Multiple Sentences Handed Down In Progreso Bribery Scheme
For Immediate Release
U.S. Attorney's Office, Southern District of Texas
HOUSTON – The former mayor of Progreso and three others have been sentenced for their convictions related a bribery scheme that permeated the town of Progreso and the local school board, announced United States Attorney Kenneth Magidson.
Omar, Jose and Michael Vela were originally charged along with Jesus Bustos based on their participation in a scheme to create a “pay to play” public contracting system in Progreso. The Velas all pleaded guilty to conspiracy and bribery concerning programs receiving federal funds, while Bustos, 58, pleaded guilty to conspiracy. In a separate, but related case, Orlando Vela was convicted of theft from a program receiving federal funds.
Michael, 30, Omar, 36, and Orlando, 34, are brothers and Jose, 65, is their father. Omar was the mayor of Progreso at the time of the criminal behavior. Michael was the president of the Progreso Independent School District Board (PISD) of Trustees, Orlando was employed by PISD as a risk manager and Jose was PISD’s director of maintenance and transportation.
Today, U.S. District Judge U.S. District Judge David Hittner sentenced Jose Vela to 120 months for the bribery concerning federally-funded programs and a consecutive 31 months for the conspiracy for a total of 151 months in federal prison. Omar and Michael Vela will serve 121 and 71 months, respectively, while Orlando received a 10-month-term. They will all also serve three years of supervised release. In addition, Jose Vela was ordered to pay a $10,000 fine and forfeit $300,000. Omar and Michael Vela were ordered to forfeit $314,000 and $300,000, respectfully, while Orlando was ordered to pay restitution in the amount of $12,874.42.
Bustos will be sentenced Aug. 27, 2014.
From 2004 through 2013, PISD received more than $1 million per year in federal program grants and funds from the U.S. Department of Education. In order to obtain contracts from PISD or from the City of Progreso, contractors were required to pay bribes.
The Velas were able to extract bribes from contractors as a result of their political control of Progreso and PISD. As government officials, Michael and Omar had a level of control over local government. In addition, Jose Vela controlled the PISD School Board by rewarding board members who voted as he directed with bribe money. Through this control over the PISD Board, Jose Vela caused contracts with PISD to be awarded to contractors who were willing to pay him bribes and kickbacks in return. Omar and Michael Vela assisted their father by gathering bribe payments from contractors and delivering the payments to him. They were then given a portion of those monies.
In total, Jose, Omar and Michael extracted more than $300,000 in bribe payments.
Bustos, a local architect, admitted that from 2004 through 2013, he paid bribes and kickbacks to obtain architectural contracts for his architectural firm IDEA Group LLC on public projects in the area. These included the Mario Ybarra Elementary School Construction project in Weslaco and West Elementary School, Fine Arts Center, North Elementary School and the Science and Technology building in Progreso.
In addition, from April 2009 to December 2012, Omar Vela instructed the owner of a plumbing and electrical supply company to provide fraudulent invoices to PISD and the City of Progreso for products they did not provide. When the invoices were paid, the owner returned the funds to Vela, resulting in more than $14,000 in kickbacks.
In a separate, but related case, Orlando Vela admitted he was responsible for directing and managing the school district’s risk management, loss control and safety programs. On May 11, 2012, he formed a company called Borderline Office Supplies which purported to be in the business of supplying office and janitorial products to school districts.
Between May 2012 and March 2013, Orlando Vela submitted invoices to PISD for products that Borderline did not actually supply to PISD. The payments on the fraudulent invoices were approved by PISD’s business manager, Orlando Vela’s wife, and totaled $12,874.42.
All were taken into custody following the sentences today, where they will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation was conducted by the FBI. Assistant United States Attorney Robert S. Johnson is prosecuting the case.
Updated April 30, 2015