The CID may not always get its man (or woman), but we do get quite a few. Here are some recent examples:
Charles Martin Smith, 29, of Haskell, pleaded guilty to the second-degree felony offense of Evade or Attempt to Evade Tax on Motor Fuel.
He was sentenced on August 11, 2016, in the 39th District Court of Haskell County, Texas, to 10 years in the institutional division of the Texas Department of Criminal Justice as part of a plea agreement. The offense is punishable by imprisonment of 2 to 20 years in prison and/or a fine of up to $10,000.
Smith was involved in stealing dyed diesel fuel which is also known as "red diesel." Dyed diesel fuel is untaxed diesel fuel and is designated for use in a nontaxable manner in off-road equipment only. Smith admitted to using unlawfully acquired dyed diesel fuel in a motor vehicle on the public highways.
Omar Hernandez Ruiz (above left), 38, of Midland, was sentenced on April 12, 2016, to 27 months in federal prison and 3 years supervised release for Conspiracy to Commit Wire Fraud, 18 U.S.C. 1343/18 U.S.C. 1349, and Alma Evangelina Valenzuela (above right), 41, of Midland, was sentenced on March 21, 2016, to 5 years federal probation for her role in the same criminal offense. She was also assessed a $6,000 fine and 300 hours of community service. Both defendants previously pleaded guilty to their roles in this scheme. Court documents alleged that Ruiz and Valenzuela, owners of a trucking company in Midland, Texas, purchased diverted portions of fuel loads destined for another company in Odessa, Texas. The fuel distributor was unaware of the diversions and their employee would report that he delivered the full load to the client and cause the fuel distributor to electronically bill the client for the entire order of fuel. Court documents alleged that the scheme occurred between January 2011 and December 2012. The fuel delivery driver, Salvador Garza, was previously sentenced in the case and served 21 months in federal prison. Both defendants along with Salvador Garza were ordered to pay restitution in the amount of $800,000 jointly and severally to the victim in the case. The case was investigated by the FBI's Permian Basin Oilfield Theft Task Force and the Criminal Investigation Division of the Texas Comptroller. The case was prosecuted by the U.S. Attorney's Office for the Western District of Texas - Midland-Odessa Division as case number 7:15-CR-00171-RAJ.
An investigation conducted by the Texas Comptroller's Criminal Investigation Division (CID) recently led to the arrest and conviction of a Gorman, Texas, man on two counts of motor fuel tax fraud.
An Eastland jury sentenced Rickey Wayne Speer, 42, to 40 years in prison for unlawfully acquiring and selling large amounts of dyed diesel fuel.
"When people break Texas tax laws, they are not cheating the state – they are cheating their fellow Texans," Texas Comptroller Glenn Hegar said. "It is our responsibility to prosecute those offenders."
With the assistance of Comptroller's CID, Eastland County Criminal District Attorney Russ Thomason proved that Speer intentionally or knowingly transported motor fuel to a location without delivering documents relating to the shipment, and that Speer engaged in a motor fuel transaction without being licensed to do so as required by law.
Speer was tried as a habitual felony offender and faced a minimum of 25 years to life in prison as a result of previous felony convictions.
The Eastland and Comanche County Sheriffs' offices also assisted with this investigation.
The mission of the CID is to deter intentional criminal conduct against the state tax laws administered by the Texas Comptroller of Public Accounts. Go to the Comptroller's website for more information about CID's work.
Joe Octavio Granado, 42, of Midland, was sentenced on March 26, 2015, to 33 months in federal prison and 3 years supervised release for Conspiracy to Commit Wire Fraud, 18 U.S.C. 1343/18 U.S.C. 1349, and Juan Antonio Meza (above right), 59, of Odessa, was sentenced on March 26, 2015, to 5 years federal probation for his role. Both defendants previously pleaded guilty to their roles in this scheme. Court documents alleged that Granado, while an employee of SC Fuels, would regularly divert a portion of a fuel order destined for his employer's client to a third party business, Red X Truck Stop. Unaware of the diversion, SC Fuels continued to electronically bill the client for the entire order of fuel and accept wire transfer payment for it. Granado would then sell the diverted load to Red X, owned by Meza. Court documents alleged that over a two and a half year period, Granado received $774,612 from Meza for the fraudulently diverted fuel, and SC Fuel's original client paid $965,142 for the same fuel it never received. Both defendants were ordered to pay restitution in the amount of $965,142 jointly and severally to the victim in the case. The case was investigated by the FBI's Permian Basin Oilfield Theft Task Force and the Criminal Investigation Division of the Texas Comptroller. The case was prosecuted by the U.S. Attorney's Office for the Western District of Texas - Midland-Odessa Division as cause number(s) MO14CR-153-01 and MO14CR-153-02.
