Former District 2 Weslaco City Commissioner John Cuellar pleaded guilty Friday to one count of conspiracy to commit honest services wire fraud in connection with a $38.5 million rehabilitation of Weslaco’s water treatment facilities.
Cuellar pleaded guilty to the sole charge in open court before U.S. District Judge Micaela Alvarez, who is presiding over the joint trial of Cuellar, former Precinct 1 Hidalgo County Commissioner Arturo “A.C.” Cuellar, Weslaco businessman Ricardo “Rick” Quintanilla, and Rio Grande City-area attorney and school board Trustee Daniel J. Garcia.
The conspiracy charge was but one of 61 counts Cuellar faced in the pending trial — part of a 74-count superseding indictment against the four men handed down by a grand jury this April.
With the guilty plea, Cuellar may face up to 20 years in prison, plus up to an additional three years of supervised release, according to details Alvarez explained in court.
He may also face up to a $250,000 fine, and may be made to pay restitution to the city of Weslaco, Alvarez explained.
Cuellar will also have to forfeit monies — or the equivalent in assets and property — which he admits in the plea agreement to having received as a result of his involvement in the bribery scheme. That total comes to $405,000, according to the plea agreement.
Finally, Cuellar will be required to submit a complete financial disclosure to the government within the next 14 days.
Sentencing on the plea is slated for Oct. 22.
In exchange for his guilty plea, federal prosecutors have agreed to recommend dismissing at the time of sentencing the remaining 60 counts Cuellar was facing, as well as to reduce the “offense level” of the lone charge by two levels, the plea agreement reads.
Cuellar’s defense attorney, Ricardo Montalvo, could not be reached for comment Friday.
Messages left with Carlos A. Garcia, attorney for A.C. Cuellar, went unreturned. The two Cuellars are cousins.
And multiple calls to two attorneys from two separate law firms who are representing Quintanilla — Jaime Peña and Robert L. Steindell — yielded only busy signals Friday.
One of the attorneys representing Garcia — Gocha Allen Ramirez — spoke via phone about the new development in the case. “We weren’t given a heads up, but then, you know, of course I don’t expect to be given a heads up on things like that,” Ramirez said.
“I was already aware that Mr. Cuellar, you know, was going into the U.S. Attorney’s office — wasn’t aware for what, but obviously he’s worked out some sort of an agreement with them,” Ramirez said.
Ramirez added that Cuellar’s plea doesn’t affect his client’s case at all, or Garcia’s insistence of his innocence.
According to the superseding indictment, between March 2008 and December 2016 the four co-defendants — along with two other men who have since pleaded guilty to federal programs bribery — conspired to defraud the city of Weslaco through bribery.
The indictment describes Cuellar, an attorney who had spent nearly 20 years on the Weslaco City Commission, as the “ de facto leader of the commission’s majority voting bloc during the vast majority of the charged conspiracy.”
The indictment alleges that Cuellar used his political clout, together with the cooperation of then-District 4 Commissioner Gerardo “Jerry” Tafolla, to maneuver the commission into voting favorably for certain companies, including approving those companies to complete the water plant repairs.
The city hired a firm identified in the indictment as “Company A” to act as construction manager on the rehabilitation projects. Company A — which has since been identified as CDM Smith — was, in turn, responsible for selecting companies to perform the infrastructure work.
CDM ultimately “granted to itself” two of the most costly repair projects — the North Waste Water Treatment Plant and the Water Treatment Plant, the indictment states.
A second company alleged to have been involved in the scheme, San Antonio-based Briones Consulting, eventually reached a $1.9 million settlement with the city, which had filed a civil suit alleging negligence, negligent misrepresentation, fraud and breach of fiduciary duties.
The indictment lists two other companies — Company C and Company D — as being involved in the scheme, as well. Company D is listed as being partly owned by A.C. Cuellar.
Companies B and C allegedly paid Lopez approximately $4.1 million to facilitate bribes to both Cuellars, Quintanilla and Tafolla.
A.C. Cuellar, via Company D, paid $405,000 in $5,000-$7,500 increments disguised as payments for legal services to John Cuellar, the indictment reads.
Garcia is alleged to have also laundered money slated as payments for John Cuellar by depositing checks from Lopez into “interest on lawyer trust accounts” and then writing checks from those accounts to Cuellar. In exchange, the indictment alleges the two Cuellars and Lopez would help a friend of Garcia’s to obtain employment.
The indictment also alleges that Cuellar used his political clout to call special Weslaco commission meetings at times when its minority voting members could not attend in order to facilitate the approval of votes which would benefit the selected companies.
The payments “stopped promptly,” the indictment reads, when John Cuellar lost his bid for re-election in November 2014.
On March 22, now-former Rio Grande City Municipal Judge Leonel Lopez Jr. pleaded guilty to federal programs bribery in connection to the case. Just days later — on March 26 — a grand jury handed down an 18-count indictment against the two Cuellars, Quintanilla and Garcia.
Two weeks after that — on April 8 — Tafolla pleaded guilty to one count of federal programs bribery. The following day, the 74-count superseding indictment against the four other men was unsealed.
WESLACO OFFICIALS REACT
Cuellar lost his re-election bid to current District 2 Weslaco Commissioner Greg Kerr. He, along with District 3 Commissioner Jose “J.P.” Rodriguez, campaigned on a platform of rooting out corruption within the city.
Though he was reticent to speak about Cuellar’s guilty plea Friday, Kerr did offer two brief comments. “It’s important that if people take advantage of the city that they be held accountable,” Kerr said.
“It is good to see that justice is working.”
District 5 City Commissioner Letty Lopez likewise commented about the justice system holding someone accountable. “It’s heartbreaking that it’s come to all of this, but it’s also very rewarding for the citizens of Weslaco that we’re getting to see justice,” she said.
District 6 Commissioner Josh Pedraza said he would need to confer with the city’s legal counsel before offering comment, but did say, “If he’s (Cuellar) pleading guilty, obviously, you know, they had enough on him.”
Calls to District 1 Commissioner Leo Muñoz and Mayor David Suarez went unreturned Friday.
Meanwhile, the city of Weslaco remains embroiled in a $2.4 million civil lawsuit against CDM Smith and a litany of other co-defendants, including Lopez, Quintanilla, A.C. and John Cuellar, as well as: CDM Constructors, Briones Consulting & Engineering, Rolando Briones Jr., and LeFevre Engineering & Management Consulting.
On Friday, both sides in the civil suit filed a joint motion to delay further court proceedings until June 1, 2020.
And last month, Judge Alvarez agreed to delay Tafolla’s sentencing hearing until Jan. 15, 2020. In a similar ruling made just days later, U.S. District Judge Ricardo Hinojosa delayed sentencing for Lopez indefinitely.
Monitor staff writer Berenice Garcia contributed to this report.