The CID may not always get its man (or woman), but we do get quite a few. Here are some recent examples:
Mohammad Sado Bassam Lulu, 30, of El Paso, pleaded guilty in an El Paso district court to tobacco tax evasion and falsifying tax returns. He was sentenced to six months in jail, three years’ probation and 250 hours of community service and ordered to pay more than $60,000 in restitution.
Both offenses – possession of tobacco products on which more than $50 in taxes are due and failure to keep books and records – are third-degree felonies punishable by two to 10 years in prison and up to a $10,000 fine.
Lulu and a co-defendant purchased large amounts of tobacco products from an unlicensed supplier in Illinois, dating back to 2014, thereby avoiding thousands of dollars in Texas tobacco taxes. They also did not maintain accurate purchase records and filed false and/or incomplete returns or reports with the Comptroller’s office in 2017.
The case against his brother, Mohammed Darwish Bassam Lulu, 31, also of El Paso, was dismissed in the plea agreement.
CID collaborated on the investigation with the Illinois Department of Revenue and the Texas Department of Public Safety’s Criminal Investigations Division.
Diem Huyen Thi Tran (aka Huyen Thi Diam Tin), 45, of Waco pleaded guilty in a Hill County district court in March to illicit cigarette trafficking and was sentenced to two years in prison.
During a shoplifting arrest in late 2016 , Hillsboro police discovered 90 packs of unstamped Vietnamese cigarettes in her car. In Texas, cigarette packs must bear stamps indicating payment of state taxes.
Transporting unstamped cigarettes is a third-degree felony punishable by two to 10 years in prison and up to a $10,000 fine. Tran also was assessed court costs, which are being withheld from her inmate account, according to court documents.
A similar case against her husband, Van Thoung Tran, is pending prosecution in McLennan County. CID and the Department of Public Safety investigated the cases jointly.
Ms. Tran also is serving a concurrent 11-month sentence for pleading guilty to laundering more than $2,500 in illicit funds in March 2017, a felony punishable by confinement in a state jail for six months up to two years. The case was prosecuted by the McLennan County District Attorney’s Office.
A special provision of the Texas Penal Code allowed the judge to consider for sentencing purposes four other offenses to which Ms. Tran admitted without being convicted: possessing 283 packs of unstamped Vietnamese cigarettes at her Waco residence; tampering with a government record; fraudulently using/possessing identifying information; and stealing property valued at less than $2,500, her third shoplifting charge (two prior convictions).
James Christopher Phillips, 39, of Munday pleaded guilty in a Haskell County district court in May 2017 to motor fuel tax evasion and was sentenced to 10 years in prison.
He could have received up to 20 years for the second-degree felony and been fined up to $10,000. He also was assessed court costs.
Phillips was unlawfully acquiring red-dyed diesel fuel in Haskell County and concealing it in the “saddle tanks” of his semi-tractor truck. Non-taxable diesel fuel is dyed red and authorized exclusively for off-road and/or agricultural use by permit-holders.
In a related case involving three other Munday men, Phillips also pleaded guilty to engaging in organized criminal activity and received a 19-year prison sentence. He could have been given up 99 years or life for the first-degree felony and fined up to $10,000. The two sentences will run concurrently.
The organized crime conviction was based on a second-degree felony theft charge.
In September 2016, Kendall County lawmen arrested Phillips on an outstanding warrant while driving his truck on a public roadway west of San Antonio. He was hauling a tractor worth more than $150,000. It had been stolen from a farm in Haskell County and likely was bound for the black market in Mexico.
A subsequent investigation led by special rangers of the Texas and Southwestern Cattle Raisers Association (TSCRA) identified Phillips as the primary suspect in an ag theft ring. He and three accomplices were sentenced to a combined total of 61 years in prison. Investigators recovered and returned more than $273,000 worth of equipment, including a semi-tractor truck and three semi-trailers.
CID was one of several law enforcement organizations that assisted the TSCRA rangers with the investigation. The case was prosecuted in Haskell County.
Daniel Danger, 51, of Naples, Fla. has been sentenced to 10 years in prison and fined a total of $10,000 for using one of eight re-encoded credit and debit cards to obtain almost 42 gallons of diesel fuel worth $100 from a Caldwell convenience store in mid-April.
In an Oct. 11 bench trial, District Judge Carson Campbell convicted Danger on all five counts in his indictments: transporting motor fuel without shipping documents and evading motor fuel tax, each second-degree felonies; tampering with physical evidence, a third-degree felony; and two counts of credit/debit card abuse, a state jail felony.
Danger could have been fined up to $30,000 and imprisoned for up to 34 years; instead, he will serve his prison and jail terms concurrently. He was credited with 181 days of jail time served.
Danger and a co-defendant used a pickup truck containing a 300-gallon auxiliary tank in its bed concealed by wooden panels and a tire. Evidence showed that they attempted to destroy the “cloned” cards during their apprehension.
The Caldwell Police Department assisted CID with investigating the case, which was prosecuted by the Burleson County District Attorney’s Office.
The case against the co-defendant, Santos Del Pozo Rodriguez, 54, of Houston is pending prosecution in Burleson County.
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.
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.
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.