McAllen warehouse used in massive cigarette smuggling scheme forfeited

After a little more than four years of litigation, federal authorities have seized a McAllen warehouse used as a staging ground for an international scheme to smuggle hundreds of millions of contraband cigarettes.

On Wednesday, U.S. Magistrate Judge Nadia S. Medrano signed an agreed order to forfeit the warehouse located at 3901 W. Ursula Ave.

The long drawn out process of forfeiture started in 2020 after authorities with the Texas Department of Public Safety and the Mexican Tax Administration learned 17 million contraband cigarettes in a tractor-trailer at the warehouse were destined for Mexico despite being banned for health reasons. And it wasn’t a “one-off scheme.”

As investigators worked the case, they eventually introduced themselves to Jose Francisco Guerra, the owner Victor M. Guerra Customs Brokers, who was operating out of the warehouse. During the visit, authorities observed 40 cases of unstamped cigarettes in plain sight.

Guerra then told investigators about the scheme, which involved brothers Arturo and Edgar Ruiz.

The brothers live in Mexico and it’s not immediately clear whether they were ever charged. They did, however, agree to the forfeiture through an attorney.

At the time, Guerra told investigators that the Ruiz brothers ordered the contraband cigarettes from China, Vietnam, Panama and the United Arab Emirates. The cigarettes would arrive at the Port of Houston and Guerra would arrange for them to be delivered to the McAllen warehouse where he would prepare them for transport into Mexico.

He said he created “fraudulent sales tickets to avoid paying in-bond securities required by law and help avoid detection at the U.S.-Mexico border by Customs and Border Protection,” the civil forfeiture complaint stated.

In return, Guerra was wired money for his role in the scheme and was allowed to work out of the warehouse free of rent.

In all, federal authorities seized approximately 361,670,000 contraband cigarettes.

Federal authorities also charged Luis Enrique Vazquez de la Cruz and Juan Carlos Teran, both of Mexico, in the case in addition to Guerra. All three men pleaded guilty to smuggling charges.

Vazquez de la Cruz was sentenced to time served in 2021 while Teran was sentenced to a year and one day in jail. Guerra received a year of probation.

As for the Ruiz brothers, federal authorities believe they had been smuggling contraband cigarettes since 2013.

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