Criminal Information — No. 7:22-cr-00001 (Dkt. 1, S.D. Tex.)

Summary

A ten-page criminal information filed by the United States Attorney in the U.S. District Court for the Southern District of Texas, McAllen Division, Case 7:22-cr-00001, captioned Criminal No. M-22-0001 and filed as Doc 1 in 2022, charging Armin Garza. The introduction identifies Garza as an elected La Joya Independent School District (LJISD) Trustee and describes Companies A through D, managed by or employing Persons A through D, in Hidalgo County, Texas, and Persons E through K as elected officials of Governmental Entities A, B and C, several of them also employed by LJISD. The counts fall in the elided middle of the text. The information closes with a forfeiture provision citing Title 21, United States Code, Section 853(p), incorporated by Title 28, United States Code, Section 2461(c), and is signed for Jennifer B. Lowery, United States Attorney.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

Text recognized from a scanned document; may contain errors.

United States District'c rt
Southern District of T xa
FILED oxas

UNITED STATES DISTRICT COURT a ft JAN 5 2022
SOUTHERN DISTRICT OF TEXAS! my

MCALLEN DIVISION | Nathan Ochsner, Clerk”
UNTED STATES OF AMERICA §
‘ CRIMINAL NO. M-22-000 1
ARMIN GARZA | :
CRIMINAL INFORMATION

THE UNITED STATES ATTORNEY CHARGES:
Introduction
~ At all times material to this Criminal Information:

1. Defendant ARMIN GARZA (“GARZA”) is a La Joya Independent School
District (LJISD) Trustee. As an elected trustee GARZA was sworn to faithfully execute the duties
of his office and to preserve, protect, and defend the Constitution and laws of the United States
and the State of Texas. Texas law mandates that the Board of Trustees contribute to the operation

of the district in a manner consistent with applicable laws and regulations.

2. Company A is an engineering company in Hidalgo County, Texas managed by
Person A.

3. Company B is a business based in Hidalgo County, Texas managed by Person B.

4. Company C is a business based in Hidalgo County, Texas managed by Person C.

5. Company D is a business employing Person D.

6. Persons E, F, and G are elected officials for Governmental Entity A. Person E, F,

and G were employed by LJISD.
7. Person H, I, and J are elected officials for Governmental Entity B. Person H is

employed by LJISD.
8. Person K was an elected official for Governmental Entity C.
9. Person L is a businessman in Hidalgo County, Texas and relative of Persons J and
Person K.

10. | Company E and Company F are business entities in Hidalgo County, Texas.
Company E and Company F are managed by Person M.

11. Governmental Entity D employs Persons B and M.

12. Governmental Entity A, B, C, D, and LJISD each received over $10,000 in federal
funding during each and every year relevant to this Criminal Information.

13. | WhatsApp, LLC is a communication platform that allows users to send text, photo,
video, or audio messages to one another through an application that can be run on a cellular phone
or computer. | The communication platform also permits users to conduct audio and video calls
with one another. WhatsApp, LLC does not maintain servers in Texas and all communications
referenced herein were transmitted in interstate commerce.

THE CONSPIRACY

14. Beginning by at least May 29, 2017 and continuing through at least until February
4, 2021, in the McAllen Division of the Southern District of Texas, defendant

ARMIN GARZA

did knowingly combine, conspire, confederate, and agree with other persons known and unknown,
to commit an offense against the United States, as follows:

(a) While an agent of a local government agency which received more than $10,000 from

a federal assistance program during a continuous one-year period, to knowingly and

corruptly solicit, accept, and agree to accept, things of value from a person, intending

to be influenced and rewarded in connection with any business, transaction, and series
of transactions of such agency involving anything of $5,000 or more, in violation of

Title 18, United States Code, Section 666(a)(i).

(b) To knowingly and intentionally devise and intend to devise a scheme and artifice to

(c)

15.

following:

defraud including the deprivation of the intangible right of honest services of other
persons and in furtherance of the scheme and artifice to defraud, used and caused to be
transmitted by means of wire communications in interstate or foreign commerce, any
writings, sings, signals, pictures, or sounds for the purpose of executing such scheme
or artifice in violation of Title 18, United States Code, Sections 1343 and 1346;

To knowingly obstruct, delay, and affect commerce by means of extortion, in that they
obtained property that was not due to them or their office and to which they nor their
office was entitled, all induced under color of official right, in violation of Title 18,
United States Code, Section 1951; and

To knowingly use and cause the use of a facility in interstate commerce, with the intent
to otherwise promote, manage, establish, carry on and to facilitate the promotion,
management, establishment and carrying on of an unlawful activity, that being a
bribery of a public official in violation of the laws of the State of Texas, Penal Code §
36.02(a)(1) and (3), and thereafter performed and attempted to perform acts in
furtherance of the unlawful activity in violation of Title 18, United States Code, Section
1952.

MANNER AND MEANS

The manner and means of the conspiracy included, but were not limited to, the
. It was part of the conspiracy that GARZA met and discussed an energy savings
contract to be proposed to LJISD by Company D with Person D prior to May 29,
2017.

