Albuquerque Man Pleads Guilty to Federal Wire Fraud and Money Laundering Charges
ALBUQUERQUE – Rodney Chavez, 47, of Albuquerque, N.M., pleaded guilty this morning to wire fraud and conspiracy to commit money laundering charges under a plea agreement that requires him to serve a 63 month prison sentence and pay full restitution, estimated at $590,250.00, to the victims of his criminal conduct. The guilty plea was announced by Acting U.S. Attorney Steven C. Yarbrough and Dawn Mertz, Special Agent in Charge of the Phoenix Division of IRS Criminal Investigation.
Chavez and his co-defendants, Wayne Brian Church, Jr., 27, and Joshua G. Ellis, 43, both of Albuquerque, were charged in Jan. 2012, with wire fraud and money laundering charges in a 22-count indictment that generally alleged that the three men defrauded investors in a real estate venture of more than $800,000. Chavez and Church were arrested based on the charges in the indictment in Feb. 2012. Ellis has yet to be arrested and is considered a fugitive.
After Church pleaded guilty in Aug. 2012 to a felony information charging him with conspiracy to commit wire fraud, Chavez and Ellis were charged in a 21-count superseding indictment that was filed in Oct. 2012. The superseding indictment charged Chavez and Ellis with conspiracy to commit wire fraud and five substantive wire fraud offenses. It also charged Chavez with conspiracy to launder the proceeds generated by their fraudulent activities and 14 substantive money laundering offenses, and sought forfeiture of the proceeds of the defendants’ unlawful activities.
During today’s plea hearing, Chavez pleaded guilty to Counts 6 and 7 of the superseding indictment, charging him with wire fraud and conspiracy to commit money laundering, respectively. In his plea agreement, Chavez admitted that, between March 2010 and April 2011, he designed and executed a scheme to defraud a group of investors of their interest in certain properties located in Puerto Peñasco, Mexico. Chavez embarked on the scheme after learning that the investors were interested in selling the properties at a substantial loss after realizing that they would not be able to recoup the full amount of their original investments. In March 2010, Chavez contacted a representative of the investor group under an assumed identity and entered into an agreement to sell the properties on behalf of the investors with the understanding that the investors would receive a return of 30% of their original investments. Despite his stated intention to sell the properties and distribute the agreed amount to the investors, Chavez admitted that he never intended to honor that agreement and instead intended to defraud the investors by selling the properties and retaining the proceeds for himself.
According to the plea agreement, while falsely assuring investors of his efforts to sell the properties on their behalf, Chavez hired a real estate agent to sell the properties and sold five properties, the sales of which generated approximately $847,370.52 in proceeds. After the proceeds were wire-transferred to a bank in Albuquerque with assistance from Church, Chavez did not distribute the proceeds to the investors. Instead, Chavez and Church kept the proceeds and conspired to conceal the source of the proceeds by transferring the money to bank accounts held in the names of businesses they exclusively controlled. None of the proceeds from the sale of properties were returned to the investors.
“Rodney Chavez took advantage of investors who already had lost the value of their investments by falsely promising to help them recoup part of their losses and instead using their proceeds to line his own pockets. Ultimately, the truth caught up to Rodney Chavez and he will spend more than five years in prison for his fraudulent conduct,” said Acting U.S. Attorney Steven C. Yarbrough. “Protecting investors from fraudulent schemes like the one perpetuated by Chavez and his cohorts is a priority for my Office, and those who commit these crimes will be aggressively tracked down and prosecuted.”
“Mr. Chavez preyed on his victims through a pattern of lies and deceit. He created an elaborate scheme that he used to steal. By pleading guilty today and accepting responsibility, Mr. Chavez has taken a positive first step in making amends for the harm he has caused the victims in this case,” stated IRS Criminal Investigation Special Agent in Charge Dawn Mertz.
Chavez will remain in custody pending his sentencing hearing, which has yet to be scheduled. Church remains on conditions of release pending his sentencing hearing when he faces a maximum penalty of 30 years in prison. The charges in the superseding indictment against Ellis are merely accusations and he is presumed innocent unless proven guilty beyond a reasonable doubt in a court of law.
The case was investigated by the IRS Criminal Investigation and is being prosecuted by Assistant U.S. Attorney John C. Anderson.