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Document and Benefit Fraud
07/01/2014

US leader of fraudulent document ring sentenced to more than 11 years

RICHMOND, Va. — A Mexican national who resided in Pawtucket, Rhode Island, was sentenced Tuesday to 135 months in prison for his role in a violent criminal organization that specialized in manufacturing and distributing fraudulent identification documents. The case was investigated by the Richmond and Norfolk offices of U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI). The Virginia State Police, the Chesterfield County Police Department and the Henrico County Police Department assisted with the investigation.

Manuel Hidalgo Flores, 40, previously pleaded guilty to conspiracy to engage in racketeering, interference with commerce by robbery, and conspiracy to launder money. Further, the defendant is illegally within the United States and faces deportation after he completes his prison sentence.

According to court papers, Manual Hidalgo Flores, 40, is connected to a fraudulent document enterprise previously prosecuted in the Eastern District of Virginia in United States v. Israel Cruz Millan. The enterprise which originally operated in the United States from at least 2008 to November 2010, had cells in Richmond, Norfolk, Virginia Beach and Manassas; Fayetteville and Little Rock, Arkansas; New Haven, Connecticut; Mishawaka, Indiana; Lexington and Louisville, Kentucky; Chelsea, Massachusetts; St. Louis, Missouri; Chapel Hill, Greensboro, Raleigh, and Wilmington, North Carolina; Cincinnati, Ohio; Providence, Rhode Island; and, Nashville, Tennessee.

The criminal enterprise was dismantled within the United States Nov. 18, 2010. In the prior case and connected prosecutions, a total of 30 defendants were convicted. On Feb. 16, 2012, Israel Cruz Millan, the leader of the previous enterprise, was sentenced to 300 months in prison.

Hidalgo Flores admitted to his role in restarting and leading the FDE's continued criminal activities in the United States following the 2010 arrest described above. Beginning at some point prior to February 2012, Hidalgo Flores, also known as "Chino," "Chimuelo" and "Julio," began managing the organization's operations in the United States, supervising operations in Richmond, Virginia; Springdale, Arkansas; Boston, Massachusetts; Raleigh, North Carolina; Cincinnati, Ohio; and Pawtucket, Rhode Island. As in the previous case, the enterprise produced high-quality false identification cards for distribution to illegal aliens. In most cities where the organization operated, Hidalgo Flores placed a cell manager to supervise a number of runners, lower level members of the organization who distributed business cards advertising the organization's services and helped facilitate transactions with customers.

Within each cell supervised by Hidalgo Flores, the cell manager was responsible for distributing the fraudulent documents using information obtained from clients by runners. The runners would recruit illegal alien clients who wished to obtain false identification documents, including counterfeit permanent resident alien cards (also known as green cards), Social Security cards, out-of-state identification cards, and various international documents. Upon identifying a specific client, a runner would relay identifying information and photographs from the client to the printer via cell phone or other method. The printer would, in turn, use a computer and printer to create fraudulent identification documents for the client, depending on the nature of the order received from the client. Once the documents were complete, the runner would usually provide the documents to the client in exchange for U.S. currency. A client would generally pay approximately $150 for a set of fraudulent identification documents (such as a permanent resident alien card and Social Security card). Each cell maintained detailed sales records and divided the proceeds between the runner, the cell manager, and the upper level managers in Mexico. In addition, the enterprise used Western Union and MoneyGram to funnel criminal proceeds to Mexico.

Evidence from previous trials demonstrated that members of the organization tried to drive competitors from their territory by posing as customers in search of fraudulent documents and then attacked the competitors when they arrived to make a sale. In the current case, Hidalgo Flores admitted to his role in targeting a competitor in the Richmond area on Oct. 6, 2013. This defendant, along with others, identified a competitor (referred to as "L.G.") who sold fraudulent documents in competition with the Richmond cell. A codefendant posed as a customer and contacted L.G. about setting up a fraudulent documents transaction. L.G. then met with the co-defendant at a designated location. At the same time, Hidalgo Flores, along with other enterprise members, surveyed the transaction. The defendants planned to follow competitor L.G. after the transaction to find where he (L.G.) produced fraudulent identification documents. The group intended to assault L.G. and steal L.G.'s printing equipment through actual and threatened force, violence and fear of injury. Through this planned conduct, enterprise members hoped to stop L.G. from selling fraudulent identification documents and to enhance their own enterprise's control of the Richmond area fraudulent document market. Unbeknownst to enterprise members, law enforcement officers had also surveyed the Oct. 6, 2013, transaction. Due to law enforcement intervention, competitor L.G. was detained during a traffic stop and the enterprise members fled the area. According to his plea documents, Hidalgo Flores admitted that absent law enforcement intervention, he and his cohorts would have carried out their plan against L.G.

To date, 42 members of this organization have been convicted. In the current case, 11 defendants await sentencing.