Juan Jose “J.J.” Garza, former director of the La Joya Housing Authority, and Armando Jimenez, a Mexican national, pleaded guilty to wire fraud in May 2017. On Wednesday at the federal courthouse in McAllen, U.S. District Judge Ricardo Hinojosa sentenced Garza and Jimenez to 37 months and 18 months, respectively, in federal prison for conspiracy to commit wire fraud through a bid-rigging scheme between July 2012 to May 2013.
The two men were arrested in September 2016.
In an eight-count indictment, federal prosecutors alleged Garza and Jimenez engaged in various bid-rigging construction contracts with the Alamo and Donna Housing Authorities for about a year. Together they would submit false high-bids, guaranteeing that Jimenez’s company, Jimenez Construction, would be the lowest bidder, assuring him the contract. In total, they defrauded the U.S. Department of Housing and Urban Development $44,794.
Garza, who was the former executive director for La Joya Housing Authority between 1999 and 2016, wanted to tap into the construction business using Jimenez as a front, where Jimenez would receive the contracts and then turn around and subcontract Garza.
It is believed that the two met at Stilettos Gentlemen’s Club, where Jimenez worked as a cook. Garza befriended Jimenez and offered an opportunity to make more money. According to Jimenez’s attorney Marcos de Luna, Garza used Jimenez gullibility. De Luna argued, “They took advantage of a naive person,” he said. “They took advantage of a cook at Stilettos.” On Wednesday, U.S. District Judge Hinojosa took a calmer approach towards Jimenez, rather than Garza. “I realize you got caught in the situation,” the judge said to Jimenez. However, due to Jimenez non-citizen status, he will face deportation proceedings following his 18-month sentence.
In contrast, Judge Hinojosa ruled with a different tone against Garza as he stated Garza had abused his position of trust to facilitate the wire fraud scheme, noting that “the public trusts people in public office to do the right thing,” and “that trust was broken.”
Garza simultaneously served as a La Joya ISD school board member from November 2012 until he resigned in April 2017, amid federal charges against him. During his tenure, as both the executive director of La Joya Housing Authority and a La Joya ISD school board member, the FBI raided the housing authority in December 2013. No arrests were made and the incident was quickly dismissed by the community, who re-elected Garza in November 2014.
Three months after his indictment, he was fired from La Joya Housing Authority in December 2016. In April 2017, he resigned his position as La Joya ISD school board member. And on May 3, 2017 he pleaded guilty to wire fraud.
Garza’s response to the verdict:, “I should have known better.”
Garza and Jimenez were allowed to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility at a time and location to be determined. After completing their prison sentences, Garza will serve two years of supervised release, while Jimenez is expected to face deportation.