Tuesday, December 03, 2013

Corruption: San Antonio -- Former Mexican state governor indicted on racketeering

U.S. Attorney’s Office 
Southern District of Texas

BROWNSVILLE, TX—A federal indictment charging Tomas Yarrington Ruvalcaba, the former governor of the state of Tamaulipas, Mexico, has been unsealed.

The unsealing was announced by United States Attorneys Kenneth Magidson and Robert L. Pitman, of the Southern and Western Districts of Texas, respectively, along with Janice Ayala, special agent in charge, Homeland Security Investigations (HSI); Javier Peña, special agent in charge, Drug Enforcement Administration (DEA); Bernard Butler, acting special agent in charge, Internal Revenue Service-Criminal Investigation (IRS-CI); and Armando Fernandez, special agent in charge, FBI.

Following an investigation that spanned several years, the sealed indictment was returned in May 2013 by a federal grand jury sitting in Brownsville. The indictment charges Yarrington, 56, and Fernando Alejandro Cano Martinez, 57, the owner of a Mexican construction firm, with conspiring to violate the provisions of the Racketeer Influenced and Corrupt Organization (RICO) statute. The two men are also charged with conspiracy to launder money, conspiracy to defraud, and conspiracy to make false statements to federally insured U.S. banks.

Yarrington is also separately charged with a conspiracy to violate the provisions of the Controlled Substances Act, two substantive bank fraud charges, and a conspiracy to structure currency transactions at a domestic financial institution, while Cano is separately charged with three counts of bank fraud.

Yarrington served as governor of Tamaulipas from 1999 to 2004. Tamaulipas lies along the southern border between the United States and Mexico directly across from Brownsville and Laredo.

According to the indictment, beginning in approximately 1998, Yarrington received large bribes from major drug traffickers operating in the Mexican state of Tamaulipas, including the Gulf Cartel. In return, Yarrington allegedly allowed them to operate their large scale, multi-ton enterprises freely, which included the smuggling of large quantities of drugs to the United States for distribution. From 2007 to 2009, Yarrington allegedly became involved in the smuggling of large amounts of cocaine through the Port of Veracruz into the United States.

Yarrington also allegedly collected bribes from commercial operations in Mexico, according to the indictment. Cano operated Materiales y Construcciones Villa de Aguayo, S.A. de C.V., a construction firm in Tamaulipas that received significant public works contracts during Yarrington’s term as governor. The indictment alleges Cano, in turn, paid bribes to Yarrington to include the acquisition of real estate in front names for him.

The indictment further alleges Yarrington also received control over stolen public funds in the latter part of 2004. Portions of those funds were allegedly used to buy a Sabreliner 60 airplane in January 2005. As part of that purchase, $300,000 was transferred to a bank account in the United States. Another portion of the allegedly stolen funds, $5 million Mexican pesos, was transferred to Cano in the spring of 2005, according to the indictment.

The indictment further alleges that starting in approximately 1998, Yarrington, and later to include Cano, became involved in the acquisition of valuable assets in the United States, using front names and business entities established starting in 2005 to disguise the true ownership of the assets. The assets allegedly included bank accounts, residences, airplanes, vehicles, and real estate in Bexar, Cameron, Hidalgo, and Hays Counties, many of which were acquired via allegedly fraudulent loans from banks in Texas. According to the indictment, bank accounts established in front names at Texas banks were used to receive and disburse money to carry the ongoing costs of the assets, such as loan costs and condo fees.

The indictment identifies numerous specific front entities involved in the scheme, each of which allegedly applied for multi-million-dollar fraudulent loans at Texas banks, which Cano allegedly personally guaranteed. The indictment details a total of more than $7 million in transfers into the U.S. accounts of the front entities.

Additional entities were created and used to apply for other loans to fund the purchase of still other assets, according to the indictment. Numerous currency transactions were allegedly conducted at First National Bank, headquartered in Edinburg, Texas, in a structured manner in amounts at or below $10,000 in order to evade the filing of Currency Transaction Reports by the bank.

Neither Yarrington nor Cano is in the custody of the United States and warrants remain outstanding for their arrests. Anyone with information about their whereabouts is asked to contact Homeland Security Investigations at 956-542-5811. Persons calling from Mexico should call 001-800-010-5237.

The RICO and money laundering charges each carry sentences of up to 20 years in prison, while conspiracy to commit bank fraud carries as possible punishment up to 30 years. The drug conspiracy charges carry a term of imprisonment of at least 10 years. The currency structuring charges carry a possible five-year term of imprisonment.

The indictment also includes a notice of forfeiture. Some of the assets identified in the indictment already have been seized by the United States in civil forfeiture actions over the course of the investigation, to include approximately 46 acres in Bexar County, a condo on South Padre Island, a 2005 Pilatus airplane, and residences in Hidalgo and Hays counties.

The investigation leading to the indictment has been conducted by the Organized Crime Drug Enforcement Task Force in Brownsville, San Antonio, Houston, Corpus Christi, and New York and has included agents and officers with HSI, DEA, IRS-CI, FBI, and the Texas Attorney General’s Office. The United States government also acknowledges with gratitude the significant assistance received from the government of Mexico in the course of this investigation, including through sharing evidence and expertise.

The case is being prosecuted by Assistant United States Attorneys Charles Lewis, Julie K. Hampton, and Jody Young.

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