The owner of a Lyford game room has notified federal court officials of his intent to plead guilty for raking in millions while operating an illegal gambling operation.
Rene Gamez Jr. filed the notice in McAllen federal court on Friday.
According to federal prosecutors, Gamez allegedly worked with a woman named Dominga Ledesma, who owns Brittany’s Boutique, a coins and precious metal shop in Raymondville, to flout Texas law, which prohibits most forms of gambling.
During the life of the scheme, which allegedly occurred between May 2017 and October 2018, some $21 million passed back and forth between the pair.
That’s because, rather than offering inconsequential tchotchkes to patrons who won games on Gamez’s 8-liners, he and Ledesma worked together to offer them cold hard cash instead.
“Gamez and Dominga Ledesma created an indirect payout system for the game room customers utilizing trinkets of silver or silver pellets,” reads a copy of a Sept. 15, 2022, criminal complaint against Gamez.
Texas law prohibits gambling establishments from awarding cash prizes to winners. However, they are allowed to give non-monetary prizes valued at less than $5. It’s the so-called “fuzzy animal” exception.
But Gamez wasn’t handing out stuffed animals to those who struck it big on his machines. Instead, he awarded players their winnings in the form of small silver pellets.
The players would, in turn, sell those pellets for cash at places like Ledesma’s shop, which is known for buying and selling precious metals.
The scheme formed a neat-fitting closed loop — one where gamblers didn’t have to walk far to get their cash.
That’s because El Toro Game Room and Brittany’s Boutique are within walking distance of each other.
In an October 2019 criminal complaint filed against Ledesma, federal agents noted that they observed people walking between the two businesses on multiple occasions.
“(N)umerous individuals exit(ed) the El Toro Game Room carrying bags of ‘silver’ and then traveling a short distance … with the ‘silver’ from the El Toro Game Room to Brittany’s Boutique,” the complaint states.
Gamez and Ledesma allegedly went to great lengths to obscure the illegal activity, including attempts at disguising who actually owned El Toro and who was purchasing the silver.
Gamez allegedly used the identity of an elderly man, referred to in court documents as LFR, to obscure his ownership of the game room. Ledesma, in turn, would allegedly use LFR’s information to file fraudulent financial statements.
Federal law requires that cash transactions of more than $10,000 be accompanied by so-called “FinCEN Form 8300.” The forms are submitted to the IRS, as well as the Financial Crimes Enforcement Network, or FinCEN.
Ledesma allegedly used LFR’s information to file 8300 forms representing hundreds of thousands of dollars throughout 2018. However, LFR had died in February 2017, court records indicate.
“Sources have further confirmed this arrangement with Ledesma was an attempt by Gamez to evade reporting requirements and to not be identified by the IRS for illegal sources of income,” the criminal complaint against Gamez states.
Gamez later changed course and used a person, who is a cooperating witness, to obscure his ownership of El Toro.
The cooperating witness told investigators that Gamez paid them $1,000 a month to use their identity.
Gamez also allegedly obtained permits and registered the game machines themselves using the names of different people, whom he also paid.
A federal grand jury handed up the 16-count second superseding indictment against Gamez and Ledesma on Sept. 15, 2022. A magistrate judge issued a bench warrant for the pair on the same day.
Federal investigators arrested Gamez in Hawaii five days later, on Sept. 20, 2022.
He made his first appearance in McAllen federal court more than a month later, on Nov. 4, 2022.
Gamez is charged with three counts of aggravated identity theft, three counts of structuring financial documents to evade reporting requirements, and two counts of unlawful use of identification.
Meanwhile, Ledesma, who is charged with all 16 counts in the indictment.
She is expected to appear in court for a final pretrial conference on Tuesday.
Editor’s note: Gamez plead guilty Tuesday to a single count of structuring financial transactions to evade reporting requirements.
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Lyford game room made at least $21M in just over a year, 2 arrested
