On February 6, 2018, the current and former owners of a small family data collection firm accused of corruption and conspiring to defraud the taxpayers of Hidalgo County out of millions of dollars during the reconstruction of 22 miles of levees with new border fencing along the Rio Grande River were exonerated.
Just days after the sitting visiting judge in the case (Hidalgo County District Court, Hidalgo County Texas, 275th Judicial District, Cause No. C-0373-17-E) remarked in open court that he “wrestled to find enough smoke to suggest that there is a fire some place”, the final claim remaining against Annie Garza, current owner of Valley Data, and her two sons, Jonathan and Godfrey Garza III, the company’s former owners, was dismissed.
The dismissal was of a last-minute claim brought by attorneys for the county against the Garzas and the company under the Racketeer Influenced Corrupt Organization Act (RICO), alleging bribery, mail fraud, wire fraud, money laundering. It was filed just last week as visiting Judge Martin Chiuminatto was ruling in favor of motions for summary judgment in the case, said the Garza’s attorney, John Newton of the Houston-based law firm Roach & Newton.
The District filed suit in January 2017, alleging $5.3 million of illegitimate revenue gained by breach of contract, breach of fiduciary duty, fraud, conspiracy, unjust enrichment and constructive trust against the Garzas and the company. Annie Garza’s husband, Godfrey Garza, Jr. and his company, Iteg Corporation, also were named in the suit. The case against Garza, Jr., former manager of the Hidalgo County’s Drainage District No. 1, is effectively over, as well.
“There was nothing new in the RICO claim,” Newton said, adding that “In a case where there is public scrutiny and national publicity with incendiary allegations, the key is to focus on developing winning legal arguments judges will accept while ignoring the surrounding noise to protect personal financial futures and reputations.”
The county attorney and its then-commissioners openly negotiated a contract with Garza, Jr. to receive 1.5 percent of every construction dollar spent by the drainage district of which he was manager, according to a four-year investigation and court records. The levee-fence in Hidalgo County cost $174 million and was part of a federally-funded project to build 654 miles of barriers between the U.S. and Mexico a decade ago.
