GALLEGOS JR. LIVED HIGH ON THE HOG BEFORE INDICTMENTS

By Juan Montoya 

The mills of the gods (feds), local lawyers say, grind slowly, but grind exceedingly fine.

So fine, in fact, that lawyers representing Ruben Gallegos, Ruben Gallegos Jr. and Juan Gonzalez – former president, CEO, and the finance director of International Education Services respectively – have asked for repeated continuances from the federal courts citing the complexity of the federal charges filed against them August 2022. In fact, so has the government.

All three face theft and embezzlement charges they are accused of committing during the time they worked with and operated IES. On February 8 attorneys representing Gallegos Jr. and Gallegos Sr. stated that they continued to receive "discovery" from the federal government and "discovery in this matter is voluminous."

A federal motion filed Feb. 10 by Gonzalez's attorney – Reynaldo "Trey" Garza – states he is not ready to proceed with this matter and that at an earlier court date, "the matter was certified as complex by order of this court."

The federal docket states that jury selection is scheduled for May 8, but at this rate, don't hold your breath.

Count one of the indictment charges them with conspiracy. Count two charges them with theft concerning programs receiving federal funds

Among the charges and according to a portion of the indictment, Gallegos Jr. was paid salaries way over the $183,000 cap limit with his 2017 salary at $435,416.88. 

But that only covers that year. Other documentation filed on IRS Form 990, Return of Organization Exempt from Income Tax, listed their salaries and benefits, respectively, $677,242 (Sr.), $663,240 (Jr.), and $546,877 (Gonzalez) in salaries and benefits.

(Eduardo Andres Lucio is former Texas State Rep. Eddie Lucio III, and was listed as receiving $125,000 a year as I.E.S.'s legal counsel. But there is talk that the actual total approached $400,000. Since the story was published, they have erased all the pictures of them together on their Facebook page, especially when Ruben calls Eddie his business partner. Shouldn't the state rep have known better?And is that the reason that Sen. Eddie Lucio Jr. and Lucio III decided not to run for re-election?)

According to the Appellate Division of the Department of Health and Human Services Departmental Appeals Board, the total amount of IES expenditures of federal funds to house migrant children "disallowed" amounted to $17,673,785.40. (DAB 3055, Docket Nos. A-18-46 and A-18-47 from Dec 30, 2021.) 

The defendants are also charged with approving transactions with Limited Liability Corporations (LLCs) controlled by the Gallegos with less than arms-length transactions and used federal funds to – among other things – pay for construction on property owned by them even though reimbursement of such costs were not allowed by federal grant regulations.

Additionally, the indictment charges that the three contracted for unallowable consulting fees from related individuals or entities paid with federal funds. They are not named in the indictment, but we're sure there are some people who did business with IES losing sleep as the indictments start to rain. Some have claimed that a portion of their extravagant "compensation" found its way back to Gallegos Jr.'s pockets.  

But if anyone flaunted the cash, it was Gallegos Jr., who – in collaboration with former Texas State Rep. Eddie Lucio III, the IES board's External Affairs, in-house counsel – lived high on the IES hog for years and flaunted his access to his ill-gotten gains. 

There were the private jets jaunts to exclusive Jackson Hole, Wyoming posted (since erased) by Gallegos Jr. Then, of course, their jaunts to the exclusive Park City Mountain, Utah ski resort and rubbing elbows with Mixed Martial Arts (MMA) heavyweight stars like Frank Mir in Las Vegas, one of his Vegas "friends" who was among the many fighters paid by Gallegos to promote his and Lucio III's clothing line "Ganas." (In fact, he had a slot machine tattooed on his chest as can be seen in the photo at top.)

The IES contracted with the Unaccompanied Alien Children Program and provided temporary shelter care and other related services to unaccompanied alien children, according to the federal indictment.
IES received almost all of its funding in the form of federal grants, and for each fiscal year from 2014 through 2018, it received millions of dollars in federal grant funds.

Private jet jaunts to exclusive ski resorts or to Vegas to rub elbows with celebrities were just part of the way Gallegos Jr. splurged the pile of cash the government awarded IES. There were also the "toys" like pedigree dogs, and motorized tricycles.

Through all this, Gallegos Jr. and his "friends" in South Texas lived in the lap of luxury paid by the federal government funds meant to provide temporary shelter and other services to unaccompanied minors.    

If found guilty on count one of the indictment, each man faces five years in federal prison, and/or a $250,000 fine and three years supervised release. If found guilty on count two of the indictment, they face up to 10 years in federal prison, and or a $250,000 fine plus three years supervised release.

All three have pleaded not guilty to the charges and are out on bond.

As we said at the start of this post, the mills of the gods (feds) grind slowly, but grind exceedingly fine.