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02/14/2008

Former Kickapoo Tribe casino employees, Texas State representative sentenced for scheming to steal more than $2 million

EAGLE PASS, Texas - Four former Kickapoo Tribe casino employees were sentenced on Tuesday to prison terms from 19 1/2 years to two years by U.S. District Chief Judge Walter S. Smith Jr. This announcement was made by U.S. Attorney Johnny Sutton, Western District of Texas. This sentence resulted from a complex investigation lead by U.S. Immigration and Customs Enforcement (ICE), and assisted by U.S. Internal Revenue Service, the FBI and U.S. Department of Interior's Office of Inspector General.

U.S. District Chief Judge Smith imposed the following sentences:

  • Isidro Garza Jr., 57, sentenced to 235 months in federal prison, 3 1/2 years of supervised release, and ordered to pay $500,000 in restitution
  • Martha Garza, 57, sentenced to 24 months in federal prison, 3 1/2 years of supervised release and ordered to pay $100,000 in restitution
  • Arthur Lee Martin, 58, sentenced to 60 months in federal prison and ordered to pay $250,000 in restitution
  • Timoteo Garza, 34, sentenced to 78 months in federal prison, 3 1/2 years of supervised release, and ordered to pay $250,000 in restitution

Isidro and Martha Garza are married to each other; Timoteo Garza is their son. Isidro and his son were both taken into custody following this announcement. Martha Garza and Arthur Lee Martin were released on bond pending the date they will have to report to prison. None of the four are Native Americans.

"The significant sentencing for these individuals is fitting," said Jerry Robinette, special agent-in-charge for ICE Office of Investigations in San Antonio. "I hope these sentences effectively demonstrate that we will hold people accountable for their actions. This case also shows how law enforcement agencies work together to dismantle criminal organizations."

Last year a federal jury convicted Isidro Garza Jr., his son, Timoteo Garza, and Arthur Lee Martin of scheming together to steal more than $2 million from the casino and the tribe. At the time of the crime, Isidro Garza was the Kickapoo Traditional Tribe of Texas gaming representative; Timoteo Garza was a Texas State representative; and Martin was the Kickapoo Lucky Eagle Casino manager. Martha Garza was convicted along with her husband, Isidro, for tax evasion and other related conspiracy charges.

On May 17, 2007, Raul Garza Sr., former chairman of the Kickapoo Casino, was sentenced to three years in federal prison and ordered to pay more than $2 million in restitution for his role in the criminal scheme.

In the spring of 2002 ICE initiated its investigation into alleged money laundering and cash smuggling into Mexico from proceeds earned at the casino. In November 2002, ICE executed a search warrant at the Casino which led to the 19-count indictment.

Indictment Background:

On Dec. 9, 2004, a San Antonio grand jury returned a 19-count indictment in connection with a scheme to steal over $900,000 in tribal funds against the following six individuals: Raul Garza Sr., Isidro Garza Jr., Martha Garza, Timoteo Garza, Arthur Lee Martin and Eagle Pass Attorney Jose J. Ruiz.

In addition to that conspiracy charge, Isidro Garza faced 13 substantive theft charges, and one count of conspiracy to commit money laundering. Raul Garza faced substantive theft charges, three counts of filing false federal income tax returns, and one count of conspiracy to commit money laundering. Ruiz faced one substantive theft charge and one count of conspiracy to commit money laundering. During the first week of the trial, Ruiz's case was dismissed.

Timoteo Garza, Martha Garza and Martin each faced 10 substantive theft charges.

The indictment also included a notice of criminal forfeiture. In the notice, the government sought a monetary judgment against Raul Garza, Isidro Garza and Ruiz in the amount of $310,766.46.

Specifically, the indictment alleges that Isidro Garza manipulated and used the casino operating accounts for personal benefit to avoid scrutiny from tribal members. According to the indictment, Isidro Garza used the casino's American Express corporate credit card to fund about $40,000 in campaign expenses during his 2000 bid for election to the U.S. House of Representatives. Isidro Garza's campaign finance report to the Federal Elections Commission falsely stated that the costs were direct expenditures by Isidro Garza. Actually, the casino paid the credit card bill without any deduction from Isidro Garza's management fee or receiving any reimbursement from Isidro Garza.

The indictment also made the following allegations against Raul Garza: that he stole $1,731.90 from the Kickapoo Community Health Services; he took more than $213,000 in cash withdrawals from the casino cash cage - money that was never deducted from or expensed to Raul Garza; and he used casino corporate credit cards to purchase for his personal use two all-terrain vehicles, and more than $58,000 in furniture and household appliances for both his house in the United States and his house in Nacimiento, Coahuila, Mexico. The credit card bills were paid by the casino without any deduction from Raul Garza's management fee or receiving any reimbursement from Raul Garza.

Additionally, the indictment charged that from Nov. 5, 2002 to June 3, 2004 Isidro Garza, Raul Garza, and Ruiz devised a scheme to conceal from the tribal membership their embezzlement of $310,766.46 from the casino. Those proceeds represented a loan obtained by the Kickapoo tribe from an insurance company for casino improvements. Unbeknownst to the tribal membership, the defendants arranged for money to be transferred from the casino's checking account into Ruiz' law office escrow account to be used as they saw fit.

Assistant U.S. Attorneys William R. Harris, Joe F. Sepeda and Gregory S. Gloff prosecuted this case on behalf of the government.