Antonio Benitez Vergara Seizure Warrant

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Case 3:12-cv-05166-N Document 1-1 Filed 12/18/12 Page 1 of 8 PageID 7 VERIFICATION AFFIDAVIT I, Scott Corage, first being swo, state as follows: AFFIANT'S BACKGROUND 1. I am a Special Agent (SA) with the Department of Homeland Security, Homeland Security Investigations (HSI), and have been so employed for over three (3) years. I am currently assigned to the HSI Dallas Office, and within that office, to the Counter -Proliferation Investigation unit. My duties include the investigation of violations of customs laws, immigration laws, and the laws regulating the possession of firearms by illegal aliens within the United States. I have received specific instruction and training in the investigation of these violations. 2. I make this verification affidavit for and on behalf of the United States of America. The information contained in it is both from my own personal knowledge and derived from other law enforcement officers, employees, and agents, and I believe each and every statement in it to be true. I have read the Complaint for Forfeiture accompanying the affidavit, and the factual matters stated in it are true and correct to the best of my knowledge, information, and belief. PROPERTY FOR FORFEITURE 3. This affidavit is submitted in support of the complaint for forfeiture filed against $2,335,726.00 in U.S. currency seized from Antonio Benitez-Vergara on or about September 17, 2011. LEGAL AUTHORITY FOR FORFEITURE 4. Based on my training and experience, I know 21 U.S.C. § 881(a)(6) states that all monies, negotiable instruments, securities, or other things of value fuished or intended to be fuished by any person in exchange for a controlled substance in violation of Chapter 13, Subchapter I of Title 21, United States Code, shall be subject to seizure and forfeiture. Based on the facts set out in this affidavit, I believe the property described in paragraph 3 is subject to forfeiture pursuant to U.S.C. § 881(a)(6). 5. Based on my training and experience, I know that 31 U.S.C. § 5313 and other regulations require any financial institution that engages with a customer in a currency transaction (i.e., a deposit or withdrawal) in excess of $10,000.00 to report the transaction to FINCEN on FINCEN Form 104, Currency Transaction 1

Transcript of Antonio Benitez Vergara Seizure Warrant

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VERIFICATION AFFIDAVIT

I, Scott Corage, first being sworn, state as follows:

AFFIANT'S BACKGROUND

1. I am a Special Agent (SA) with the Department of Homeland Security, Homeland Security Investigations (HSI), and have been so employed for over three (3) years. I am currently assigned to the HSI Dallas Office, and within that office, to the Counter -Proliferation Investigation unit. My duties include the investigation of violations of customs laws, immigration laws, and the laws regulating the possession of firearms by illegal aliens within the United States. I have received specific instruction and training in the investigation of these violations.

2. I make this verification affidavit for and on behalf of the United States of America. The information contained in it is both from my own personal knowledge and derived from other law enforcement officers, employees, and agents, and I believe each and every statement in it to be true. I have read the Complaint for Forfeiture accompanying the affidavit, and the factual matters stated in it are true and correct to the best of my knowledge, information, and belief.

PROPERTY FOR FORFEITURE

3. This affidavit is submitted in support of the complaint for forfeiture filed against $2,335,726.00 in U.S. currency seized from Antonio Benitez-Vergara on or about September 17, 2011.

LEGAL AUTHORITY FOR FORFEITURE

4. Based on my training and experience, I know 21 U.S.C. § 881(a)(6) states that all monies, negotiable instruments, securities, or other things of value furnished or intended to be furnished by any person in exchange for a controlled substance in violation of Chapter 13, Subchapter I of Title 21, United States Code, shall be subject to seizure and forfeiture. Based on the facts set out in this affidavit, I believe the property described in paragraph 3 is subject to forfeiture pursuant to U.S.C. § 881(a)(6).

5. Based on my training and experience, I know that 31 U.S.C. § 5313 and other regulations require any financial institution that engages with a customer in a currency transaction (i.e., a deposit or withdrawal) in excess of $10,000.00 to report the transaction to FINCEN on FINCEN Form 104, Currency Transaction

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Report (CTR). Based on my training and experience, I know that CTRs are often used by law enforcement to uncover a wide variety of illegal activities, including narcotics trafficking and money laundering. Many individuals involved in these illegal activities are aware of such reporting requirements and take active steps to cause financial institutions to fail to file CTRs, including structuring. Structuring is defined in the Code of Federal Regulations:

[A] person structures a transaction if that person, acting alone, or in conjunction with, or on behalf of, other persons, conducts or attempts to conduct one or more transactions in currency, in any amount, at one or more financial institutions, on one or more days, in any manner, for the purpose of evading the reporting requirements under section 103.22 of this part. 'In any manner' includes, but is not limited to, the breaking down of a single sum of currency exceeding $10,000.00 into smaller sums, including sums at or below $10,000.00, or the conduct of a transaction, or series of currency transactions, including transactions at or below $10,000.00. The transaction or transactions need not exceed the $10,000.00 reporting threshold at any single financial institution on any single day in order to constitute structuring within the meaning of this definition.

6. Based on my training and experience, I know that 31 U.S.C. § 5324(a)(3) criminalizes structuring and, in order to establish a structuring violation, the government must prove that a person structured or assisted in structuring, or attempted to structure or assist in structuring, any transaction with one or more domestic financial institutions for the purposes of evading the reporting requirements of § 5313(a) or any regulation prescribed under any such section.

