McALLEN — The trial against Dominga “Penny” Ledesma, a Raymondville woman accused of participating in a $21 million 8-liner racket, got underway in federal court here Monday.
Ledesma is accused of using her Lyford-based business, Brittany’s Boutique — in coordination with a Lyford game room called El Toro — to skirt around Texas law, which prohibits most forms of gambling.
“This case is about three things: cash, reporting and fraud,” Assistant U.S. Attorney Theodore “Ted” Parran III said during the government’s opening statements to the jury.
Ledesma is charged with 16 total counts, including aggravated identity theft, structuring financial documents to evade reporting requirements and unlawful use of identification.
The jury would hear, Parran said, how Ledesma saw an opportunity to make a hefty profit from a new game room that was set to open up in Lyford.
Federal prosecutors allege that Ledesma concocted a scheme with that game room’s owner, Rene Gamez, to award patrons cash rather than curios if they struck it big on the electronic slot machines at El Toro.
To punctuate their assertions, prosecutors called two men to the stand who were perhaps closer to Ledesma’s business than anyone else — her co-defendant, Gamez, who pleaded guilty earlier this month, as well as her former brother-in-law and accountant, Enrique Ledesma.
It was Gamez who jurors heard from first.
“(To) tell the truth,” Gamez said when asked why he was testifying.
Gamez testified how Ledesma and her husband, Frank, approached him sometime around 2015 with a plan to make money off of a game room by having El Toro give patrons silver pellets when they won a game.
Initially, Gamez was turned off by the couple and their proposal.
“They just weren’t my cup of tea,” Gamez said.
But he eventually agreed to work with the couple.
For every $5 worth of game winnings, EL Toro patrons would receive one silver pellet, which they could then exchange for $5 in cash across the street at Brittany’s Boutique.
Meanwhile, El Toro would source the pellets from Ledesma’s business, buying them at a slight premium of $5.30 in order to allow Ledesma to collect a profit.
Just a couple of months into their business relationship, Ledesma approached Gamez and said she needed identification documents — driver licenses and social security numbers — to continue making the large scale cash transactions.
Ledesma needed the documents to file with the state. Not once, Gamez testified, did Ledesma mention filing documents with the federal government — with the IRS.
Had she told him that, he would have refused to do business with her, according to his testimony.
But that’s exactly what she had been doing with the identity information — using the names of others to file 8300 forms, which are required by both the IRS and the Financial Crime Enforcement Network, or FinCEN, for any cash transactions over $10,000.
In the approximately 3 to 4 years that El Toro Game Room operated — between 2016 and 2019 — Gamez made between $20 to $30 million — money he never reported to the IRS.
That money flowed through Brittany’s Boutique 24 hours a day.
Prosecutors showed jurors the 8300 forms for an 8- to 10-week period that showed more than $2.5 million in cash made its way through Brittany’s Boutique.
During the scheme’s most profitable year, 2017, Ledesma allegedly raked in a gross profit of between $700,000 to $750,000, her former brother-in-law testified.
Enrique Ledesma’s professional relationship with his former sister-in-law began when Dominga Ledesma approached him about doing some accounting work for her.
Enrique Ledesma agreed, and had Dominga Ledesma sign an engagement letter.
“It’s gonna state that I’m not responsible for detecting fraud,” Enrique Ledesma testified Monday afternoon.
He further added that the onus is on the tax reporter to provide accurate information.
When Dominga told him of the large cash transactions taking place at her business, Enrique Ledesma informed her about the 8300 forms and the legal requirement to file them.
In addition to Gamez and Enrique Ledesma, the jurors also heard from two former El Toro employees, a former Brittany’s Boutique employee and a FinCEN compliance officer from Washington, D.C.
The ex-employees, in particular, all testified to how integral the silver-for-cash exchange was to the operation of both Brittany’s Boutique and El Toro.
“My main duty — the reason I got hired (at El Toro) was to go buy silver,” testified former employee Jose Aguilar of his first day on the job.
The trial is scheduled to continue Tuesday morning.