Jose Luis Suarez, 41, of Odessa, was sentenced on June 26, 2014 to 21 months in federal prison for Wire Fraud, 18 U.S.C. 1343.
Court documents alleged that Suarez, owner of Air One Mobile Welding Supply, filed or caused to be filed Texas sales tax returns that materially and fraudulently underreported the amount of the company's taxable sales, resulting in an underpayment of sales tax estimated to be $264,314. Suarez was alleged to have filed the returns with the Comptroller of Public Accounts using the internet, triggering the Wire Fraud statute.
Suarez entered guilty pleas to six counts of Wire Fraud in March. At his sentencing in June, he was ordered to serve 21 months of confinement, to be followed by 3 years of supervised release, on each count, to run concurrently. In addition, Suarez was ordered to forfeit $264,314.
The case was investigated by Homeland Security Investigations, IRS Criminal Investigation, and the Criminal Investigation Division of the Texas Comptroller. The case, filed as cause number MO13-CR-274, was prosecuted by the U.S. Attorney's Office for the Western District of Texas -- Midland-Odessa Division.
The last of seven contraband cigarette traffickers was sentenced November 13, 2013 federal court in Dallas. Saleem Durvesh, 61, Hisham Mahmoud Rashid, 50, Vashu Samtani, 49, Kan Arjel, 36, Keshab Thapaliya, 43, Inayat Ishaak, 49, and Mushtaq Ali, 53, pled guilty to Trafficking in Contraband Cigarettes, a violation of 18 U.S.C. 2342(a). All defendants except Ali pled guilty to an additional charge of Receipt of Counterfeit Securities, a violation of 18 U.S.C. 2315. One defendant, Durvesh, was sentenced to prison time.
Durvesh will serve 1 year and one day in prison, followed by 2 years of supervised release on each charge. Rashid, Samtani, Arjel, and Thapaliya were sentenced to 4 years of probation on each charge, to run concurrently. Ishaak received 2 years of probation on each, also to run concurrently. Ali will serve 2 years of probation.
The defendants were ordered to pay a combined restitution amount of $895,766 to the Texas Comptroller of Public Accounts, and to forfeit a combined $180,028 to the U.S. Government.
The cases, filed as case numbers CR-00359 (Samtani, Arjel, and Thapaliya), CR-00369 (Ishaak) CR-00371 (Durvesh), and CR-00375 (Rashid), were investigated jointly by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Euless Police Department, and the Criminal Investigation Division of the Texas Comptroller of Public Accounts. The cases were prosecuted by the U.S. Attorney's Office for the Northern District of Texas.
Tawana Scott, 31, of Houston, was sentenced July 8, 2013 in U.S. District Court to 39 months in federal prison after pleading guilty to Aggravated Identity Theft and Conspiracy to Commit Mail Fraud. Scott was accused in court documents of conspiring to defraud the Harris County Tax Office and the Texas Comptroller of Public Accounts through the U.S. Mail. In addition to her prison sentence, Scott was ordered to pay $161,804 in restitution to the Harris County Tax Office. Scott's case, filed as cause number 4:11CR00238-002, was jointly investigated by the U.S. Postal Inspection Service and the Texas Comptroller's Criminal Investigation Division. It was prosecuted by the U.S. Attorney's Office for the Southern District of Texas.
Assad Najib Boulos, 62, of Spring, and Talaat Boulos Boulos, 71, of Houston, were convicted and sentenced March 25, 2013 in U.S. District Court in Houston of Conspiracy to Defraud the United States, a violation of 18 U.S.C. 371. Each admitted in court documents to conspiring to impede and impair the Internal Revenue Service by causing purchases of motor fuel, on which they knew no federal fuel excise taxes had been paid, to occur; causing that fuel to be sold to consumers in certain convenience stores as tax-paid diesel for on-road use; and failing to report taxable diesel sales or remit excise tax. Each was sentenced to 5 years of federal probation and ordered to pay $650,000 in restitution jointly and severally. The cases, filed as cause numbers CR H-11-533-1 and -2, were prosecuted by the U.S. Attorney's Office for the Southern District of Texas.
Jose Maria Delbosque, 36 and Blanca Ronquillo-Corrales, 42, both of Odessa, were convicted and sentenced in U.S. District Court in October 2012 for motor fuel-related fraud. Delbosque and Ronquillo-Corrales were alleged by indictment of Accessing a Computer Device in Furtherance of Fraud, specifically, of knowingly and with the intent to defraud accessing a protected computer device without authorization in order to obtain fuel.
