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Glenn Hegar
Texas Comptroller of Public Accounts
Glenn Hegar
Texas Comptroller of Public Accounts
Glenn Hegar
Texas Comptroller of Public Accounts

Breaking the state's laws is a losing proposition. Read about those who found that out the hard way.

May 2020

May 31

Eligo Benavides, 39, of Alamo was indicted this past winter for using re-encoded charge cards to fraudulently obtain about 42 gallons of diesel fuel worth more than $107 at a chain convenience store in Katy.

For failing to pay the backup tax, Benavides is charged with motor fuel tax evasion, a second-degree felony punishable by imprisonment for two to 20 years and a fine of up to $10,000. He also is charged with unlawful use of a criminal instrument (i.e., his pickup truck), a third-degree felony punishable by two to 10 years in prison and up to a $10,000 fine.

On Jan. 16, the truck was found to contain the unlawfully acquired diesel. The vehicle had been modified to receive, transport and dispense large quantities of motor fuel, reports show, and the defendant allegedly did not have the required cargo manifest.

The case is pending prosecution in Fort Bend County.

May 29

Dorian Jimenez-Espinoza, 32, a Houston auto dealer, was indicted May 29 for allegedly withholding more than $33,000 in taxes from the state.

The defendant, who manages Jimenez Motor Cars, is charged with money laundering and misapplication of fiduciary property. Each offense is a third-degree felony punishable by two to 10 years in prison and up to a $10,000 fine. He also is charged with tampering with a government record, a felony punishable by confinement in a state jail for six months up to two years and a fine of up to $10,000.

Jimenez-Espinoza allegedly underreported sales prices for the first five months of 2019, failing to remit more than $33,000 in motor vehicle sales taxes collected on transactions. He claimed to have used the funds to pay employee commissions, according to reports.

An audit found that records also had been tampered with between 2016 and 2019 in order to conceal sales prices, evidently to avoid making substantial tax payments.

A customer complaint prompted the investigation that led to the case, which is pending prosecution in Harris County.

May 22

Joel Issac Sotelo, 34, of Odessa pleaded guilty May 22 to motor fuel tax evasion and received deferred adjudication (no final conviction).

A district judge in Midland County sentenced him to four years’ probation, 150 hours of community service and a $1,500 fine, plus court costs. The offense is a second-degree felony punishable by two to 20 years in prison and up to a $10,000 fine.

Sotelo admitted unlawfully appropriating 75 gallons of untaxed dyed diesel fuel last summer in Midland.

The fuel reportedly had been obtained from a rig site and dispensed into both “saddle” supply tanks of the defendant’s semi-truck combo. Sotelo, owner of Optimus Trucking Co., was operating the vehicle on a public highway when a state trooper stopped him for an alleged traffic violation on Aug. 15, 2019.

In Texas, non-taxable diesel fuel is dyed red to distinguish it from taxable diesel. Red-dyed diesel is authorized almost exclusively for off-road, agricultural use by permit-holders only.

May 21

Pedro Ruiz Crespo, 47; Cruz Plasencia, 46; and Jorge Felix Lopez, 34, all of Houston, were indicted for allegedly participating in a scheme to unlawfully obtain and sell diesel fuel without paying state taxes.

Crespo and Plasencia are charged with transporting motor fuel without cargo manifests or shipping documents, and Lopez is charged with accepting delivery of motor fuel without receiving a shipping document. Both offenses are second-degree felonies punishable by imprisonment for two to 20 years and a fine of up to $10,000.

On Jan. 8, local police reportedly observed Crespo and Plasencia driving pickup trucks into a trucking yard. They allegedly dispensed diesel from tanks hidden in the truck beds into two large “bladder” containers – one on a truck trailer, the other on the ground – belonging to Lopez, a semi-tractor truck driver who allegedly was buying the fuel from Crespo and Plasencia.

CID assisted the Houston Police Department in the investigation of the cases, which are pending prosecution in Harris County.

Yainel Maturell Fernandez, 30, of Houston was arrested for allegedly using a stolen charge card to unlawfully obtain more than 113 gallons of diesel fuel worth $270 from a chain convenience store in Madisonville this past spring.

Surveillance video reportedly showed the suspect making two transactions on separate dates and dispensing diesel into the main fuel tank and an auxiliary tank in the bed of a pickup truck.

