to $250,000 and restitution to the County after pleading guilty to theft concerning programs receiving federal funds announced United States Attorney Robert Pitman and FBI Special Agent in Charge Armando Fernandez.

Appearing before U.S. Magistrate Judge Victor Garcia this morning in Del Rio, Chavez admitted that from March 9, 2012, to December 28, 2012, he pocketed over $62,000 in forged Maverick County checks he drafted himself. 

Also this morning before Judge Garcia, general contractor Jose Telles, Jr., of Eagle Pass, TX, pleaded guilty to paying a bribe to an agent of an organization receiving federal funds.  As a result of his plea, Telles faces up to ten years in federal prison and a fine of up to $250,000.  By pleading guilty, Telles admitted that in 2010, he paid a $5,000 bribe to a Maverick County commissioner after being awarded an approximate $30,000 construction contract with Maverick County.

Telles is scheduled to be sentenced on December 9, 2013, before U.S. District Judge Alia Moses in Del Rio; Chavez, September 17, 2013, before U.S. District Judge David A. Ezra in Del Rio.

To date, 12 individuals have pleaded guilty to federal charges and await sentencing in connection with this investigation.  This ongoing investigation is being conducted by the Federal Bureau of Investigation and the Texas Department of Public Safety.  Individuals who have first-hand information about corruption, fraud, or bribery related to Maverick County are urged to contact the FBI at (210) 225-6741.  Assistant United States Attorney Michael Galdo is prosecuting these cases on behalf of the Government.

This morning in San Antonio, a federal criminal complaint was filed against 51–year-old Alvin Leon Roundtree of San Antonio alleging domestic violence on Fort Sam Houston announced United States Attorney Robert Pitman, Federal Bureau of Investigation San Antonio Division Special Agent in Charge Armando Fernandez and San Antonio Police Chief William McManus.

According to the criminal complaint, yesterday afternoon Roundtree approached his common-law wife in the A Medical Center and School on Fort Sam Houston to discuss their recent separation.  The complaint alleges that after a verbal altercation regarding her decision to leave the defendant, Roundtree pulled out a .45 caliber pistol and shot his common-law wife multiple times.

Authorities subsequently apprehended Roundtree on Fort Sam Houston and recovered the firearm believed to have been used by the defendant to commit the offense.  The victim, who according to the criminal complaint identified Roundtree as her assailant, remains in stable condition following surgery at San Antonio Military Medical Center.

Roundtree, who had his Initial Appearance in federal court this morning, remains in federal custody pending a detention hearing at 3:30pm on Thursday before United States Magistrate Judge John Promomo.  Upon conviction, Roundtree faces up to 20 years in federal prison and a maximum $250,000 fine.

This case is being investigated by the Federal Bureau of Investigation (FBI) together with the U.S. Army Criminal Investigation Division and the San Antonio Police Department.  Assistant United States Attorney Bettina Richardson is prosecuting this case on behalf of the Government. 

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

In Del Rio this afternoon, former Maverick County Precinct Two Commissioner Rodolfo Bainet Heredia, age 54, of Eagle Pass, Texas, pleaded guilty to federal charges in connection with an alleged bribery, kickback and bid-rigging scheme, announced United States Attorney Robert Pitman and FBI Special Agent in Charge Armando Fernandez.

Appearing before United States District Judge Alia Moses, Heredia pleaded guilty to one count of receiving a bribe by an agent of an organization receiving federal funds.  By pleading guilty, Heredia admitted that in 2010 and 2011, he manipulated the bidding process to guarantee that contractors he chose would be awarded Maverick County construction contracts. Furthermore, Heredia admitted that he instructed the private contractors to submit inflated bids to Maverick County in order to ensure the availability of sufficient funds to perform the construction work, make a profit, and also to pay him bribes.  According to court records, Heredia collected thousands of dollars in bribes while Maverick County suffered losses estimated between $200,000 and $400,000 as a result of Heredia’s scheme.