Delbosque pled guilty to one count of the offense and was sentenced October 5, 2012 to 24 months in federal prison, to be followed by three years of supervised release. As part of his sentence, he is ordered to pay $167,438 in restitution to West Texas Gas, jointly and severally with co-defendant Ronquillo-Corrales.
Ronquillo-Corrales was found guilty after a jury trial of three counts of Accessing a Computer Device in Furtherance of Fraud and was sentenced on October 25, 2012 to 11 months in federal prison with three years of supervised release to follow. Ronquillo-Corrales was ordered to pay $37,763 restitution jointly and severally with co-defendant Jose Delbosque to West Texas Gas as part of her sentence.
The case was prosecuted by the U.S. Attorney's Office for the Western District of Texas (Midland) as cause number MO12CR0149.
Calvin Russell Laird, 50, of Lawn, was sentenced to twenty years in prison on July 6th, 2012 for motor fuel tax fraud. It is the maximum sentence allowed by law for Evading Motor Fuel Tax, a second-degree felony that is the highest criminal charge in Chapter 162 of the Tax Code.
Laird was accused by indictment of intentionally and knowingly evading and attempting to evade motor fuel tax by delivering dyed diesel into the fuel tank of a motor vehicle for use upon a public highway. The case was prosecuted by the Taylor County District Attorney's Office and was a part of a multi-case plea bargain involving separate, unrelated offenses alleged to have been committed in Taylor County. The sentences run concurrently, and Laird's motor fuel sentence was the highest sentence imposed.
"The opportunities for dyed diesel crime have increased over the last several years, due to increased industrial activity in West Texas," stated Sgt. Dickie Hass, a peace officer with the Comptroller's Criminal Investigation Division. "As access increases, so do the opportunities for improper use.
"In order to deter improper use and protect the state's tax revenue, the Tax Code allows dyed diesel offenses to be prosecuted per act regardless of value, rather than by value, the way property crimes such as Theft are defined," explained Hass. "The result is that a felony conviction can be based, depending on the facts, on actions relating to one tank of fuel."
"This case is a warning to those considering diverting a tank or two of dyed diesel fuel into their vehicles for use on a public highway, which is prohibited by law," said CID Chief Martin D. Cano, Jr. "Prison time is a possibility in these cases. Any time, much less 20 years, is a lot of time to think about a couple of dollars saved. It's just not worth it."
On June 8, 2012, Mike Wooten, 50, of Dallas, returned to federal prison a second time after pleading true in U.S. District Court in Lubbock to the prosecution's Motion to Revoke Supervised Release. In 2010, Wooten pled guilty to misprision of a felony in a case involving state sales tax evasion and wire fraud with his business, West Texas Lighting, located in Lubbock. Wooten served 6 months in federal prison, paid the Comptroller $200,000 in restitution, and was placed on one year of supervised release after his initial discharge from prison. Wooten admitted to violating the terms of his supervised release and was sentenced to serve an additional 6 months in federal prison.
Tomas Quintero, 52, Fernando Baca, 54, and Luis Campos, 63, of El Paso, and Richard Baca, 55, of Albuquerque, NM, were sentenced in May 2012 in federal court on charges relating to theft of fuel from Biggs Air Field.
All men pled guilty to Conspiring to Commit Theft, a violation of 18 U.S.C. 371, 7(3), and 661. Three of the men: Quintero, Fernando Baca, and Campos were sentenced to prison sentences of 30, 15, and 4 months, respectively, each to be followed by 3 years of supervised release. Richard Baca was sentenced to 5 years of probation.
Additional prison terms were handed down for Quintero and Fernando Baca. Quintero, who pled guilty to Tax Evasion, a violation of 26 U.S.C. 7201, was sentenced to 30 months in prison to be followed by 3 years supervised release, to run concurrently with his Conspiracy sentence. Fernando Baca, who pled guilty to Fraud and False Statements, a violation of 26 U.S.C. 7206, was sentenced to 15 months in prison to be followed by 3 years supervised release, to run concurrently with his Conspiracy sentence.
All men were ordered to pay restitution, jointly and severally, to the Defense Energy Support Center in the amount of $291,817; the U.S. Department of Transportation in the amount of $26,511, and the IRS in the amount of $25, 504. Quintero was ordered to pay an additional $43,806 to the IRS individually.
