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Financial Crimes
12/02/2013

Former governor of state of Tamaulipas, Mexico, and the owner of a Mexican construction firm indicted on RICO charges

Fernando Alejandro Cano Martinez, 57, the owner of a Mexican construction firm
Tomas Yarrington Ruvalcaba, 56, the former governor of the State of Tamaulipas, Mexico
Tomas Yarrington Ruvalcaba, 56, the former governor of the State of Tamaulipas, Mexico

BROWNSVILLE, Texas — A federal indictment unsealed Monday charges the former governor of the state of Tamaulipas, Mexico, and the owner of a Mexican construction firm, with conspiring to violate the provisions of the Racketeer Influenced and Corrupt Organization (RICO) statute.

This indictment was announced by U.S. Attorney, Kenneth Magidson, Southern District of Texas, and Robert L. Pitman, Western District of Texas. This investigation was conducted by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), the Drug Enforcement Administration (DEA), Internal Revenue Service's Criminal Investigation (IRS-CI), the FBI, and the Texas Attorney General's Office.

Tomas Yarrington Ruvalcaba, 56, the former governor of the State of Tamaulipas, Mexico, and Fernando Alejandro Cano Martinez, 57, the owner of a Mexican construction firm, are indicted on RICO charges. The two men are also charged with conspiracy to launder money, conspiracy to defraud and conspiracy to make false statements to federally insured U.S. banks. The sealed indictment was returned in May by a federal grand jury in Brownsville, and unsealed Dec. 2.

According to the indictment, beginning about 1998, Yarrington Ruvalcaba received large bribes from major drug traffickers operating in the Mexican state of Tamaulipas, including the Gulf Cartel. In return, Yarrington Ruvalcaba allegedly allowed them to operate their large scale, multi-ton enterprises freely, which included smuggling large quantities of drugs to the United States for distribution. From 2007 to 2009, Yarrington Ruvalcaba allegedly became involved in smuggling large amounts of cocaine through the Port of Veracruz into the United States.

Yarrington also allegedly collected bribes from commercial operations in Mexico, according to the indictment. Cano Martinez operated Materiales y Construcciones Villa de Aguayo, S.A. de C.V., a construction firm in Tamaulipas that received significant public works contracts during Yarrington Ruvalcaba's term as governor. The indictment alleges that Cano Martinez, in turn, paid bribes to Yarrington Ruvalcaba to include the acquisition of real estate in front names for him.

Yarrington Ruvalcaba also faces the following separate charges: conspiracy to violate the provisions of the Controlled Substances Act, conspiracy to structure currency transactions at a domestic financial institution, and two substantive bank fraud charges; Cano Martinez also faces additional charges for bank fraud.

Yarrington Ruvalcaba served as governor of Tamaulipas from 1999 to 2004. Tamaulipas lies along the southern border between the United States and Mexico directly across from Brownsville and Laredo, Texas.

The indictment further alleges Yarrington Ruvalcaba also received control over stolen public funds in the latter part of 2004. Portions of those funds were allegedly used to buy a Sabreliner 60 airplane in January 2005. As part of that purchase, $300,000 was transferred to a U.S. bank account. Another portion of the allegedly stolen funds, $5 million in Mexican pesos, was transferred to Cano Martinez in the spring of 2005, according to the indictment.

Court documents state that in 1998, Yarrington Ruvalcaba and Cano Martinez became involved in acquiring valuable assets in the United States, using front names and business entities established starting in 2005 to disguise the true ownership of the assets. The assets allegedly included bank accounts, residences, airplanes, vehicles and real estate in Bexar, Cameron, Hidalgo and Hays counties; many of these assets were acquired via allegedly fraudulent loans from banks in Texas. The bank accounts established in front names at Texas banks were used to receive and disburse money to carry the ongoing costs of the assets, such as loan costs and condo fees.

The indictment identifies numerous specific front entities involved in the scheme, each of which allegedly applied for multi-million dollar fraudulent loans at Texas banks, which Cano Martinez allegedly personally guaranteed. The indictment details a total of more than $7 million in transfers into the U.S. accounts of the front entities.

Additional entities were created and used to apply for other loans to fund the purchase of still other assets, according to the indictment. Numerous currency transactions were allegedly conducted at First National Bank, headquartered in Edinburg, Texas, in a structured manner in amounts at or below $10,000 in order to evade the filing of Currency Transaction Reports by the bank.

Neither Yarrington Ruvalcaba nor Cano Martinez is in U.S. custody; warrants for their arrest remain outstanding. Anyone with information about their whereabouts is asked to contact Homeland Security Investigations at 956-542-5811. Persons calling from Mexico should call 001-800-010-5237.

Conviction on the RICO and money laundering charges each carry sentences of up to 20 years in prison; conspiracy to commit bank fraud carries as possible punishment up to 30 years. The drug conspiracy charges carry a term of imprisonment of at least 10 years, if convicted. The currency-structuring charges carry a possible five-year-term of imprisonment.

The indictment also includes a notice of forfeiture. Some assets identified in the indictment already have been seized by the United States in civil forfeiture actions over the course of the investigation, including: about 46 acres in Bexar County, a condo on South Padre Island, a 2005 Pilatus airplane, and residences in Hidalgo and Hays counties.

The U.S. government acknowledges with gratitude the significant assistance received from the government of Mexico in the course of this investigation, including sharing evidence and expertise.

Assistant U.S. Attorneys Charles Lewis, Julie K. Hampton and Jody Young are prosecuting this case.

An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted through due process of law.