Leader of Real Estate Telemarketing Fraud Scheme That Defrauded Investors of Over $19 Million Sentenced to 4 Years Prison
DETROIT – An Ecorse resident was sentenced to 30 months in federal prison after having pleaded guilty to committing mail fraud by executing a scheme to defraud his employer, Hankyu Hanshin Express, Inc., announced United States Attorney Dawn N. Ison.
Joining in the announcement was Special Agent in Charge James A. Tarasca, Federal Bureau of Investigation, Detroit Division.
Receiving the sentence from U.S. District Judge Linda V. Parker was Phillip E. Garza, 53, of Ecorse, Michigan. Garza pleaded guilty before Judge Parker to one count of mail fraud in June 2020. His sentencing was delayed because of the pandemic.
According to court records, Garza was employed by Hankyu Hanshin Express (USA) Inc. (HHE), a transportation and logistics services company based in suburban Chicago. HHE had several branch offices, including one in Taylor, Michigan. Garza held the position of ocean export specialist and was responsible for arranging the shipment of sea going goods through third-party shippers.
Garza created a shell company, El Centro Express, that was made to appear to be a third-party shipper. From October 2011 through May 2019, Garza submitted 2,300 invoices to HHE on the letterhead of El Centro Express. As a result, HHE issued 389 checks to El Centro Express and mailed them to a post office box Garza opened in Taylor. Those checks totaled over $1.1 million. Garza used those funds to pay personal expenses. For example, he paid his credit card issuers about $80,000, made monthly car payments totaling about $55,000, and paid about $39,000 to phone companies and cable and Internet service providers. He also made payments on personal loans, paid medical expenses, and went out to restaurants.
The investigation of his case was conducted by the FBI. It was prosecuted by Assistant U.S. Attorney Stephen Hiyama.