Appellate court reverses dismissal of Godfrey Garza case

Godfrey Garza, the former general manager of Hidalgo County Drainage District No. 1, made more than $3.5 million in commissions on a South Texas border fence project that was largely bankrolled by the U.S. Department of Homeland Security. The county is now suing him, claiming he should not have received a commission on the federal money — and that he should have disclosed that project contractors hired his children's company to work on the project.

An appellate court handed Hidalgo County Drainage District No. 1 a big win in November when it ruled it could continue it’s lawsuit against its former drainage district manager, who is accused of making millions of dollars based on alleged fraudulent claims involving border wall construction funds.

Godfrey Garza Jr., the former drainage district general manager and owner of Integ Corporation, is accused of submitting fraudulent invoices for work his company performed while he was at the helm of the district.

Garza began managing the district as an employee in 1995. But in October 2000, Hidalgo County commissioners, who also fill in as the board of directors for the drainage district, gave Garza the greenlight to allow his company, Integ, to manage the district, while also allowing it to receive outside work through the private sector.

County commissioners alleged in court that Garza purposely circumvented the county auditor and received payments for work that were outside the scope for which his company was hired.

He did so by making sure that Integ’s invoices were submitted for approval under the consent agenda, which is not reviewed by the auditor, the district’s attorneys argued in court.

The lawsuit hit a seemingly dead end Feb. 15, 2018, when Judge Martin Chiuminatto, a visiting judge for the Fifth Administrative Judicial Region, ruled that the district had no case against Garza.

The 13th Court of Appeals reversed that ruling Nov. 21.

“We reverse the trial court’s summary judgment dismissing (the district’s) claims for breach of fiduciary duty, fraud, and for breach of contract,” the appellate court’s memorandum opinion stated.

Former Hidalgo County Judge Ramon Garcia, who spearheaded the lawsuit against Garza, called the partial reversal “a victory for the taxpayers of the county.”

“I have been of the opinion that this fraud did occur, that the county tax dollars had been wasted and that’s why we were pushing to try to recover whatever had been lost,” Garcia said. “It’s taken a while, but as you can see, the case is solid legal ground and I’m hopeful that the present county commissioners court will do everything possible to recover those tax dollars.”

Hidalgo County Judge Richard Cortez said, “The county is now free to pursue any action against any wrongdoer,” but could not comment any further on the case because it’s under litigation.

“The only thing that I can say is that we’re going to pursue any litigation that the county has, to recover anything that it’s lost,” he said.

The appellate court also reversed the dismissal of an $84,000 claim Garza filed against the district, ruling that claim can also proceed in court.

nlopez@themonitor.com