JUDGE GIVES GOV'T. UNTIL OCT. 19 TO PRODUCE I.E.S. EVIDENCE IN GALLEGOS' CONSPIRACY, THEFT TRIAL

 Special to El Rrun-Rrun

A federal judge has extended the time that the government has to find all inter-agency emails and documents related to the case of Ruben Gallegos Sr. an Ruben Gallegos Jr., and Juan Gonzalez, respectively the the former president and vice president and CFO of International Educational Services who are charged with conspiracy, and theft concerning programs receiving federal funds.

Judge Fernando Rodriguez Jr. On Thursday set October 19 as the date that the government has to search and provide the legal representatives of the men with any documents that they can find related to the case. Defense attorneys are hoping that among the materials the government produces there might be exculpatory evidence to assist them in their defense.

"It's a fishing expedition," said an attorney close to the case. "There's nothing there."

Among the charges and according to a portion of the indictment, Gallegos Jr. was paid a salary 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. Gonzalez is married to the sister of Ruben Gallegos Sr., making him his brother-in-law, and uncle (politico) to Ruben Jr.)

In the indictment the government charged that in a series of meetings between them they conspired to to pay themselves $100,000s more than the $183,000 in executive compensation allowed then under the federal grants 2014 through 2018  to the tune of $506,003.22 for Sr., $492,001.62 for Jr., and $377,060.96.

Later, they upped the ante a bit, and gave themselves more raises as can be seen in their non-profit reports to the government. However, the Gallegos Jr. indictment does not over this period. In that report they state that they earned, respectively $677,242 (Sr.), $663,240 (Jr.), and $546,877 (CFO and cuñado and Unc Gonzalez) in salaries and benefits.

The government also charged that the men engaged in real-estate transactions theat violated the arm's-length requirements of the law.

“In September 2017, the OIG identified to Administration for Children and Families (ACF) findings that included less than arms-length agreements related to property leases, violation of executive compensation levels, non-compliance with conflict of interest requirements and procurement procedures, and numerous examples of substantial failures of IES failing to comply with regulations governing allowable costs under (Health and Human Services) awards,” the letter from the ACF to IES stated.

Accordingly, on the disallowance determination, the amount remaining in dispute is $19,633,161.05, which represents the difference between the $19,655,761.05 disallowed minus the $22,600 for which IES does not seek Board review.

"We issue one decision for both appeals consistent with our prior order consolidating the appeals under lead docket number A-18-46. For the reasons and bases set out below, we uphold a total disallowance of $17,673,785.40. This amount accounts for disallowances of $851,756.35 in excess executive compensation, $217,500 in depreciation costs on related-party leases, $8,111,360.35 (of $10,070,736 disallowed) for related-party lease costs, and $8,493,168.70 for the San Benito shelter costs. We also uphold ACF’s decision to withhold a non-competing continuation award."