Heredia, who has remained in federal custody since his arrest last October, faces up to ten years in federal prison and a maximum $250,000 fine.  In addition, Heredia has agreed to pay any and all restitution to be determined by the Court resulting from his illegal conduct as Maverick County Commissioner in 2010 and 2011 as well as any and all federal taxes owed to the United States for calendar years 2010, 2011, and 2012.  Sentencing is scheduled for 9:00 am on November 25, 2013.

This ongoing investigation is being conducted by the Federal Bureau of Investigation and the Texas Department of Public Safety.  Individuals who have first-hand information about corruption, fraud, or bribery related to Maverick County are urged to contact the FBI at (210) 225-6741.

Assistant United States Attorney Michael Galdo is prosecuting this case on behalf of the Government. 

Former Cameron County District Attorney Armando Villalobos faces federal prison time after a jury in Brownsville convicted him of federal charges related to a bribery and extortion scheme in South Texas announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent in Charge Armando Fernandez, San Antonio Division.

Late Friday evening, jurors convicted Villalobos of one count of violating the Racketeer Influenced and Corrupt Organizations (RICO) Act, one count of conspiracy to violate the RICO Act and five counts of extortion.  Jurors acquitted Villalobos of two counts of extortion.

Evidence presented at trial revealed that from October 2, 2006, through May 3, 2012, Villalobos and others were involved in a scheme to illegally generate income for themselves and others through a pattern of bribery and extortion, favoritism, improper influence, personal self-enrichment, self-dealing, concealment and conflict of interest.  Jurors found that Villalobos solicited and accepted over $100,000 in bribes and kickbacks in the form of cash and campaign contributions from South Texas attorney and co-defendant Eduardo “Eddie” Lucio and others in return for favorable acts of prosecutorial discretion, including minimizing charging decisions, pretrial diversion agreements, agreements on probationary matters and case dismissals.  Furthermore, Villalobos solicited and arranged for private counsel, including Lucio, to handle civil and forfeiture matters associated with criminal matters pending in the Office of the District and County Attorney of Cameron County. 

Villalobos, who remains on bond, faces up to 20 years in federal prison per count at sentencing scheduled for 8:30am on August 26, 2013, before U.S. District Judge Andrew Hanen in Brownsville.

Eduardo Lucio remains under indictment charged with one count of violating the Racketeer Influenced and Corrupt Organizations (RICO) Act, one count of conspiracy to violate the RICO Act and three counts of extortion.  He is currently on bond awaiting a trial date.

This investigation was conducted by the Federal Bureau of Investigation, Drug Enforcement Administration, Internal Revenue Service-Criminal Investigation and the Brownsville Police Department.  Southern District of Texas Assistant United States Attorney Michael Wynne and Western District of Texas Assistant United States Attorney Greg Surovic are prosecuting this case on behalf of the Government.

In Pecos yesterday, 34-year-old drug trafficking organization ringleader Noe Torres Ortega was sentenced to 262 months in federal prison followed by five years of supervised release announced United States Attorney Robert Pitman and Drug Enforcement Administration Special Agent in Charge Joseph M. Arabit.

Ortega is the last of 24 indicted defendants who pleaded guilty and was sentenced for his/her role in a Fort
Stockton-based cocaine trafficking conspiracy that was responsible for the distribution of over 50 kilograms of cocaine since 2009. Sentences handed down in this case range from 262 months in federal prison to three years probation.

This investigation was conducted by agents with the Drug Enforcement Administration Alpine Resident Office Multi-Agency Task Force (MTF) comprised of agents from DEA, United States Border Patrol, Pecos County Sheriff's Office, Brewster County Sheriff's Office, Alpine Police Department, and the Texas Department of Public Safety - Criminal Investigation Division as well as members of Homeland Security Investigations (HSI) in Presidio and Alpine and the Fort Stockton Police Department. This case was prosecuted by Assistant United States Attorney Monty Kimball.

Federal, state and local authorities have arrested eight individuals in connection with a cocaine distribution operation based in Killeen, Texas, announced United States Attorney Robert Pitman, Federal Bureau of Investigation  San Antonio Division Special Agent in Charge Armando Fernandez and Killeen Police Chief Dennis M. Baldwin.

