McALLEN — The day after he pleaded guilty to federal bribery charges, Omar X. Romero is no longer the Peñitas city manager, but his role with the city remains unclear.
Romero, 38, pleaded guilty to one count each of bribery and bankruptcy fraud in McAllen federal court Wednesday afternoon in relation to two separate schemes involving the Agua Special Utility District and ambulance service provider Hidalgo County EMS.
The now former city manager turned himself in to federal authorities and pleaded guilty to the charges outlined in a criminal information report that was filed by federal prosecutors last Friday.
COUNT 1
During his arraignment Wednesday, Romero admitted to bribing at least one public official in exchange for the favorable votes of Agua SUD board members for the purchase of a water tank around Jan. 19, 2018.
Romero used a telephone, in violation of the Travel Act, to communicate with Agua SUD Board Member A in facilitation of the sale of the water tank, prosecutors said during a reading of a statement of facts.
As part of the scheme, Romero admitted to bribing the unnamed board member, while also paying a second unnamed person to secure board votes.
“Based on the solicitation, the defendant agreed to provide Board Member A with $6,000,” Assistant U.S. Attorney Roberto “Bobby” Lopez Jr. said, reading from the statement.
“As part of the funds received, defendant paid $42,500 to Individual A,” for the purpose of securing more votes, Lopez said.
Prosecutors also claim Romero charged the water utility with some $31,800 in storage fees that were approved by the utility’s general manager without board approval.
Agua SUD’s purchase of the storage tank came after the board declared an emergency in January 2018. That declaration allowed the board to circumvent the competitive bidding process public entities normally rely upon to obtain big-ticket purchases at the lowest price feasible.
“I don’t actually believe that Agua SUD needed that water tank or that there was an emergency,” Lopez said while further explaining the charges against Romero Wednesday.
The prosecutor went on to add that the tank at the center of the criminal complaint was actually the second such item Romero had sold to the utility district, and implied that Agua SUD hadn’t needed the first tank either.
Though officials never mentioned specifics about the water storage tank in open court, The Monitor obtained a copy of a federal subpoena issued to the water district this May that makes reference to a “200,000 gallon booster station in the northern area along Western Road” that the district authorized the purchase of on Jan. 17, 2018.
In addition, the subpoena also demanded the district hand over copies of any communications between Romero and the district regarding the purchase.
The subpoena also requested copies of board agendas and minutes, documents governing how the district enters into contracts, fiscal audits from 2016 through 2020, and the district’s policies regarding document retention.
Furthermore, the subpoena sought information regarding the district’s connection to Romero, Mission Mayor Armando O’Caña, former Agua SUD General Manager J. Eddie Saenz, as well as several other individuals and companies related to them.
Among those companies were Romero’s ST Infrastructure Group, and Government Asset Services, as well as Saenz’s CassLee Investments LLC.
COUNT 2
In count 2, Romero pleaded guilty to bankruptcy fraud related to the bankruptcy proceedings of Hidalgo County Emergency Services Foundation, which operated Hidalgo County EMS, once the largest ambulance service provider in the region.
Neither Hidalgo County Services Foundation nor Hidalgo County EMS have any affiliations with Hidalgo County governance or operations.
The criminal complaint states that Romero “knowingly and fraudulently received a material amount of property from a debtor after the filing of a case under Title 11 of the United States Code, with the intent to defeat” the bankruptcy proceedings.
Romero was appointed the chief restructuring officer on Nov. 4, 2019 during the pendency of the EMS’s bankruptcy case, and as such, was responsible for all of the company’s financial transactions.
Last month, a bankruptcy judge found that Romero’s company, Government Asset Services, had engaged in fraud by failing to disclose transactions involved in the bankruptcy case.
Romero admitted to taking $50,000 from the estate “that the bankruptcy court had not authorized” nor had he “earned as compensation for his services,” according to a Wednesday news release from the U.S. Attorney’s Office.
Earlier this year, the owner of Hidalgo County EMS, Kenneth B. Ponce, 48, also pleaded guilty to bankruptcy fraud.
“Ponce failed to disclose or falsified certain transactions in order to conceal property from the bankruptcy estate,” according to a separate Department of Justice news release.
Ponce also admitted to receiving $50,000 that “another individual had embezzled from the Hidalgo County EMS bankruptcy estate,” the March 17 news release states.
Ponce admitted to concealing assets from the bankruptcy proceeding, including payments made to property — both real and personal — that he, not Hidalgo County EMS, personally benefited from.
Ponce concealed that Hidalgo County EMS had been paying a company called WFAS Inc. for the lease of two planes ostensibly used for the transport of patients. In reality, Ponce owned WFAS Inc. and used the planes for personal travel.
Further, one of the planes the ambulance service paid to lease was inoperable.
Ponce also admitted to some $264,000 in fraudulent land deals regarding property in Edinburg “in order to give another individual preferential treatment over other creditors,” the news release states.
As part of his guilty plea, Ponce agreed to a money judgement of $124,010, as well as restitution to the ambulance company’s successors.
Ponce is slated to be sentenced Dec. 21.
BOND SET
Meanwhile, shortly after U.S. District Judge Ricardo H. Hinojosa accepted Romero’s guilty pleas, he was escorted to a magistrate judge for a bond hearing.
U.S. Magistrate Judge Juan F. Alanis set bond at $50,000 unsecured, noting that Romero’s lifelong ties to the Rio Grande Valley and his lack of a passport make him a minimal flight risk.
But before arriving at that decision, Alanis held several bench conferences with Lopez, the prosecutor, and Romero’s defense attorney, Thomas J. McHugh.
One of those non-public conversations regarded the value of the water tank at the center of count one of the criminal complaint. Alanis asked Lopez about its monetary value in order to help him make a determination regarding the bond amount.
“There may be some difference in opinion… the difference between the fair market value of the tank and what the district paid,” Lopez said.
“That’s where the rubber meets the road,” he added, before requesting to continue the discussion at the judge’s bench.
Romero is slated to return to court Jan. 20 for sentencing.
Until then, Peñitas officials released a statement Thursday announcing Romero’s removal as city manager, as well as his replacement.
“In light of recent events, Mr. Humberto Garza has been appointed City Manager by the Peñitas City Council, effective immediately,” the statement reads.
Garza, who came to Peñitas after spending two decades with the HIdalgo County Planning Department, will serve as interim city manager while the city searches for Romero’s permanent replacement.
“I think he retired and then he came on board with us, I believe, like four months ago, three months ago, approximately. I’m not too sure as far as the time,” said Peñitas Mayor Rodrigo “Rigo” Lopez.
The city’s statement further adds that Romero will “continue in a supportive role to ensure continuity of services on projects with which he was involved.”
But when asked Thursday if Romero is still, in fact, on the city’s payroll, the mayor said, “That’s still being discussed,” and that he no longer holds an official position within the city.
Monitor reporter Berenice Garcia contributed to this report.
