SEVEN TRANSMIGRANTE EXTORTIONISTS PLEAD GUILTY IN FED COURT

By U.S. Attorney's Office

Southern District of Texas

HOUSTON – Another individual has pleaded guilty in a long-running and violent conspiracy which involved price fixing, extortion and money laundering.

Jose de Jesus Tapia Fernandez, 47, Brownsville, admitted to conspiracy to commit money laundering. He joins seven others who have entered guilty pleas for their various roles in a scheme to monopolize the transmigrante forwarding agency industry in the Los Indios border region near Harlingen and Brownsville.

Those convicted include the leader in the conspiracy - Carlos Martinez aka Cuate, 38, Mission – who had previously admitted to conspiracy to fix prices and allocate the market for transmigrante forwarding agency services and one count of conspiracy to monopolize the same market as well as interference with commerce by extortion, conspiracy to do so and conspiracy to commit money laundering.

Transmigrantes are individuals who transport used vehicles and other goods from the United States through Mexico for resale in Central America. Transmigrante forwarding agencies are U.S.-based businesses that provide services to transmigrante clients, including helping those clients complete the Mexican customs paperwork required to export vehicles into Mexico.

“Price fixing harms both the public and the business community,” said U.S. Attorney Nicholas J. Ganjei for the Southern District of Texas. “Schemes like this artificially drive up prices, forcing consumers to pay more than they ordinarily would. At its core, such market collusion is nothing more than theft from consumers.”

“These guilty pleas bring to justice individuals who used violence and extortion to fix prices and monopolize the market for essential services that Americans rely on to earn a living,” said Director of Criminal Enforcement Emma Burnham of the Justice Department’s Antitrust Division. “The Antitrust Division will continue to use every tool at its disposal to protect the public by prosecuting violent criminals – including those who aim to corrupt America’s free markets.”

“Today’s pleas reflect the relentlessness of the federal government’s pursuit of transnational criminal organizations that exploit international trade and the U.S. economy,” said Special Agent in Charge Craig Larrabee of Homeland Security Investigations (HSI) San Antonio. “This violent scheme was fueled by greed that undermined the safety and economic security of the border region; HSI has prioritized significant resources to protect the U.S. and our legitimate trade.”

“These defendants tried to rule through fear, using threats, violence and intimidation to eliminate competition,” said Assistant Director Chad Yarbrough of the FBI Criminal Investigative Division. “Their guilty pleas send a clear message that price fixing and market allocation are serious crimes, and we will hold those accountable who put profits over the law and fair commerce.”

The co-conspirators fixed prices and monopolized the market for transmigrante forwarding agency services by requiring participants in the transmigrante industry to pay money into a “Pool” and dividing revenues among themselves. Market participants who were not part of the conspiracy had to join and pay into the Pool. Pool members enforced the rules by monitoring whether forwarding agencies were charging the agreed-upon prices, including by posting prices publicly on social media and monitoring whether agencies were paying into the Pool as required.

Some involved in the scheme also conspired to force forwarding pay other extortion fees, including a “piso” for every transaction processed in the industry as well as a fine for operating in the market outside of Pool rules. Conspirators perpetrated acts of intimidation, coercion and violence in furtherance of the antitrust and extortion conspiracies.

Martinez was responsible for at least $9,500,000 in extortion payments.

Martinez and Tapia Fernandez also laundered extortion proceeds. Cash obtained from the extortion conspiracy was deposited into bank accounts Martinez and his family controlled. Those deposits were made to conceal and disguise the nature, source, ownership and control of the proceeds.

To read rest of statement, click on link: https://www.justice.gov/usao-sdtx/pr/eight-guilty-wide-ranging-scheme-monopolize-industry-serving-transmigrantes