The Texas Comptroller's Criminal Investigation Division assisted the U.S. Army Criminal Investigation Command and the Defense Criminal Investigative Service on the investigation. The case, filed as EP-11-CR2587, was prosecuted by the U.S. Attorney's Office for the Western District of Texas in El Paso.
When a consumer pays sales tax, he or she does so trusting the retailer will forward that money to the state. When an unscrupulous retailer obtains that tax money, then breaks the trust by intentionally failing to remit that money — perhaps keeping, investing, or spending it — the consumer and the entire state are victimized. SB 934 dramatically raises the stakes for anyone caught defrauding Texas taxpayers in this way.
Senate Bill 934 (2011), signed by the Governor, amends the Tax Code to treat tax cheats the same as property thieves. Beginning Sept. 1, 2011, anyone who collects and intentionally doesn't remit sales tax will face the same criminal penalties as property theft.
SB 934 also amends the Penal Code to allows investigators to:
Sales tax fraud harms all Texans. Now with SB 934, this scam can be punished in tough new ways in the criminal justice system just as strongly as theft and pursued as money laundering and organized crime when appropriate.
The owner of a Lubbock business has been sentenced to six months in federal prison and ordered to pay the state Comptroller $200,000 in restitution for a scheme involving state tax evasion and wire fraud.
Mike Wooten, 48, the owner of West Texas Lighting Management, pled guilty in Lubbock federal court to misprision of a felony, which is defined in the U.S. Code as having knowledge of the commission of a felony and failing to report the crime to authorities. His sentence, handed down on Oct. 15, includes a year of supervised release after completing his prison term.
Court documents allege that in 2006, Wooten began underreporting his company's taxable sales to the state Comptroller's office, knowing the amounts shown on his tax returns were materially false and fraudulent, and using wire communications to file the tax returns. Wooten admitted in his guilty plea that he did not disclose the actual amount of his company's sales to the Comptroller.
Filing falsified state tax returns and failing to remit taxes collected from a business's customers are state law violations. When a false tax return is filed electronically, the filer can be charged with the federal offense of wire fraud or misprision of a felony based on wire fraud, which is what happened in the Wooten case.
"This was a complex case involving multiple serious crimes and state and federal jurisdictions," said Texas Comptroller Susan Combs. "I am pleased that investigators in our Criminal Investigation Division were able to work with the FBI and the U.S. Attorney's office in Lubbock to see that justice was done."
Combs reports that the number of felony tax cases filed by her office increased dramatically in fiscal 2010, after the Criminal Investigation Division streamlined its caseload to focus on the most serious tax law violators. The Comptroller's office filed 129 felony charges in fiscal 2010, compared to 25 in fiscal 2009.
Hidalgo County convenience store owner Rogelio Ramirez this week received a punishment of 10 years deferred adjudication after pleading guilty to two counts of sales tax fraud. Ramirez admitted to intentionally failing to remit more than $100,000 of sales tax collected from customers, a second degree felony. Ramirez also admitted to intentionally making false entries in and failing to make entries in sales tax records, a third degree felony.
In December 2009, Ramirez, the owner of two Pepe's Drive In stores, was the first person arrested for tax fraud under a new law giving the Comptroller a new audit tool for detecting tax fraud.
"This case should send a strong message that we are serious about prosecuting those who commit tax fraud," Texas Comptroller Susan Combs said. "By going after the bad guys, we protect the good guys -- the honest business owners -- against unfair competitors."
Ramirez agreed to pay the state more than $116,000 in restitution as part of his plea bargain, paying $60,000 prior to sentencing. He will pay the balance of $56,290 as a condition of his deferred adjudication. Ramirez will also perform 200 hours of community service under the agreement.
The case was prosecuted by the Travis County District Attorney's Office.
House Bill 11 passed by the 2007 Legislature requires distributors of alcohol and tobacco products to report sales to retail outlets monthly, giving the Comptroller's auditors the ability to compare the distributors' reports against taxable sales reported by retailers.
"Since alcohol and tobacco distributor reporting began in January 2008, our auditors have used this new tool to identify nearly $164 million in sales tax due to the state," Combs said. "This tax might have gone unreported without the fraud detection capability offered by HB 11 and the deterrent effect of the new law on those who might be tempted to underreport sales tax."
A Houston area man has received a 12-year prison sentence and an order to pay $1 million in restitution to the state for his part in a scheme to blend and sell untaxed motor fuel to unsuspecting gas stations. Sidney Baldon II, 47, pled guilty in a Travis County court to three indictments for motor fuel tax crimes connected to the scheme that operated in 2002 and 2003. He was sentenced June 23.
