Federal agents search Edinburg law firm

EDINBURG, TEXAS (ValleyCentral) — Federal agents searched an Edinburg law firm on Thursday.

Agents with Homeland Security Investigations, which is part of U.S. Immigration and Customs Enforcement, searched Palacios Garza & Thompson on Thursday morning.

The law firm, which is located near Canterbury Elementary School in Edinburg, represents a wide array of clients, including local governments.

What, exactly, prompted the search remains unclear.

Ricardo “Ricky” Palacios — a partner at Palacios Garza and Thompson — is part of an influential family in Hidalgo County.

His brother, Joseph Palacios, served on the Hidalgo County Commissioners Court. His uncle, Toribio “Terry” Palacios, is the top prosecutor in Hidalgo County. And his cousin, attorney Ricardo Rodriguez Jr., represents the city of Pharr.

Ricardo Palacios graduated from the Thurgood Marshall School of Law at Texas Southern University, according to information published by the State Bar of Texas.

After passing the bar exam, Ricardo Palacios accepted a job with the Hidalgo County District Attorney’s Office.

Ricardo Palacios founded his own law firm, Palacios & Associates, in 2002, according to information published by Palacios Garza & Thompson. He also represented local governments, including the city of Edinburg.

In 2014, he created a new firm — Palacios Garza & Thompson — with Lucia “Lucy” Thompson, who specializes in family law, and William R. Garza, who specializes in personal injury cases.

The investigation may involve Mitchell Killion, a businessman who Ricardo Palacios represents.

Killion is the registered agent for the Greater Texas Gaming Coalition, which partnered with Edcouch and Elsa to regulate game rooms.

“He was the go-to guy,” said Edcouch City Manager Victor Hugo De La Cruz. “He was the guy that was handling the licensing — or what we call a license, right? They had to go through a background check and pass certain criteria. And he was the one that was in charge of taking care of that.”

The game rooms, which allowed customers to play slot machines, operated in a legal gray area.

While it’s legal to play slot machines, Texas law prohibits game rooms from rewarding winners with cash prizes.

People who play slot machines may only receive “prizes, toys, or novelties, or a representation of value redeemable for those items, that have a wholesale value available from a single play of the game or device of not more than 10 times the amount charged to play the game or device once or $5, whichever is less,” according to the Texas Penal Code.

Many game rooms in the Rio Grande Valley attempt to skirt the law by paying winners in silver-colored pellets. Players take the pellets to nearby silver exchanges, which swap them for cash.

Killion worked with Ricardo Palacios, who wrote rules and regulations for the game rooms, said De La Cruz, the Edcouch city manager.

“He created the ordinance,” De La Cruz said. “And a lot of the verbiage and everything that’s used there was Rick.”

The FBI raided Edcouch City Hall on Oct. 18. Homeland Security Investigations raided Elsa City Hall eight days later.

Documents released by Edcouch and Elsa show agents seized information on game rooms, including permits, applications and financial records, during both raids.

The Greater Texas Gaming Coalition isn’t the only connection between Killion and Ricardo Palacios.

Killion also owns Forged Technology Solutions, which leased printers and other equipment to local businesses.

DMKA LLC, a company based in New York City, sued Forged Technology Solutions in April 2023, claiming that Killion owed DMKA about $134,000.

D&F Industries of Pharr, a local contractor, sued Forged Technology Solutions less than a year later, claiming that Killion promised to provide D&F Industries with three printers but never delivered.

Ricardo Palacios represents Killion and Forged Technology Solutions in both lawsuits.

Palacios and Killion couldn’t immediately be reached for comment Thursday morning.