A two-count federal grand jury indictment, returned on Tuesday and unsealed today, charges 31–year-old Cornelius Tywarren Wilson, 29-year-old Christopher Andrew Wilson, 38-year-old Jamel Azar Singleton and 30–year-old Jason Eugene Jackson with one count of conspiracy to possess with intent to distribute cocaine and one count of conspiracy to possess with intent to distribute “crack” cocaine.  Bryant Keith Presley, age 28, and Katrie Deshone Simpson, age 30, are also charged in the crack cocaine conspiracy count while 38–year-old Michael Anthony Mango is also charged in the cocaine conspiracy count.  The indictment alleges that the defendants have been involved in the cocaine distribution operation since October 2012.

Authorities arrested the indicted defendants yesterday without incident.  An eighth individual who was arrested yesterday, 26-year-old Walter Chambers, is charged by criminal complaint with conspiracy to possess with intent to distribute cocaine.  According to the affidavit, Chamber’s arrest occurred subsequent to the execution of a search warrant in an apartment in Killeen.  During the search, authorities recovered cocaine, crack cocaine and a handgun.

Each charge calls for between five and 40 years in federal prison and a maximum $2 million fine upon conviction.  The defendants remain in federal custody pending a detention hearing scheduled for 2:00pm on Tuesday before United States Magistrate Judge Jeffrey C. Manske.

This case resulted from an investigation by the Federal Bureau of Investigation (FBI) together with the Drug Enforcement Administration and the Killeen Police Department.  Assistant United States Attorney Sean Condron 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 Midland today, sentences were handed down to three individuals, including former Odessa, TX, residents Miguel and Michelle Compean and Odessa resident Brian Connell, for their roles in a firearms straw purchasing and trafficking investigation announced United States Attorney Robert Pitman and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Dallas Field Office Special Agent in Charge Robert Champion.

United States District Judge Robert A. Junell sentenced 28-year-old Brian Connell to 60 months in federal prison followed by three years of supervised release.  On February 25, 2013, Connell pleaded guilty to one count of conspiracy to smuggle goods from the United States and one count of giving a false statement to a federal official.

Judge Junell also sentenced Greenville, TX, residents 33–year-old Miguel Angel Compean, and his wife, 27-year-old Michelle Compean to 121 months in federal prison and 60 months probation, respectively.  On February 11, 2013, Miguel Compean pleaded guilty to one count of conspiracy to smuggle goods from the United States, one count of making a false statement in the acquisition of a firearm and one count of aggravated identity theft.  On February 20, 2013, Michelle Compean pleaded guilty to one count of making a false statement in the acquisition of a firearm.

By pleading guilty, the defendants admitted to participating in a scheme which involved surreptitiously purchasing approximately 100 firearms, including AK-47 style rifles and pistols, from various firearms dealers in Odessa, Fort Worth, Dallas, Brenham and Mesquite, TX, in order to smuggle them from the United States into Mexico during a 13-month period beginning in December 2011.  Miguel Compean admittedly purchased firearms for himself by using a relative’s name, date of birth and social security number.  Compean also admitted to recruiting his wife, Michelle, and Brian Connell to purchase firearms on his behalf and paying Connell $300 for each firearm that Connell straw purchased and gave to Compean.  Michelle Compean and Brian Connell both admitted to making false statements on ATF Form 4473 at the time of a firearm purchase claiming to be the actual buyer.

This case was investigated by ATF agents.  Assistant United States Attorney Will Tatum prosecuted this case on behalf of the Government.

In Midland, 41–year-old Bartolo Sanchez, former mayor of Toyah, Texas, faces three years in federal prison as well as restitution after pleading guilty this morning to stealing approximately $100,000 from the city based on fraudulent mileage reimbursement claims and personal expenditures announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent in Charge Mark Morgan.

