Texas developer laundered drug money

By buseman · Jun 18, 2010 ·
  1. buseman
    McALLEN, Texas — A south Texas real estate developer with roots on both sides of the U.S.-Mexico border was secretly a money laundering manager for a drug trafficking cell tied to Mexico's Gulf cartel, federal officials said Thursday.

    Marin Herrera, 56, coordinated bulk cash shipments from drug sales in Atlanta, Chicago and Houston as they made their way back to the border and eventually into Mexico, Internal Revenue Service special agent Luis Reyna testified at a detention hearing Thursday.

    U.S. Magistrate Judge Peter Ormsby denied Herrera's request for bond and ordered that he remain in jail pending trial. Ormsby noted Herrera, his wife and children are Mexican citizens residing legally in Mission.

    But Herrera's four siblings, mother and one daughter still live in Mexico making Herrera a flight risk.

    Herrera was arrested June 9 on conspiracy to possess with intent to distribute cocaine and marijuana and money laundering charges as part of Project Deliverance, targeting the transportation and distribution arms of Mexican drug trafficking rings.

    The Justice Department said the nearly two-year investigation resulted in more than 2,200 arrests nationwide.

    Herrera's attorney, Al Alvarez, said his client intended to plead not guilty to all charges. He said Herrera had no criminal record, had never visited Atlanta or Chicago and never been caught with any drugs or large amounts of cash.

    But federal prosecutor Patricia Profit said someone with Mr. Herrera's significance in the organization does not necessarily have to get his hands dirty.

    IRS Special Agent Luis Reyna testified that financial records showed $2 million in cash was deposited in Herrera's real estate business accounts since 2006, an unusual amount for that sort of business.

    Alvarez said Herrera had many rental properties that were the source of the cash.

    After his arrest, Herrera allegedly told an agent with Immigration and Customs Enforcement, that if he had known a co-defendant in a related case had been arrested earlier that morning, he would have fled to Mexico and not returned, Reyna said.

    Investigators also recorded a phone conversation in February where other alleged members of the organization discussed depositing an amount less than $10,000 in one of Herrera's accounts, which Reyna said reflected efforts to structure small deposits that would not trigger bank reporting requirements for large cash transactions.

    Cash seizures totaling $2.5 million also have been tied to Herrera, including a $1.5 million seizure in Atlanta, Reyna said. Investigators recorded a conversation in which Herrera spoke to someone in Atlanta about the seizure, Reyna said.

    He's more of a manager, Reyna said. He was coordinating the shipment of proceeds from the various cities back down here.

    A seizure in March led to another intercepted phone conversation between Herrera and Reynaldo Flores Jr., an area man who was denied bond in a separate, but related case earlier this week.

    Herrera had said he would give Flores two properties to make up for the seized cash. Two lots were later deeded to Flores, Reyna said. Herrera was indicted in Corpus Christi and is expected to be arraigned and tried there.

    Flores is one of 28 co-defendants in the related McAllen case.

    In addition to a prison sentence that would be a minimum of 10 years under federal sentencing guidelines, prosecutors are trying to seize an 80-lot subdivision Herrera is developing, claiming it is tainted by drug proceeds.

    Prosecutors allege Flores, who previously was sentenced to nearly seven years in prison on a drug trafficking charge, was Herrera's partner in New Millenium Developers.

    Flores' attorney, Jack Wolfe, said Monday his client is a successful businessman who makes between $400,000 and $500,000 from his hay baling business.

    But Ormsby wondered aloud if he was in the wrong business and should consider baling hay.

    The extent of the wealth Mr. Flores has accumulated is surprising, especially considering his recent criminal history, Ormsby said. It suggests there's more than honest work going on here.

    June 17, 2010

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