Fernandez is charged with motor fuel tax evasion, a second-degree felony punishable by two to 20 years in prison and up to a $10,000 fine, and with credit/debit card abuse of the elderly, a third-degree felony punishable by two to 10 years in prison and up to a $10,000 fine.

The case is pending prosecution in Madison County.

May 20

Manuel Terrazas, Jr., 39, of Denver City pleaded guilty to motor fuel tax evasion and received deferred adjudication (no final conviction).

A Yoakum County district judge sentenced him to eight years’ probation and more than $10,000 in restitution, plus reimbursement fees and court costs. The offense is a second-degree felony punishable by two to 20 years in prison and up to a $10,000 fine.

Terrazas previously was granted pre-trial diversion, but the agreement was revoked when he failed to complete the terms.

The defendant admitted illegally appropriating almost 3,350 gallons of diesel fuel, valued at more than $11,400, from his previous employer. While driving a tanker truck for an energy services company, he delivered less than the ordered quantities of fuel to customers and sold the difference. The practice, known as “short loading,” circumvented payment of required backup taxes.

May 19

Nelson Conde-Rodriguez, 34, of Houston was indicted in April for allegedly using re-encoded credit cards to unlawfully obtain more than 50 gallons of diesel fuel worth more than $128 from a chain convenience store in Katy last January.

Conde-Rodriguez is charged with motor fuel tax evasion and transporting motor fuel without a cargo manifest or shipping documents. Both offenses are second-degree felonies punishable by two to 20 years in prison and up to a $10,000 fine.

Local authorities also have charged him with felony credit card abuse.

On Jan. 20, store personnel reportedly witnessed the driver of a pickup truck making suspicious diesel fuel purchases and contacted local police. They confiscated six credit cards during a subsequent traffic stop.

CID assisted the Katy Police Department in the investigation of the case, which is pending prosecution in Fort Bend County.

May 18

Angel Moya, 57, of Cypress was indicted for allegedly using re-encoded credit cards to fraudulently obtain more than 78 gallons of diesel fuel worth $200 from a Katy supermarket last January.

He is charged with motor fuel tax evasion, a second-degree felony punishable by two to 10 years in prison a fine of up to $10,000.

A store employee reportedly witnessed the illegal purchase, observing the defendant pumping diesel directly into an auxiliary tank concealed in the bed of a pickup truck allegedly driven by co-defendant Cue Isabel Hernandez, 33, of Houston. The employee contacted local police with a description of the pink-haired driver.

The pair drove away before officers arrived, located and stopped the vehicle. It had been outfitted with a 100-gallon “bladder” concealed beneath a tool box mounted in the bed of the truck, along with hoses and nozzles, which qualified the truck as a motor fuel transport. Investigators confiscated several “cloned” cards but found no state permits or licenses.

Hernandez is under indictment for unlawful use of a criminal instrument (i.e., the truck), a third-degree felony punishable by two to 10 years in prison and up to a $10,000 fine. In addition, local authorities have charged both suspects with fraudulent use/possession of between five and 10 items of identifying information, also a third-degree felony.

CID assisted the Katy Police Department in the investigation of the case, which is pending prosecution in Fort Bend County.

May 13

Pablo Luis Narvaez Alvarez, 67, of San Benito; Florencio Andrade Hernandez, 48, and Marco Antonio Nunez Martinez, 40, both of Brownsville; and Jose Cipriano Guerrero Sanchez, 45, a Mexican national, were indicted for allegedly participating in a scheme to buy and use untaxed gasoline diverted to a Brownsville trucking company site last summer and fall.

Hernandez and Martinez each are charged with motor fuel tax evasion for failing to pay the required backup taxes. Martinez and Alvarez are charged with transporting motor fuel without proper shipping documents. Alvarez also is charged with accepting motor fuel delivered without a shipping document, and Sanchez is charged with distributing motor fuel on which taxes were unpaid.

All the offenses are second-degree felonies punishable by two to 20 years in prison and up to a $10,000 fine.

In addition, Sanchez is charged with motor fuel transportation using a false manifest, a third-degree felony punishable by two to 10 years in prison and up to a $10,000 fine.

All of the defendants except Hernandez were indicted on multiple felony counts.