Appearing before United States District Judge Robert A. Junell this morning, Sanchez pleaded guilty to one count each of wire fraud and aggravated identity theft.  By pleading guilty, Sanchez admitted that on May 14, 2009, and unbeknownst to the Toyah City Council, Sanchez signed a $228,132.54 settlement agreement with Chesapeake Operating, Inc. for repairs of surface damage on Toyah streets caused by Chesapeake vehicles.  Sanchez deposited that money into a new Toyah bank account that he created. 

Furthermore, having signatory authority on all city bank accounts, Sanchez admittedly wrote checks to himself from various city bank accounts, including the one he created from the Chesapeake settlement, based predominantly upon fraudulent mileage reimbursement claims but also for various expenses, most of which were personal in nature and had little or nothing to do with official City business. So as to not raise the suspicions of City Council members as to his scheme, Sanchez forged a required second signature on all of the checks he issued to himself.  

From May 2006 until December 2012, Sanchez served as the elected mayor of Toyah, a city located approximately 22 miles west of Pecos, Texas, comprising approximately 1.6 square miles and having a population of about 100 residents.

Sentencing for Sanchez has yet to be scheduled.  He remains on bond pending sentencing.

This case was investigated by the Federal Bureau of Investigation.  Assistant United States Attorney Austin Berry is prosecuting this case on behalf of the Government. 

This morning, former City of Eagle Pass Department of Public Works employee Edgar Aguilar was sentenced to 42 months in federal prison and ordered to pay $68,373.87 in restitution for his role in a credit card fraud scheme involving the City of Eagle Pass announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent in Charge Armando Fernandez.

On November 29, 2012, Aguilar pleaded guilty to one count of conspiracy to commit credit card fraud.  By pleading guilty, Aguilar admitted that during 2011, he obtained five City of Eagle Pass-owned “Fuelman” credit cards designated for fuel purchases for Public Works department vehicles and distributed them to his co-defendants.  The defendants then used those cards to purchase fuel for their own vehicles and to purchase fuel for others at the City’s expense.  In some instances, defendants charged individuals a reduced rate for fuel purchased using the City’s credit card, and then pocketed the cash.

Co-defendants Rene Castillo, Armando Ojeda Nuncio, and Ricardo Hernandez-Espinoza have all pleaded guilty to use of unauthorized access device.  Elizabeth Vivian has pleaded guilty to the conspiracy charge.  All four are awaiting sentencing.

This joint investigation was conducted by agents with the Federal Bureau of Investigation together with investigators from the Eagle Pass Police Department.  Assistant United States Attorney Tad Duree is prosecuting this case on behalf of the Government.

In San Antonio this morning, 38-year-old Yadira Mauricio Ybarra was sentenced to 87 months in federal prison for her role in a conspiracy to purchase machine guns and attempt to smuggle them into Mexico as well as bank fraud announced United States Attorney Robert Pitman, Bureau of Alcohol, Tobacco, Firearms and Explosives - Houston Division Special Agent in Charge Melvin D. King, Jr., and Homeland Security Investigations Special Agent in Charge Vincent Iglio.

United States District Judge Orlando Garcia also ordered that Ybarra pay $133,846.09 restitution for the bank fraud and be placed under supervised release for a period of three years after completing her prison term.

On July 12, 2011, Ybarra pleaded guilty to one count of possession of a machine gun.  According to court records, on April 19, 2011, federal authorities arrested Ybarra and 24–year-old Willy Mendoza after they paid $10,000 to an undercover agent and took possession of ten firearms--four fully-automatic machine guns and six semi-automatic assault rifles.  Court records also reflect that both Ybarra and Mendoza knew the firearms were going to be taken to Mexico.  On October 6, 2011, Mendoza was sentenced to 70 months in federal prison followed by two years of supervised release after pleading guilty to possession of a machine gun.

On February 7, 2012, Ybarra pleaded guilty to one count of conspiracy bank fraud.  By pleading guilty, Ybarra admitted that from April 28, 2009 until July 6, 2009, she conspired with others to steal approximately $130,000 by forging signatures of various account holders at the Wells Fargo Bank, Las Palmas branch, in San Antonio.

