The case against three men who served as president, CEO, and finance director of International Education Services or IES, and were indicted on charges of conspiracy and theft related to receiving federal funds is making its way through the legal system with jury selection in the case scheduled for Nov. 7 in federal court.
Arraignment hearings for Ruben Gallegos Sr., Ruben Gallegos Jr., and Juan Jose Gonzalez that were scheduled for Wednesday before U.S. Magistrate Jude Ronald G. Morgan but were canceled Monday after Morgan signed their motions requesting they not have to attend the hearings.
According to federal document filings, a final pretrial conference is scheduled for Nov. 1 for all three men, with jury selection in the case scheduled for Nov. 7. Any motions in the case must be filed by Sept. 28 and responses must be filed by Oct. 12. Motion hearings are scheduled Oct.25 and will be heard before Morgan.
All three men are out on bond.
Among the charges and according to a portion of the indictment, Gallegos was paid salaries far above the $183,000 limit, with his 2017 salary at $435,416.88. The indictment also states Gallegos Sr. was paid $506, 0032.22 and Gonzalez earned $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 funding for the IES shelter.
Count one of the indictment charges the three men with conspiracy and count two charges him with theft concerning programs receiving federal funds.
According to the Aug. 30, unsealed federal indictment, from 2014 through 2018, Gallegos Sr., Gallegos Jr. and Gonzalez knowingly conspired 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-length 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.
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, he faces up to 10 years in federal prison, and or a $250,000 fine plus three years supervised release.
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