On five occasions in August, September and October of 2019, Sanchez allegedly off-loaded thousands of gallons of gas from trucks belonging to a Mexican cargo firm into drums at a freight yard owned by Martinez and Hernandez’ employer, instead of delivering them to the purchaser in Mexico. Known as “short loading,” the practice circumvents state law exempting exported gasoline from tax.

Martinez and Alvarez allegedly drove vehicles containing bulk loads of the untaxed gas on public roadways. Hernandez is accused of buying six drums containing approximately 90 gallons of gas from Alvarez for $25 apiece. Martinez allegedly bought one drum from Alvarez, who was acquiring the gas from Sanchez.

Sanchez was arrested in mid-December at a border crossing in Pharr. The other co-defendants were arrested in mid- and late-January at various locations in Cameron County.

CPA CID assisted the Department of Public Safety CID in the investigation of the cases, which are pending prosecution in Cameron County.

May 12

Luis Mario Vela Reyes, 33, of Cleveland was arrested for unlawfully acquiring more than 70 gallons of diesel fuel worth more than $200 from a Livingston convenience store earlier this year.

A state investigator reportedly witnessed the suspect making two allegedly fraudulent transactions on Jan. 23 using a re-encoded charge card. He twice pumped fuel directly into an auxiliary tank concealed in the bed of his pickup truck, according to reports.

A state trooper detained the suspect during an ensuing traffic stop, but the “cloned” card was not found.

Reyes was subsequently arrested at a Cleveland gas station. Records show he was under investigation for a similar offense in Montgomery County last fall.

Reyes is charged with motor fuel tax evasion and transporting motor fuel without shipping documents, both second-degree felonies punishable by two to 20 years in prison and up to a $10,000 fine; unlawful use of a criminal instrument (i.e., the truck), a third-degree felony punishable by two to 10 years in prison and up to a $10,000 fine; and possession of fewer than five items of identifying information, a felony punishable by confinement in a state jail for six months up to two years.

CID assisted the Department of Public Safety in the investigation of the case, which is pending prosecution in Polk County.

May 7

Rodolfo Banuelos-Holguin, 33, of Odessa was indicted late last year for allegedly using red dyed diesel fuel in his vehicle unlawfully.

The defendant is accused of motor fuel tax evasion, a second-degree felony punishable by two to 20 years in prison and up to a $10,000 fine.

In mid-August, a state trooper discovered that the semi-truck tractor the suspect was driving in Midland contained approximately 100 gallons of dyed diesel. He claimed to have bought it from someone who approached him. Banuelos-Holguin was arrested in March.

In Texas, non-taxable diesel fuel is dyed red and authorized almost exclusively for off-road and/or agricultural uses by permit-holders.

CID assisted the Department of Public Safety in the investigation of the case, which is pending prosecution in Midland County.


April 2020

April 30

Fnu Ahmed-Dhanani, 38, of Euless was indicted last fall for allegedly falsifying a renewal application for an amusement machine license.

In late November 2018, he reportedly submitted an application with two incorrect addresses for his places of business and recordkeeping; one was a convenience store, the other a barber shop under construction, both in a strip mall in southwest Fort Worth. The defendant also allegedly used a variation of his name, but not his full legal name, on the application. Amusement machine operators in Texas must either be licensed to operate machines statewide or certified to do so at specific locations.

Ahmed-Dhanani is charged with attempting to obtain a license by fraud, a second-degree felony punishable by imprisonment for two to 20 years and a fine of up to $10,000.

The case is pending prosecution in Tarrant County.

Arquimedes Cardoso Naranjo, 37, of Houston was indicted March 6 for allegedly using a re-encoded charge card to fraudulently obtain more than 37 gallons of diesel fuel worth almost $100 from a Hempstead meat market last fall.

For failing to pay backup tax, Naranjo is charged with motor fuel tax evasion, along with transporting motor fuel without a shipping document, both second-degree felonies punishable by two to 20 years in prison and up to a $10,000 fine. He also is charged with unlawful use of a criminal instrument (i.e., his truck), a third-degree felony punishable by two to 10 years in prison and up to a $10,000 fine.

In addition, local authorities have charged him with credit/debit card abuse, a felony punishable by confinement in a state jail for six months up to two years.

On Nov. 25, the owner reportedly observed a suspicious transaction at one of the store’s fuel pumps and contacted local authorities. They confiscated several “cloned” cards including the gift card allegedly used when the defendant pumped fuel directly into a “saddle tank” on his box truck.

