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McALLEN — A McAllen man is facing five counts of conspiracy to commit wire fraud in relation to a scheme that allegedly bilked millions of dollars from electricity providers by using stolen identities and fictitious customer accounts.
And prosecutors say Daniel Martinez Rodriguez didn’t act alone. His girlfriend, Aleyda Y. Padilla Moreno, whom he allegedly helped abscond to Mexico, also allegedly participated in the scam.
Martinez Rodriguez appeared for a bond hearing and arraignment on the five charges in McAllen federal court Thursday.
There, prosecutors detailed how they believe he helped his partner and coconspirator escape arrest sometime after federal agents executed a search warrant at a home located on Camellia Avenue in McAllen.
“Our deduction from the circumstances is that these two individuals facilitated her southbound travel,” Assistant U.S. Attorney Eric D. Flores said.
Martinez and Padilla shared the Camellia Avenue home, and it strained credulity to believe that Padilla had been unaware of the law enforcement action that had taken place there, Flores argued before U.S. Magistrate Judge J. Scott Hacker.
“They’re intimately involved. One hand did not act without the other,” Flores said of the couple, whom he described as both business and “intimate” partners.
But neither of them had been at the home on May 29, when investigators executed the warrant and seized evidence, including more than $456,000 in cash.
Instead, on Oct. 3, federal agents intercepted and arrested Martinez as he tried to re-enter the United States at an Eagle Pass port of entry.
Surveillance footage shows Martinez using a pedestrian crossing while similar footage from several days earlier shows him driving a vehicle south into Mexico, FBI Special Agent Ricardo Ale testified.
The vehicle Martinez drove into Mexico is one of three that agents had obtained a warrant to seize, Ale testified, adding that “various locations and individuals were under surveillance.”
And it’s that fact — that Martinez went into Mexico in a vehicle, but crossed back on foot — that prosecutors used to bolster their argument that he had helped Padilla flee and was a flight risk himself.
Prosecutors also argued that, together, Martinez and Padilla can afford to live a lavish lifestyle in Mexico via cash derived from what they say was a massive scheme to defraud electricity providers.
According to the five-page indictment handed up by a grand jury on Sept. 17, Martinez and Padilla took in more than $4 million in payments from an untold number of “clients” between March 2020 and August of this year in what they openly told clients was a “pirated electricity” scheme.
Padilla’s name has been redacted in all but one occurrence in the indictment. However, the name of the company she founded, Quars LLC, was not.
State records show that the registered agent for Quars LLC is Aleyda Y. Padilla Moreno. Records also show that the Texas Comptroller has forfeited Quars’ corporate privileges.
The indictment alleges that Martinez and Padilla used stolen identities, including Social Security numbers, to establish fictitious customer accounts with various electricity providers.
Those providers, in turn, provided electricity at real addresses, but never received payment from the fictitious customers.
Instead, Martinez and Padilla’s “clients” — the residents actually living at those addresses — would pay the couple using “peer to peer applications” such as CashApp and Zelle.
“When an electricity service provider took steps to disconnect the fictitious customer account for non-payment, Defendants would fraudulently induce providers to continue supplying electricity to the customer address,” the indictment reads, in part.
“Among other things, Defendants created new customer accounts under different fictitious identities and switched customer accounts to different electricity service providers,” it further reads.
In addition to the charges, the government is seeking the forfeiture of the nearly half million dollars seized during the May 29 raid, as well as the Camellia Avenue home and two other properties in Mission.
They are also seeking to hold Martinez in custody pending trial, citing their belief that Martinez is hiding assets, as well as his frequent travel to Mexico, in addition to the allegations that he helped Padilla evade arrest.
Flores, the prosecutor, added Martinez may soon face additional charges of aggravated identity theft.
But Martinez’s defense attorney, Octavio M. Rivera Bujosa, countered the allegations, saying that Martinez, who became a naturalized citizen 26 years ago, visits Mexico often to visit family who remain there.
Martinez’s ties to his three adult children, as well as to his successful local businesses, are what’s keeping him here and what brought him back to the U.S. on the day of his arrest, Rivera said.
“You have no idea how successful he is,” Rivera said.
For Ale, the FBI agent, the arguments were unconvincing.
Is it an “accurate statement to say he runs a legitimate business?” Rivera asked Ale on the stand.
“No,” the FBI agent replied without hesitation.
As of Monday afternoon, the magistrate judge had yet to decide on bond, court records show.
“Mr. Martinez participated in receiving illicit proceeds into his bank account then helping to hide (them)” FBI Special Agent Ricardo Ale testified.
