Eight guilty in wide-ranging scheme to monopolize industry serving transmigrantes

HOUSTON – Another individual has pleaded guilty in a long-running and violent conspiracy which involved price fixing, extortion and money laundering.   

Jose de Jesus Tapia Fernandez, 47, Brownsville, admitted to conspiracy to commit money laundering. He joins seven others who have entered guilty pleas for their various roles in a scheme to monopolize the transmigrante forwarding agency industry in the Los Indios border region near Harlingen and Brownsville.

Those convicted include the leader in the conspiracy - Carlos Martinez aka Cuate, 38, Mission – who had previously admitted to conspiracy to fix prices and allocate the market for transmigrante forwarding agency services and one count of conspiracy to monopolize the same market as well as interference with commerce by extortion, conspiracy to do so and conspiracy to commit money laundering.

Transmigrantes are individuals who transport used vehicles and other goods from the United States through Mexico for resale in Central America. Transmigrante forwarding agencies are U.S.-based businesses that provide services to transmigrante clients, including helping those clients complete the Mexican customs paperwork required to export vehicles into Mexico.

“Price fixing harms both the public and the business community,” said U.S. Attorney Nicholas J. Ganjei for the Southern District of Texas. “Schemes like this artificially drive up prices, forcing consumers to pay more than they ordinarily would. At its core, such market collusion is nothing more than theft from consumers.”

“These guilty pleas bring to justice individuals who used violence and extortion to fix prices and monopolize the market for essential services that Americans rely on to earn a living,” said Director of Criminal Enforcement Emma Burnham of the Justice Department’s Antitrust Division. “The Antitrust Division will continue to use every tool at its disposal to protect the public by prosecuting violent criminals – including those who aim to corrupt America’s free markets.”

“Today’s pleas reflect the relentlessness of the federal government’s pursuit of transnational criminal organizations that exploit international trade and the U.S. economy,” said Special Agent in Charge Craig Larrabee of Homeland Security Investigations (HSI) San Antonio. “This violent scheme was fueled by greed that undermined the safety and economic security of the border region; HSI has prioritized significant resources to protect the U.S. and our legitimate trade.”

“These defendants tried to rule through fear, using threats, violence and intimidation to eliminate competition,” said Assistant Director Chad Yarbrough of the FBI Criminal Investigative Division. “Their guilty pleas send a clear message that price fixing and market allocation are serious crimes, and we will hold those accountable who put profits over the law and fair commerce.”

The co-conspirators fixed prices and monopolized the market for transmigrante forwarding agency services by requiring participants in the transmigrante industry to pay money into a “Pool” and dividing revenues among themselves. Market participants who were not part of the conspiracy had to join and pay into the Pool. Pool members enforced the rules by monitoring whether forwarding agencies were charging the agreed-upon prices, including by posting prices publicly on social media and monitoring whether agencies were paying into the Pool as required.

Some involved in the scheme also conspired to force forwarding pay other extortion fees, including a “piso” for every transaction processed in the industry as well as a fine for operating in the market outside of Pool rules. Conspirators perpetrated acts of intimidation, coercion and violence in furtherance of the antitrust and extortion conspiracies.

Martinez was responsible for at least $9,500,000 in extortion payments.

Martinez and Tapia Fernandez also laundered extortion proceeds. Cash obtained from the extortion conspiracy was deposited into bank accounts Martinez and his family controlled. Those deposits were made to conceal and disguise the nature, source, ownership and control of the proceeds.

Pedro Antonio Calvillo Hernandez, 51, Mission, Roberto Garcia Villareal, 60, San Benito, Sandra Guerra Medina, 70, Rancho Viejo, and Mireya Miranda, 58, La Feria, pleaded guilty to one count of conspiracy to fix prices and allocate the market for transmigrante forwarding agency services and one count of conspiracy to monopolize the same market. Calvillo, Villareal and Carlos Yzaguirre, 61, Mission, also pleaded guilty to one count of conspiracy to interfere with commerce by extortion, while Juan Hector Ramirez Avila, 35, Brownsville, pleaded guilty to one count of structuring a financial transaction to evade reporting requirements.

As part of his plea, Martinez has agreed to forfeit four real properties and $375,000 in seized U.S. currency, pay a fine and full restitution to extortion victims.Guerra, Miranda, Calvillo and Villareal have also agreed to pay fines as part of their plea agreements.

Three others charged – Rigoberto Brown, 40, Brownsville; Miguel Hipolito Caballero Aupart, 72, Brownsville; and Diego Ceballos-Soto, 50, Mexico – are fugitives and warrants remain outstanding for their arrests. Anyone with information about their whereabouts is asked to contact HSI at 1-866-DHS-2-ICE (1-866-347-2423). 

Conspiracies to allocate the market, fix prices or monopolize in violation of the Sherman Act carry up to 10 years in federal prison and a maximum $1 million possible fine. Conspiracy to interfere with commerce by extortion in violation of the Hobbs Act and money laundering conspiracy carry possible prison terms of up to 20 years and maximum fines of $250,000 and $500,000, respectively, while structuring a financial transaction to evade reporting requirements carries up to five years in addition to a $250,000 maximum fine.

The Justice Department’s Antitrust Division, Violent Crime and Racketeering Section (VCRS), U.S. Attorney’s Office for the Southern District of Texas, HSI and FBI conducted the investigation.

Assistant U.S. Attorney Alexander L. Alum is prosecuting the case along with Trial Attorneys Brittany E. McClure, Anne Veldhuis and Michael G. Lepage of the Antitrust Division and VCRS Trial Attorney Christina Taylor.

Anyone with information in connection with this investigation should contact the Antitrust Division’s Complaint Center at 888-647-3258, or visit http://www.justice.gov/atr/report-violations.