Investigators discovered that the tank was connected to a fuel “bladder” in the cargo area. The truck had been further modified to receive, transport and dispense large quantities of fuel, reports show.

CID assisted the Waller County Sheriff’s Office in the investigation of the case, which is pending prosecution in Waller County.

Guillermo Enamorado, 50, and Alain Garcia-Cabrales, 29, both of Houston, pleaded guilty in a Brazoria County district court to using re-encoded charge cards to unlawfully obtain large quantities of diesel fuel from a chain convenience store in Pearland a year ago. They each received 11 months in state jail, with more than 100 days’ jail time credited, and were ordered to pay court costs.

Each defendant admitted to credit/debit card abuse and fraudulent use/possession of identifying information, both felonies punishable by confinement in a state jail for six months up to two years. Related charges of motor fuel tax evasion, a second-degree felony punishable by imprisonment for two to 20 years and a fine of up to $10,000, were dismissed in their plea agreements.

On May 21, 2019, the store manager noticed a suspicious transaction at a pump involving a vehicle that had been there earlier. She notified Pearland police who arrested the defendants near the scene. They reportedly had pumped almost 160 gallons of diesel fuel worth more than $400 into their two vehicles. Officers confiscated 21 charge cards including a Disney Mickey Mouse gift card re-encoded with stolen credit/debit card numbers.

Officers discovered 100-gallon steel auxiliary tanks in the compartment of a box van driven by one of the suspects and in the bed of a pickup truck driven by the other suspect. Both vehicles had been modified with pumps and hoses to receive, transport and dispense motor fuel, according to reports, and bore temporary tags.

Ernesto Jesus Rodriguez-Izaguirre, 28, of Austin was arrested for allegedly using re-encoded charge cards to unlawfully obtain 90 gallons of diesel fuel worth almost $240 from a chain convenience store in Temple last summer.

On June 4, 2019, a store manager alerted local police that a customer suspected of previously having made fraudulent purchases was there making multiple transactions with different cards. Officers arrested him at the scene, recovering 12 “cloned” cards from a wallet found inside the van he was driving.

They also discovered a toggle switch inside the fuel door of the van which, according to reports, contained an auxiliary fuel tank, hose, meter and nozzle in the rear.

Rodriguez-Izaguirre is charged with motor fuel tax evasion, a second-degree felony punishable by imprisonment for two to 20 years and a fine of up to $10,000. He was served with an arrest warrant in Bell County Jail, where he was already being held on local charges.

CID assisted the Temple Police Department in the investigation of the case, which is pending prosecution in Bell County.

On March 10, Rodriguez-Izaguirre pleaded guilty in a Travis County district court to motor fuel tax evasion and credit/debit card abuse. He was sentenced to 30 days in jail and eight and five years’ probation, to be served concurrently, in lieu of six-year and two-year prison sentences, respectively. He also was fined $2,000 plus court costs and ordered to perform 200 hours of community service.

Credit/debit card abuse is a felony punishable by confinement in a state jail for six months up to two years.

The defendant admitted using a re-encoded credit card to unlawfully obtain more than 74 gallons of diesel fuel worth almost $200 from a Pflugerville convenience store in March 2018.

Eunelio Blancos, 39, of Houston was indicted Feb. 18 for allegedly using re-encoded charge cards to unlawfully obtain approximately 107 gallons of diesel fuel from a Houston convenience store late last year.

Blancos is charged with engaging in a motor fuel transaction without a license. Local authorities also have charged him with fraudulently using/possessing counterfeit credit cards. Both offenses are third-degree felonies punishable by two to 10 years in prison and up to a $10,000 fine.

On Dec. 6, 2019, local police reportedly observed the defendant conducting multiple transactions and confiscated nine “cloned” charge cards in his possession. Officers also discovered an auxiliary fuel tank concealed in the bed of his pickup truck. Reports show that it had been modified to receive, transport and dispense fuel.

CID assisted the Houston Police Department in the investigation of the case, which is pending prosecution in Harris County.

April 28

Brandon James Gressett, 33, of Seminole pleaded guilty in a Gaines County district court in January to motor fuel tax evasion, receiving deferred adjudication (no final conviction) and four years’ probation. He also was ordered to pay $484 in restitution plus court costs.

The offense is a second-degree felony punishable by imprisonment for two to 20 years and a fine of up to $10,000.