These cases were investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and ICE Homeland Security Investigations together with the San Antonio Police Department and the United States Secret Service.  Assistant United States Attorney Mark Roomberg prosecuted these cases on behalf of the Government.

In Waco this morning, federal authorities filed a criminal complaint (Case #: W13-127M) charging 31-year-old Bryce Ashley Reed with unlawfully possessing an unregistered destructive device announced United States Attorney Robert Pitman and ATF Special Agent in Charge Robert Champion.

According to the complaint, on May 7, 2013, deputies from the McLennan County Sheriff’s Office were dispatched to a residence in Abbott, Texas, where they discovered an assortment of bomb making components.  The complaint alleges that Reed had given the components to the resident on April 26, 2013.

ATF agents arrested Reed late yesterday afternoon in West.  Reed had his initial appearance in federal court this morning in Waco.  He remains in federal custody pending a detention hearing on May 15, 2013, in Waco before United States Magistrate Judge Jeffrey C. Manske. 

Upon conviction, Reed faces up to ten years in federal prison and a maximum $250,000 fine. 

At this time authorities will not speculate whether the possession of the unregistered destructive device has any connection to the West fertilizer plant explosion on April 17, 2013.  This ongoing investigation is being conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives together with the McLennan County Sheriff’s Office, McLennan County District Attorney’s Office, West Police Department, Texas State Fire Marshal’s Office and Texas Department of Insurance Fraud Unit.  Assistant United States Attorneys Mark Frazier and Greg Gloff are prosecuting this case on behalf of the Government.

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

Cash from the sale of drugs was laundered to purchase, train, breed and race American quarter horses in U.S.

In Austin, four men face up to 20 years in federal prison after a jury convicted them of their roles in a complex conspiracy to launder millions of dollars in illicit Los Zetas drug trafficking proceeds to purchase, train, breed, and race American quarter horses in the United States announced United States Attorney Robert Pitman, FBI Special Agent in Charge Armando Fernandez, Richard Weber, Chief, Internal Revenue Service Criminal Investigation and DEA Special Agent in Charge Javier Pena.

Jurors convicted 46–year-old Balch Springs, TX, resident Jose Trevino Morales, the brother of purported Los Zetas leaders, Miguel Trevino Morales (aka “40”) and Oscar Omar Trevino Morales (aka “42”), as well as 52-year-old Mexican businessman Francisco Colorado Cessa, 30-year-old horse trainer and purchasing agent Fernando Solis Garcia, 49-year-old horse trainer Eusevio Maldonado Huitron of one count of conspiracy to commit money laundering.   Jurors acquitted horse trainer and home builder Jesus Maldonado Huitron of Austin of the money laundering conspiracy charge.  No sentencing date has been scheduled for the four convicted this afternoon.

“This trial documented the violence, brutality and corruption generated by Mexican drug cartels, in this case the particularly ruthless Los Zetas.  The government was able to show how the corrupting influence of drug cartels has extended into the United States with cartel bosses using an otherwise legitimate domestic industry to launder proceeds from drug trafficking and other crimes,” stated United States Attorney Robert Pitman. 

U.S. Attorney Pitman added, “The Department of Justice, the Treasury Department and all our federal, state and local law enforcement partners are committed to drawing a line in the sand to prevent the Mexican cartels from importing their brand of violent crime, corruption and ruthlessness into the United States.  When we find evidence of cartel activity, whether in the form of drug trafficking, firearms smuggling or money laundering, we will work tirelessly to root out the perpetrators, deprive them of their profits, and seek the punishment appropriate to their crimes.”

Evidence presented during the 12-day trial revealed that Los Zetas are a powerful drug cartel based in Mexico and generate multi-million dollar revenues from drug trafficking.  Since 2008, Miguel and Oscar Trevino Morales would direct portions of the bulk cash generated from the sale of illegal narcotics to Jose Trevino and his wife, Zulema Trevino, for purchasing, training, breeding and racing American quarter horses in the United States.  Testimony also revealed a shell game by the defendants involving straw purchasers and transactions worth millions of dollars in New Mexico, Oklahoma, California and Texas to disguise the source drug money and make the proceeds from the sale of quarter horses or their race winnings appear legitimate.  Furthermore, the defendants implemented a scheme to structure cash deposits in amounts under $10,000 in order to circumvent mandatory bank reporting requirements.

