Permian Basin Men Sentenced To Federal Prison In Multi-Million Bank Fraud Scheme
In Midland this afternoon, 36-year-old Raymond Holguin, Jr., of Odessa and 37–year-old Gustavo Pizarro of Midland were sentenced to 41 months and 18 months, respectively, in federal prison for defrauding My Community Federal Credit Union of millions of dollars announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent in Charge Douglas E. Lindquist, El Paso Division.
In addition to the prison term, United States District Judge Robert A. Junell ordered that Holguin pay $3,934,627 restitution and be placed under supervised release for a period of five years after completing his prison term. Judge Junell ordered that Pizarro pay $3,914,680 restitution and be placed under supervised release for a period of five years after completing his prison term. Judge Junell also ordered both defendants to surrender to federal authorities on or before February 18, 2014, to begin serving their prison terms.
Last year, Holguin, Pizarro and 40-year-old Michael Franco of Midland all pleaded guilty to one count of conspiracy to commit bank fraud in connection with this investigation. According to court records, beginning in April 2007, the defendants engaged in an 18-month-long scheme that defrauded the FDIC-insured financial institution through the issuance of fraudulent car loans. Holguin, operator of Motor City, an auto dealership in Odessa, TX; Pizarro, General Sales Manager at Motor City; and, Franco, a loan officer at My Community Federal Credit Union, all devised a plan to approve car loans for customers who did not meet the credit union’s lending standards. Holguin and Pizarro presented auto loan applications to Franco that included false information such as inflated income. Holguin and Pizarro would also add amenities to the cars that did not exist in an effort to increase the value of the car and receive a larger loan amount. Franco never verified any of the information contained in the loan documents before processing the loans and, in return, was paid a kickback by Holguin for every car loan that was approved. The scheme resulted in Franco approving more than 300 fraudulent car loans on behalf of Holguin and Pizarro which led to a loss at My Community Federal Credit Union in excess of $4 million.
On November 25, 2013, Franco was sentenced to 18 months in federal prison followed by five years of supervised release and ordered to pay $4,122,532.19 restitution to the bank. All restitution amounts ordered by the Court in this case are to be paid joint and several by the defendants.
The case was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant United States Attorney V. LaTawn Warsaw.