McALLEN — A man who once offered Mercedes city officials legal guidance has now admitted he broke the law and used public funds and his attorney bank account to do so.
Juan R. Molina pleaded guilty to federal programs theft in McAllen federal court on Tuesday.
“I plead guilty. No one has forced me, threatened me or coerced me,” Molina told U.S. District Judge Marina Garcia Marmolejo, who was sitting in as a visiting judge from Laredo.
According to federal prosecutors, the charges stem from an unnamed business development project the city and its economic development corporation were considering in 2017.
On May 22, 2017, each entity deposited more than $77,000 into Molina’s Interest On Lawyer’s Trust Account, or IOLTA, to safeguard the development project. In total, the city and EDC deposited $154,714.26 into Molina’s IOLTA account.
Attorneys are required to maintain IOLTA bank accounts in order to keep client funds separate from their own.
But Molina violated his attorney oath and his professional duty to the city of Mercedes when he used those public funds for his own purposes, prosecutors said.
“Molina used these funds for personal non-authorized activities. … The missing funds were not detected until July 2019,” Assistant U.S. Attorney Robert L. Guerra Jr. said, reading from a statement of facts.
Molina admitted to FBI investigators that he had been having financial issues and “undergoing financial hardships at that time,” Guerra said.
As the prosecutor indicated, Molina’s wrongdoing wasn’t discovered until years after the fact — and only after the city initiated an internal fiscal audit after Molina’s February 2019 resignation.
City officials turned the audit findings over to the FBI sometime in early 2020, which prompted the criminal probe into Molina.
In May 2021, the FBI served a subpoena on the city seeking information on Molina, according to then-Commissioner Leonel Benavidez. The following year, in May 2022, a federal grand jury indicted him.
Aside from the criminal charges against him, Molina is currently under a probated suspension issued by the State Bar of Texas stemming from professional ethical complaints filed by his successor.
Anthony Troiani — who, along with his law partner, Mark Sossi — served as the Mercedes city attorney from 2019 through August 2021, filed the bar complaint over Molina’s handling of several other development projects that had drawn scrutiny.
The state bar’s investigatory committee ultimately found the complaint to be credible and issued Molina a three-year probated suspension of his law license.
The state bar found that Molina “failed to keep money owed to the City of Mercedes in (a) trust account separate from (his own) property,” and that, “Upon receiving funds for the City of Mercedes, (Molina) failed to timely disburse money to the City of Mercedes.”
However, according to Troiani, that instance of Molina’s money mismanagement involved a land deal from 2011.
“Those allegations stem from the transactions involving the six acres and the Guadalupe Fujarte case,” Troiani said after the state bar announced the sanctions.
Troiani was referring to a six-acre piece of property in San Juan that Mercedes had acquired through asset forfeiture. The city sought to sell the property and tasked Molina with handling the transaction.
Molina found a buyer in Fujarte, who agreed to buy the land for $65,000, which he paid to Molina.
Molina, in turn, deposited the money into his IOLTA account and failed to turned it over to the city, according to allegations contained in a lawsuit Mercedes currently has pending against Molina.
But that’s not the only lawsuit the city has filed against the man who served as city attorney for 14 years.
Two other lawsuits are pending.
In one, Mercedes alleges that Molina defrauded the city in a real estate deal involving more than 12 acres of land that Mercedes had purchased, in part, using federal funds from the USDA.
In the other, the city alleges that Molina improperly kept the 14 years’ worth of Mercedes’ records he had amassed during his tenure.
Molina declined to comment after pleading guilty Tuesday.
Prosecutors say Molina had already paid restitution prior to the criminal charges against him taking shape.
He is set to be sentenced in June.