“Today’s verdict affirms the hard work and dedication of The FBI and our law enforcement partners in combating drug cartels and their attempts to influence and control legitimate enterprises.   The FBI will continue to combat the efforts of organized criminal enterprises, including the Zetas, who would seek to endanger our communities,” stated FBI SAC Armando Fernandez.

Over 400 quarter horses seized by federal authorities in June as part of the above mentioned money laundering operation have been sold for approximately $9 million.  Most of the horses were sold at Heritage Place Auction Facility in Oklahoma City, OK, in the past year including A Dash of Sweet Heat, which sold for $1 million.  Approximately 100 broodmares were sold prior to auction for $35,000.  The federal government still retains possession of nine quarter horses, including Tempting Dash, winner of the Dash for Cash at Lone Star Park race track in Grand Prairie, Texas, on October 24, 2009; Mr. Piloto, $1 million All American Futurity winner at Ruidoso Downs on Labor Day, 2010; Dashin Follies; Separate Fire; and Y516, a yearling seized on Zule Farms in Lexington, OK.   Four of the nine quarter horses, none of which are named above, are scheduled for sale at auction at Heritage Place Auction Facility in Oklahoma on May 11, 2013.

U.S. Attorney Pitman noted that the proceeds from the sale of these quarter horses are held in escrow pending the resolution of a forfeiture action.  Furthermore, the Government seeks the forfeiture of farm and ranch equipment; horse racing equipment; real property in Lexington, OK, and in Bastrop County, TX; and, funds contained in three bank accounts allegedly used in the defendants’ scheme.  The Government also seeks a monetary judgment in the amount of $60 million representing the amount of money derived from the conspiracy.

“This verdict is an important victory for the American public,” said Richard Weber, Chief, IRS Criminal Investigation. “The Los Zetas used U.S. businesses to legitimize their illegal drug proceeds. Today, the Los Zetas cartel was brought to justice for their drug trafficking and money laundering operations. By following the money trail, IRS CI special agents were able to financially disrupt and dismantle this major drug trafficking organization. The fall of the Los Zetas cartel is an example of the great work our agents do on a daily basis.”

Authorities continue to seek the apprehension of seven co-defendants in this case including purported leaders of the Los Zetas, 35-year-old Miguel Trevino Morales (aka “40”) and his brother, 39-year-old Oscar Trevino Morales (aka “42”), as well as 32–year-old Victor Manuel Lopez,  Sergio Guerrero Rincon, 41-year-old Luis Gerardo Aguirre, Erick Jovan Lozano Diaz and Gerardo Garza Quintero.  Co-defendants Zulema Trevino, the wife of Jose Trevino Morales, Alexandra Garcia Trevino, the daughter of Jose Trevino Morales, 21-year-old Raul Ramirez, 23-year-old Adan Farias, and 29–year-old Felipe Alejandro Quintero, entered pleas of guilty to related charges prior to jury selection and are awaiting sentencing.

This investigation was conducted by agents with the Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation and the Drug Enforcement Administration with assistance from the United States Marshals Service, Immigration and Customs Enforcement Homeland Security Investigations (ICE-HSI) and U.S. Customs and Border Patrol, as well as local law enforcement agents in Irving, Texas, Lorena, Texas, Bruceville Eddy, Texas, Fort Worth, Texas and Laredo, Texas.  The investigation received assistance from the Texas Army National Guard, Cleveland County, Oklahoma Sheriff’s Office, and the Oklahoma and New Mexico Racing Commissions.  The U.S. Attorney’s Office for the Eastern District of Texas prosecuted several members of the Los Zetas drug cartel on drug trafficking charges related to this conspiracy and provided substantial assistance to this investigation.  The U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) provided assistance with the forfeiture action in this case.