Ruben Gallegos Sr., the president of International Education Services, and Juan Jose Gonzalez, the IES finance director, have been indicted on conspiracy and theft concerning programs receiving federal funds, federal court documents reflect.
These are the same charges Ruben Gallegos Jr., CEO of IES, was indicted on. Gallegos Jr. was hospitalized Wednesday after suffering a cardiac event.
The indictments against Gallegos Sr. and Gonzalez were handed down Aug. 30 and unsealed Thursday.
Gallegos Sr. and Gonzalez made their initial appearance Thursday before U.S. Magistrate Judge Ronald G. Morgan Thursday. Gallegos Sr.’s bond was set at $250,000 while Gonzalez’s bond was set at $100,000. As both men paid their instructed deposits on their bonds, they were to be released from federal custody. The conditions of their bonds include home confinement.
Their detention and arraignment hearings are scheduled for Sept. 14 before Morgan.
Summons for Gallegos Sr. and Gonzalez were issued Tuesday informing them that they had been indicted.
Among the charges and according to a portion of the indictment, Gallegos was paid salaries way over the $183,000 cap limit with his 2017 salary at $435,416.88. The indictment also states Gallegos Sr. was paid $506, 0032.22 and Gonzalez $377,060.96 — also in violation of the salary caps — but their names are redacted in the document.
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.
Gallegos Jr. served as CEO of IES from 2014 to 2018, Gallegos Sr., as president, and Gonzalez as finance director until the federal government decided it would not renew its funding for the IES shelter.
According to the Aug. 30, unsealed federal indictment, from 2014 through 2018, Gallegos Sr., Gallegos Jr. and Gonzalez did knowingly conspire with another unnamed person to commit an offense against the United States, to “embezzle, steal, obtain by fraud knowingly convert without authority, and intentionally misapply property that is valued at $5,000 U.S. dollars or more, and is owned by, or is under the care, custody, or control of, an organization that receives more than $10,000 U.S. dollars in federal assistance in any one year period.”
The indictment reads that from 2014 to 2017, Gallegos Jr., Gallegos Sr. and Gonzalez caused IES to use federal grant funds to pay themselves salaries that were hundreds of thousands of dollars above the salary cap imposed by federal regulations.
The United States Congress prohibited use of grant funds to pay salaries above a certain rate. In addition, federal regulations further limited spending of grant funds.
The indictment also states that Gallegos Jr. and Gallegos Sr., and IES did not comply with federal regulations requiring competitive bidding and did not comply with federal regulations setting rental cost limits in less-than-arms lengths transactions. The indictment further states the “defendants caused IES to lease properties, such as vacant lots and residential properties that were not used to provide any meaningful services to alien children.”
The federal government is seeking to seize $100,000 or more in U.S. currency and multiple properties on Maverick Road that are owned by the defendants, the federal indictment reads. One of the properties on Maverick Road is a small frame house with a large tract of land located next to it.
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