Citing the case against Ruben Gallegos Sr., Ruben Gallegos Jr., and Juan Jose Gonzalez as one that is quite “complex “and involves fraud loses that will exceed $9.5 million, according to authorities, the U.S. Attorneys Office is requesting more time to prosecute the case.
The trio face theft and embezzlement charges that they are accused of committing during the time they worked and operated the International Educational Services or IES for migrant children.
According to a federal court motion filed Tuesday, federal authorities have asked U.S. District Judge Fernando Rodriguez Jr. to certify the case as “complex” and set a status conference so that new discovery schedule and motion deadlines can be set.
Gallegos Sr., Gallegos Jr., and Gonzalez were indicted on the charges in August, and 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.
In its motion requesting Rodriguez certify the case as “complex,” the government writes the prosecution of the case “will involve large amounts of evidentiary materials, documents, reports and/or testimony regarding numerous financial transactions occurring over a span of five years with documented fraud losses that will likely exceed $9.5 million dollars.”
The government writes it has obtained thousands of documents during the investigation, and during discovery, it will have to review bank records, property records, grant proposals, grant awards, budgets, audit reports, tax records, employment records, leases, e-mails, and written correspondence.
“While not all these items will be admitted as evidence, substantial numbers of them area relevant to the charges,” the motion reads.
The government estimates the trial will take about two weeks and anticipates calling about 30 witnesses from various agencies. Some of these witnesses may live out of the area.
The motion also states, “It is anticipated that the case may present novel questions of fact and/or law and it is unreasonable to expect adequate preparation for pretrial proceedings or for the trial itself within the time limits established,” by the government code which pertains to rights for a speedy trial.
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., 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.”
According to earlier 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 Magistrate Judge Ronald G. Morgan.
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, they face up to 10 years in federal prison, and or a $250,000 fine plus three years supervised release.
All three men are out on bond.
