Brownsville man convicted in ‘violent’ transmigrante price-fixing scheme

A 47-year-old Brownsville man on Tuesday pleaded guilty to his role in what federal prosecutors describe as “a long-running and violent conspiracy which involved price fixing, extortion and money laundering.”

The United States Attorney’s Office for the Southern District of Texas announced in a news release that Jose de Jesus Tapia Fernandez pleaded guilty to conspiracy to commit money laundering.

“He joins seven others who have entered guilty pleas for their various roles in a scheme to monopolize the transmigrante forwarding agency industry in the Los Indios border region near Harlingen and Brownsville,” the release stated.

The leader of the conspiracy — 38-year-old Mission resident Carlos Martinez — previously admitted to conspiracy to fix prices, a count of conspiracy to monopolize the market, interference with commerce by extortion, conspiracy to interfere with commerce by extortion and conspiracy to commit money laundering, according to the release.

“Transmigrantes are individuals who transport used vehicles and other goods from the United States through Mexico for resale in Central America,” the release stated. “Transmigrante forwarding agencies are U.S.-based businesses that provide services to transmigrante clients, including helping those clients complete the Mexican customs paperwork required to export vehicles into Mexico.”

The group fixed prices to monopolize the market for the forwarding agency services by requiring participants to pay into a “pool.” Then, they divided the revenues among themselves, according to the release.

“Market participants who were not part of the conspiracy had to join and pay into the Pool,” the release said. “Pool members enforced the rules by monitoring whether forwarding agencies were charging the agreed-upon prices, including by posting prices publicly on social media and monitoring whether agencies were paying into the Pool as required.”

Some in the scheme also conspired to force forwarding agencies to pay other extortion fees, including a “piso” for each transaction and fines for operating outside of the pool rules.

“Conspirators perpetrated acts of intimidation, coercion and violence in furtherance of the antitrust and extortion conspiracies,” the release stated. “Martinez was responsible for at least $9,500,000 in extortion payments.”

Both Martinez and Tapia Fernandez then laundered the extortion proceeds, according to the release.

Others who have pleaded guilty include Pedro Antonio Calvillo Hernandez, 51, of Mission; Roberto Garcia Villareal, 60, of San Benito; Sandra Guerra Medina, 70, of Rancho Viejo; and Mireya Miranda, 58, of La Feria, who all pleaded guilty to a count of conspiracy to fix prices and a count of conspiracy to monopolize the same market.

Calvillo, Villareal and Carlos Yzaguirre, 61, of Mission, also pleaded guilty to conspiracy to interfere with commerce by extortion. Juan Hector Ramirez Avila, 35, of Brownsville, meanwhile, pleaded guilty to a count of structuring a financial transaction to evade reporting requirements.

Homeland Security Investigations special agents are seeking three others charged in the case — Rigoberto Brown, 40, of Brownsville; Miguel Hipolito Caballero Aupart, 72, of Brownsville; and Diego Ceballos-Soto, 50, of Mexico.

“Anyone with information about their whereabouts is asked to contact HSI at 1-866-DHS-2-ICE (I-866-347-2423),” the release stated.

Nicholas J. Ganjei, U.S. Attorney for the Southern District of Texas, said price fixing harms the public and business communities and artificially drives up prices, forcing consumers to pay more than they normally would.

“At its core, such market collusion is nothing more than theft from consumers,” Ganjei said in the release.

Emma Burnham, director of Criminal Enforcement for the Justice Department’s Antitrust Division, said the agency will use every tool at its disposal to stop those who aim to corrupt the free market.

“These guilty please bring to justice individuals who used violence and extortion to fix prices and monopolize the market for essential services that Americans rely on to earn a living,” Burnham said in the release.

Craig Larrabee, special agent in charge of HSI San Antonio, said federal authorities will relentlessly pursue transnational criminal organizations that exploit trade and the U.S. economy.

“This violent scheme was fueled by greed that undermined the safety and economic security of the border region; HSI has prioritized significant resources to protect the U.S. and our legitimate trade,” Larrabee said in the release.

Chad Yarbrough, assistant director of the FBI Criminal Investigative Division, said the defendants used threats, violence, fear and intimidation to eliminate competition.

“Their guilty pleas send a clear message that price fixing and market allocation are serious crimes, and we will hold those accountable who put profits over the law and fair commerce,” Yarbrough said in the release.

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