Gressett admitted unlawfully obtaining approximately 216 gallons of dyed diesel fuel from his employer, a local construction machine rental service, and offloading it into a storage tank at a residence.

In Texas, non-taxable diesel fuel is dyed red and authorized almost exclusively for off-road, agricultural use by permit-holders.

Orlando Ramirez Sanchez, 30, of Houston pleaded guilty in a Harris County district court in December to collaborating with others to make re-encoded charge cards, receiving deferred adjudication (no final conviction) and five years’ probation. He was fined $5,000 plus court costs.

Sanchez admitted engaging in organized criminal activity, a first-degree felony punishable by imprisonment for five to 99 years or life and a fine of up to $10,000. Related felony charges of credit card abuse and engaging in a fuel transaction without a license were dismissed in the plea agreement.

State troopers arrested Sanchez in October 2018 in Houston upon observing him make eight diesel fuel transactions using multiple credit cards. They confiscated 18 “cloned” cards and discovered an auxiliary tank in his pickup truck modified for receiving, transporting and dispensing motor fuel.

Subsequent investigation revealed that Sanchez and other individuals were involved in manufacturing phony cards containing other cardholders’ account information.

CID assisted the Department of Public Safety in the investigation of the case.

April 27

Quang Buu Merideth, 53, of Grand Prairie pleaded no contest in a Tarrant County criminal court last fall to repairing coin-operated amusement machines without a license in Arlington in 2017.

Under a plea agreement, Merideth received deferred adjudication (no final conviction) and 12 months’ probation. Court costs were assessed but no fine or community service. The offense is a Class A misdemeanor punishable by up to a year in jail, a fine of up to $4,000 or both. The former owner of YGI Amusement Machines admitted that he did not have the required state license to repair coin-operated machines and should not have been doing so in July 2017.

Ector County sheriff’s deputies arrested Merideth in February 2019 after stopping him for a traffic violation. At the time, three other misdemeanor warrants issued by CID were pending against him in Tarrant, Dallas and Wood counties.

April 25

Tariq Sabah Khalifa, 38, of Watauga pleaded guilty to operating six “8-liner” video games without a license or registration certificate at his Fort Worth convenience store last spring.

Khalifa received deferred adjudication (no final conviction) and nine months’ probation from a Tarrant County criminal court judge. He was assessed court costs but no fine or community service. A tobacco tax charge for possessing less than 10,000 unstamped cigarettes was dismissed in his plea agreement.

Both offenses are Class A misdemeanors punishable by up to a year in jail, a fine of up to $4,000 or both.

The video games, similar to slot machines, were not bearing state-issued decals when they were discovered during a complaint-based inspection on April 6, 2019. Investigators also found 91 unstamped cigarette sticks behind the clerk’s counter.

April 1

Mohammad Salman, 56, of Highland Village was indicted last winter for purchasing untaxed tobacco products from an unlicensed distributor and failing to maintain required records.

Salman is charged with two counts of possession of tobacco on which more than $50 in taxes were due and one count of a books and records violation. Each offense is a third-degree felony punishable by two to 10 years in prison and up to a $10,000 fine.

Based on an inspection of the defendant’s Southlake tobacco shop, Smoker’s Dream, on Dec. 20, 2019, investigators claim that the defendant bought tobacco products from an unlicensed distributor on at least five occasions between Aug. 7 and Nov. 13, 2018. He allegedly failed to provide valid, proper invoices in response to a records demand.

The case is pending prosecution in Tarrant County.

Mohammad Tahir Khan, 60, of Waco pleaded guilty in January to tobacco tax evasion and a related recordkeeping violation, receiving deferred adjudication (no final conviction), six years’ probation and fines totaling $1,500, plus court costs.

He admitted to both counts of his indictment: possessing tobacco products on which taxes were due of more than $50 and a books and records violation for not producing invoices for the transactions. Each offense is a third-degree felony punishable by two to 10 years in prison and up to a $10,000 fine.

A McLennan County district judge fined him $750 per count and ordered his two probated sentences be served concurrently. Six other related charges were considered for sentencing purposes.

In the fall of 2017, the owner of Bellmead Tobacco Store bought almost $20,000 worth of tobacco from a Pennsylvania distributor for resale without paying more than $12,000 in Texas tobacco taxes. A Pennsylvania state tax investigator alerted CID to the illicit purchases.

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