. It was a part of the conspiracy that GARZA would conspire with others to launder
and award compensation or other benefits to GARZA and other public officials in
Hidalgo County, Texas in exchange for their respective official votes, motions, and
support in favor of energy savings contracts proposed by Company D.

. It was further part of the conspiracy that Person D would facilitate the selection of
subcontractors at the direction of GARZA or other co-conspirators to perform
portions of the scope of work awarded or to be awarded in the energy savings
contract. Several subcontractors selected, such as Company B and Company C,
agreed to route compensation to GARZA and other co-conspirators as a condition
of their employment. The inflated prices on governmental contracts awarded to
Company D permitted the awarding of excessive subcontracts and permitted
subcontractors to make kickback and bribe payments to GARZA and other co-
conspirators.

. It was further part of the conspiracy that Company A was hired in connection with
energy savings contracts awarded to Company D. Person A was instructed by co-
conspirators to issue kickback and bribe payments in exchange for the hiring of
Company A.

. It was further part of the conspiracy that GARZA exerted influence over the
employment of other co-conspirators, including Persons E-H, who were elected

officials at other governmental entities. The influence was exerted to promote the
awarding of contracts to Company D at said governmental entities. As part of the
exercise of his influence, GARZA supported promotions or awarding of stipends
to Persons E-H in exchange for their official votes or support of Company D’s
energy savings projects at other governmental entities:

F . It was a further part of the conspiracy, that GARZA did agree tacitly and implicitly,
to deprive the taxpayers and residents of the LJISD and other taxpayers in Hidalgo
County of the intangible right of honest services related to the contracting processes
for energy savings contracts, in breach of: the oath of office taken by GARZA; and
Texas criminal law relating to gifts to public servants, bribery, and procedures for
governmental contracting;

G. It was a further part of the conspiracy that GARZA and other co-conspirators did
use and cause the use of the facilities in interstate commerce, including cellular
phones and computers, to communicate and promote the bribery scheme and as part
of the scheme to provide benefits to GARZA.

H. It was a further part of the conspiracy that prior to and following the receipt of
bribes and kickback payments facilitated by Person D, that GARZA did make
official motions and votes in meetings of the LJISD Board of Trustees, in an effort
to cause the awarding of energy savings contracts to Company D by LJISD and
other governmental entities in Hidalgo County, Texas.

OVERT ACTS.

16. In furtherance of the conspiracy and in order to accomplish its objectives, the
following overt acts, were committed in the McAllen Division of the. Southern District of Texas

and elsewhere:
17. On or about May 29, 2017, GARZA made a motion as an LJISD board trustee in
support of granting an energy savings contract to Company D, which was ultimately granted to
Company D.

18. During 2017 and during the relevant period, Person E, F, and G each received
promotions and/or stipends as employees at LJISD. GARZA supported said promotions and
stipend in attempt to secure their support of future projects GARZA supported, including contracts
to be awarded to Company D.

19. On or about May 4, 2018, Company A issued an invoice seeking payment in the
amount of $223,237.68 in relation to a contract awarded to Company D. Company A subsequently
issued a wire transfer to Company B’s bank account in the amount of $163,707.63 on May 16,
2018. Company B subsequently issued a check to Company E on May 16, 2018 in the amount of
$63,250.00. Company E subsequently issued a check to GARZA in the amount of $50,000.00 on
May 17, 2018. GARZA did not perform any work for Companies A, B, or E, but the transactions
were layered to conceal and disguise the bribe and kickback payments to GARZA.

20. On or about July 11, 2018, Company C received payment in the amount of
$168,141.57 for work allegedly performed on behalf of a subcontractor hired as part of Company
D’s scope of work at LJISD. After receiving payment, Company C issued a check to Company F
in the amount of $74,070.00 on July 16, 2018. Company E subsequently issued a check in the
amount of $18,000.00 to GARZA on July 19, 2018. Company E then issued a second check in
the amount of $24,200.00 to GARZA’s relative on July 20, 2018 at GARZA’s direction. GARZA
did not perform any work for Companies C, E, or F, but the transactions were layered to conceal

the bribe and kickback payments to Garza.
21. | Fromonor about September 28, 2017 through August 16, 2018, Company E issued
five additional checks to GARZA totaling $142,300 as bribes and kickback payments for
GARZA’s influence over Persons E-J that were elected officials at governmental entities that had
awarded contracts to Company D.

22. On or about March 19, 2018, Company D was awarded a contract at Governmental
Entity A. Persons E, F, and G voted in support of the contract and hired Company A to serve as
the Governmental Entity A’s representative for the contract.

23. By at least September 20, 2019, GARZA and other co-conspirators, including
Person B, began communications in a WhatsApp conversation thread dubbed “Cartel City???” that
discussed various topics, including their schemes, the need to be aware of law enforcement, and
Company D’s current and prospective projects at other governmental entities in Hidalgo County.