Baldon owned a company that transported kerosene and other motor fuel products. The company purchased kerosene from a Louisiana refinery and, to avoid paying excise taxes, falsely claimed the fuel would be exported to Mexico. Instead, Baldon trucked the kerosene to Texas and blended it with other additives to produce more than 22 million gallons of diesel fuel. Baldon distributed the diesel to retail gas stations, where it was sold as taxable motor fuel. State taxes were collected from consumers, but were never remitted to the state, defrauding taxpayers of $4.5 million.
"When a business collects tax and keeps the money, it not only defrauds the state, but also steals from every customer who pays the tax in good faith that the money will be used to benefit Texas," Comptroller Susan Combs said.
A new audit tool used by Texas Comptroller Susan Combs has led to the indictment and arrest of a South Texas convenience store owner for tax fraud.
Rogelio Ramirez, owner of two Pepe's Drive In stores in McAllen, was arrested today after being indicted for four felony counts of failure to remit sales tax collected on alcohol and tobacco and two felony counts of falsifying records.
According to the indictment issued Nov. 30 by a Travis County Grand Jury, Ramirez is alleged to have collected and not remitted $100,000 or more in sales tax in 2008, and between $20,000 and $100,000 in the first eight months of 2009. He is charged with collecting but failing to pay the state $100,000 or more in calendar years 2006 and 2007 as well.
The indictment is the first in Texas based on an investigation using a fraud detection tool initiated by Combs and passed by the Legislature in 2007. The law requires distributors of alcohol and tobacco products to report sales to retail outlets monthly, giving the Comptroller's auditors the ability to compare the distributors' reports against taxable sales already reported by retailers. Distributor reporting under the law began in January 2008.
"This law passed with the overwhelming support of convenience store operators," Combs said. "It helps protect legitimate, law abiding convenience store owners against competitors who attempt to profit from tax fraud."
So far, the Comptroller has assessed nearly $90 million in sales tax that might have gone unreported without the fraud detection capability offered by the new law.
A Houston man has been sentenced to 25 years in the state penitentiary for check forgery, including forgery of state government checks.
On Oct. 14, 2009, Dwaine Allen Collier, 38, pled guilty in Harris County state district court to the third degree felony offense of Engaging in Organized Criminal Activity - Forgery. As part of the plea, Collier admitted to serving two previous sentences for forgery, increasing his minimum prison sentence due to his criminal history. He was sentenced in the current case, filed as cause number 1204040, on Dec. 9, 2009.
Collier admitted being involved with six others forging checks, including checks that appeared to be issued by the state Comptroller's office. The counterfeit checks were made out to Collier and the other co-defendants, and were cashed at Houston-area stores, including major grocery and discount chains, before the forgeries were detected. Collier has been ordered to pay $15,000 restitution to these stores.
Co-defendants Latasha Brown, 29; Wanda Brown, 48; Steve Brown, 21; and Kimbra Lockridge, 21, all of Houston, pled guilty and were placed on deferred adjudication probation in spring 2009. The cases against co-defendants Willie Roy Tolder and Josie Ekoh are still pending in Harris County.
An Abilene man has been sentenced to prison for two years for trying to avoid paying motor fuel tax. Tommy Eugene Aaron, 51, pled guilty to the second degree felony offense of evading motor fuel tax on March 3 in a Travis County court. Aaron was charged with stealing dyed diesel fuel valued between $1,500 and $20,000, storing it without a required permit, using it in vehicles driven on the highway and failing to pay motor fuel tax.
Dyed diesel is untaxed diesel fuel intended to be used in off-road vehicles such as farm tractors and construction equipment. It is colored so law enforcers can easily tell when untaxed fuel is illegally used in highway vehicles.
In fiscal 2009, the state collected about $3 billion in gasoline and diesel fuel taxes.
"Through the motor fuels tax, drivers pay to build and maintain Texas highways," Texas Comptroller Susan Combs said. "We will continue to pursue tax evaders to the full extent of the law to ensure that revenue for state operations gets collected."
The Criminal Investigation Division of the Comptroller's office, the Winkler County Sheriff's Office, the Loving County Sheriff's Office, the Jones County Sheriff's Office and the Commercial Vehicle Enforcement Service of the Texas Department of Public Safety participated in the investigation. The case was prosecuted by the Motor Fuel Tax Fraud Division of the Travis County District Attorney's Office.
In 2015, the Texas Legislature passed House Bill 855, which requires state agencies to publish a list of the three most commonly used Web browsers on their websites. The Texas Comptroller’s most commonly used Web browsers are Google Chrome, Microsoft Internet Explorer and Apple Safari.