Brothers plead not guilty in Arroyo Terminals case

BROWNSVILLE, Texas (ValleyCentral) — Two brothers charged in the Arroyo Terminals case pleaded not guilty Tuesday.

Maxwell Sterling Jensen, who co-owns Arroyo Terminals, and Zachary Golden Jensen, who handled marketing and business development for the company, pleaded not guilty Tuesday afternoon.

Attorney Robert Louis Guerra of Brownsville, who represents Maxwell, declined to comment after the arraignment.

“We’re just going to let the process play out,” Guerra said.

A grand jury indicted four members of the Jensen family — Maxwell, his brother Zachary, his father James and his mother Kelly — on April 17.

They’re accused of participating in a conspiracy to buy stolen crude oil from businesses affiliated with Mexican drug cartels and launder millions in dirty money.

The indictment remained sealed until April 23, when the government raided Arroyo Terminals in Rio Hondo.

Agents with the U.S. Drug Enforcement Administration, the FBI, the Criminal Investigations division of the IRS and Homeland Security Investigations, which is part of U.S. Immigration and Customs Enforcement, participated in the investigation.

They arrested Zachary and Maxwell, who spent the weekend in jail.

The U.S. Marshals Service, meanwhile, raided the family’s 33,000-square-foot mansion in Sandy, Utah.

During the raid, they arrested James Lael Jensen, who co-owned Arroyo Terminals, and his wife, Kelly Anne Jensen.

“They were unwilling to come out,” Assistant U.S. Attorney Michael Hess said during a hearing on April 24, according to an audio recording released by the Clerk’s Office for the District of Utah.

That forced the Marshals Service to break down the door, Hess said.

“Mr. Jensen and Mrs. Jensen’s story about that is very different,” said attorney John Huber of Salt Lake City, who represents James Jensen.

James agreed to open the door, Huber said, but the Marshals Service broke it down anyway.

Huber asked the judge to release James while he awaits trial.

“They’re active in their church. They’re active in their community. They come from a stalwart Utah family,” Huber said. “His in-laws have served in public service for decades and they don’t want to throw that all out of the window.”

Kelly Jensen’s father, Gordon Walker, served in the U.S. Department of Housing and Urban Development during President Ronald Reagan’s administration. Her mother, Carlene Walker, served in the Utah State Senate.

Dustin B. Pead, the chief magistrate judge for the District of Utah, released James and Kelly Jensen without setting a bond.

“I’m counting on what your attorneys have said here today,” Pead said. “That you are the upstanding people that your attorneys state that you are.”

Wednesday, however, wasn’t the first time James Jensen had been accused of buying stolen petroleum products.

PEMEX Exploration and Production, which is part of the Mexican government, filed a lawsuit against Jensen in 2011.

In the lawsuit, PEMEX claimed Jensen and two corporations he controlled, Big Star Gathering and St. James Oil, had purchased stolen natural gas condensate.

“At times, Jensen would travel to Mexico to arrange purchases from the cartels who had stolen the condensate,” according to the lawsuit.

Jensen denied any wrongdoing, but he admitted Big Star had business dealings with an oil company executive who sold the stolen natural gas condensate.

All the transactions happened before the oil company executive pleaded guilty, according to an affidavit filed in the lawsuit.

Attorneys for Jensen’s company, St. James Oil, urged a judge to dismiss the case.

“St. James’s business reputation and creditworthiness suffer every day that it continues to be named in a lawsuit alleging participation in a drug cartel-related conspiracy,” according to a motion filed in the case.

After two years of litigation, PEMEX dropped the case against Jensen in 2013.

Maxwell and Zachary returned to court Tuesday wearing orange jail uniforms and silver handcuffs. Their grandfather, Gordon, and their brother, Tyler, watched from the gallery.

Assistant U.S. Attorney Laura Garcia, who is prosecuting the case, asked U.S. Magistrate Judge Ignacio Torteya III to hold Maxwell without bond.

Maxwell worked closely with “cartel-affiliated” businesses, Garcia said, and developed connections in Mexico.

He also frequently travels to the Bahamas, where the Jensen family owns a home, Garcia said, and maintains bank accounts.

Guerra, the attorney who represents Maxwell, said his client is a hardworking father of five.

Just like his parents, Maxwell should be released, Guerra said, and would accept any conditions requested by the judge.

Torteya, though, ordered Maxwell held without bond.

“The court is concerned,” Torteya said, about inconsistent information Maxwell provided about his travel to the Bahamas and his use of marijuana.

Torteya set bond for Zachary at $100,000 with a $10,000 cash deposit.

While on bond, Zachary must remain at home in Utah and submit to GPS monitoring.

If convicted on the most serious charge against them, the Jensens face a maximum of 20 years in federal prison.