24, By at least September 30, 2019, Person B, Person G, and other co-conspirators
began communications in a WhatsApp conversation thread dubbed “New City Admin” that
discussed various topics including projects with Company D, extorting companies for government
approvals, referring to themselves as a “cartel,” and setting up meetings with GARZA and Person
G to place LJISD employees “on check” ostensibly to secure votes and the election of certain
candidates in 2020. The election of the proposed candidates were to be favorable candidates for
Company D’s prospects of receiving and continuing to receive energy savings contracts at various
governmental entities.

25. By at least April 14, 2020, Person B, Person D, and other co-conspirators began
communications in a WhatsApp text messaging thread dubbed “Chapo Enterprises” that discussed
projects being undertaken by Company D including the inflating of prices and the timing and

routing of payments from Company D to various subcontractors. The communications also
discuss Person H’s stance towards Company D, a possible official vote on a proposed contract
with Company D at a governmental entity in Hidalgo County, and efforts to award an individual a
subcontract in order to gain Person H’s official vote. The communications also discussed the
awarding of the contract to Company D by Governmental Entity B.

26. On or about June 22, 2020, Company D was awarded a Guaranteed Energy Savings
Performance Agreement by Governmental Entity B after Persons H, I, and J voted in favor of the
agreement over the objection of Governmental Entity B’s City Manager.

27. By at least October 6, 2020, Person B, Person H, and Person K began
communications in a WhatsApp text messaging thread dubbed “The 3 Wizards” that discussed
various topics including a local election, a prospective contract for Company D, the subsequent
- awarding of a contract for Company D, the employment of Person H at LJISD, a possible judicial
appointment for Person K in exchange for official political support, and Person B’s conversations
with GARZA “cause [Person B] needs [GARZA’s] vote in the ISD for work.” Person K had
previously cast an official vote in an attempt to award Company D an energy savings contract with
Governmental Entity C. |

28. During the relevant period, GARZA attempted to secure a promotion for Person H
at LJISD. GARZA, Person'B, Person H, and other co-conspirators communicated with one
another via WhatsApp messages regarding said attempts during the relevant period. The attempts
to secure said promotions were to award Person H for Person H’s vote in favor of a contract to be
awarded to Company D by Governmental Entity B.

29. During the relevant period, Person J executed a contract with Governmental Entity

D for “Consultant Professional Services as a COVID-19 Specialist” purportedly effective on
October 1, 2020 in the amount of $3,000.00 per month from October 1, 2020 until September 30,
2023.

30. During the relevant period and during January of 2021, Person B would also
communicate with co-conspirators by telephone in the presence of GARZA, including providing
instructions to co-conspirators regarding motions and votes to be made by Person H and Person I
relating to contracts being proposed by Company D to Governmental Entity B.

31. During the relevant period, GARZA and Person B also met with Person L and
discussed Person H, I, and J’s support towards voting to award Company D a contract from
Governmental Entity B and an exchange of a business contract for Person L and/or his business
entity if said contract was officially awarded to Company D through said votes. —

32. On or about January 18, 2021, Persons H, I, and J cast official votes on behalf of
Governmental Entity B to finalize a contract with Company D.

33. During the relevant period, Person B and GARZA also communicated with one
another by cellular phone and through WhatsApp messages regarding Company D’s work progress
and Company D’s payments or payment delays to subcontractors.

34. Allin violation of Title 18, United States Code Section 371.

NOTICE OF FORFEITURE

Pursuant to Title 28, United States Code, Section 2461(c) and Title 18, United States Code
Section 981(a)(1)(C), the United States gives notice to defendant,
ARMIN GARZA
that in the event of conviction, the United States intends to seek forfeiture of all property, real or
personal, constituting, or derived from, any proceeds the person obtained directly or indirectly, as

a result of such violation.
The property subject to forfeiture for charge in the Criminal Information includes, but is
not limited to, the following property: at least $234,500.00 in United States currency.

Money Judgment

Defendant is notified that upon conviction, a monetary judgment may be imposed equal to the total
value of the property subject to forfeiture.

Substitute Assets

Defendant is notified that in the event that property subject to forfeiture, as a result of any act or
omission of defendant,

(A) cannot be located upon the exercise of due diligence;

(B) has been transferred or sold to, or deposited with, a third party;

(C) has been placed beyond the jurisdiction of the court;

(D) has been substantially diminished in value; or

(E) has been commingled with other property that cannot be divided without difficulty,
it is the intent of the United States to seek forfeiture of any other property of the defendant up to
the total value of such property pursuant to Title 21, United States Code, Section 853(p),
incorporated by reference in Title 28, United States Code, Section 2461(c).

JENNIFER B. LOWERY
UNITED STATES ATTORNE

ASSISTANT UN, TJATES ATTORNEY

10


File and source

File

1.pdf

Size

727,831 bytes

SHA-256

00a2173bd2a4ad3036d7088277a59f72ff4a69c40737cfa64ce0ddf5ef343ace

Our copy

1.pdf

Original

No public link identified.