FACTS SUPPORTING FORFEITURE

Detention of Benitez-Vergara and Seizure of Cash

7. On September 17, 2011, at approximately 6:40 a.m., Immigration and Customs Enforcement (ICE) Enforcement Removal Operations (ERO) officers and Dallas Police Department (DPD) officers went to the residence located at 9318 Fireside Dr., Dallas, Texas; ERO officers had received information that a previously-deported aggravated felon, Antonio Benitez-Vergara, was residing at the location. After the ERO and DPD officers knocked on the residence's door, Leticia Ornelas (Benitez-Vegara's common-law wife) answered. She stated that she was the only adult at the residence (two minor children were present) and consented to the officers' searching the residence for other people. The officers entered the residence and conducted the search. An ERO officer encountered Benitez-Vergara as he exited the master bedroom.

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8. While the residence was being searched for people, a DPD officer saw a pistol box in a bedroom closet. An ERO officer asked Benitez-Vergara and Ornelas if there were weapons at the residence, explaining it was illegal for Benitez-Vergara to possess a firearm. Benitez-Vergara said that there was a firearm in the master bedroom and nodded to Ornelas; Ornelas then took officers into the bedroom and pointed to a rifle on top of a clothing dresser hutch. The rifle was a Norinco MAK90 rifle with a thirty-round magazine and one round loaded in the chamber. The rifle was seized by officers.

9. After Benitez-Vergara was advised of his Miranda rights (in Spanish) by an ERO officer, Benitez-Vergara said he understood his rights and agreed to speak to officers. About that same time, Ornelas and her four-year-old son led officers to the master bedroom and pointed out a dresser drawer containing a Taurus 9 mm pistol, a Beretta .3 80 caliber pistol, a Colt .45 caliber pistol, and ammunition. Officers in the living room saw a .22 caliber Marlin rifle lying on top of an entertainment center in plain view.

10. After the discovery of the firearms, HSI SA David Deal arrived at the residence and asked Ornelas and Benitez-Vergara for their consent to search the residence for more firearms. Ornelas and Benitez-Vergara did not give permission for the search, so the residence was secured and SA Deal obtained a federal search warrant for the residence. The warrant was executed that afternoon, and four pistols and two rifles (including the three pistols and one rifle already observed) and 786 rounds of ammunition were discovered and seized; all the firearms were unsecured and loaded, and five had rounds chambered.

11. During the warrant's execution, two safes were discovered in the closet of the residence's home office. After SA Deal asked Benitez-Vergara if he had keys to the safes, Benitez-Vergara led SA Deal to the master bedroom and pointed to the top left drawer of the entertainment center; SA Deal found the key to the first safe in that drawer. SA Deal later found the other safe's key on a key ring set located in the door lock for the master bedroom. SA Deal discovered approximately $2,299,152.00 in U.S. currency packaged in stacks inside the two safes. One stack of currency was wrapped in black electrical tape, and the remaining currency was packaged in vacuum-sealed bags. Four flat stacks of currency were inside each sealed bag, and the stacks were secured with rubber bands at both ends. Some of the bags had handwriting (black ink), including numbers, on them. The currency was arranged in a manner consistent with how narcotics traffickers arrange and package drug proceeds for concealment and/or transport. After the money was discovered in the safes, Benitez-Vergara was interviewed (in Spanish) by another HSI SA and claimed ownership of the money. A photograph of some of the currency discovered in the safes is attached to this affidavit as Exhibit 1.

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12. In addition to the currency found inside the safes, additional amounts of U.S. currency were discovered inside the residence - $527.00 in the living room, $134.00 in the master bedroom, $8,690.00 in Benitez-Vergara's possession; and $3,250.00 and $24,500.00 in the master bedroom. The total currency found inside the residence consisted of the following denominations:

1. $100.00 X 23321 = $2,332,100.00 11. $50.00 X 60 $3,000.000

111. $20.00 X 28 = $560.00

IV. $10.00 X 2 = $20.00 v. $5.00 X 6 $30.00

VI. $1.00 X 16 = $16.00

A photograph of the currency (unpackaged and "loose") is attached to this affidavit as Exhibit 2.

13. Following discovery of the vacuum-sealed currency, DPD and Rockwall County Sheriff K-9 officers and their dogs conducted systematic searches of the residence. The three dogs gave positive alerts indicating the presence of the odor of a controlled substance concerning the safes and the currency found in them. In addition, dogs gave positive alerts indicating the presence of the odor of a controlled substance on a "cubby hole" underneath the master bathroom's bathtub accessed by removing a tile adjacent to the tub.

14. Benitez-Vergara was determined to be a citizen of Mexico and illegally present in the U.S., and he was placed in immigration removal proceedings. Additionally, Ornelas was determined to be a citizen of Mexico and illegally present in the U.S., and she was taken into custody by ICE ERO and placed in immigration removal proceedings. Ornelas was subsequently deported to Mexico.

15. Benitez-Vergara had been previously convicted for aggravated possession of heroin with intent to deliver. As a result of the September 1 ih search, Benitez­Vergara was indicted in the Northern District of Texas (3:11-CR- 299-B) for illegal re-entry and illegally possessing a firearm (as a felon and as an illegal alien). He pleaded guilty to the 8 U.S.C. § 1326 violation and the 18 U.S.C. § 922(g)(5) violation and is scheduled to be sentenced on January 31, 2013. Benitez-Vergara had moved to suppress the firearms and other contraband obtained during the warrantless search and following the issuance of the warrant, but the motion was denied.

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Subsequent Investigation

16. Following Benitez's arrest and the seizure of the cash from his residence, HSI and IRS-CI SAs interviewed Annabel Echazarreta at 1005 W. Jefferson Blvd. Suite 308, Dallas, Texas on November 10, 2011. Echazarreta had prepared tax returns for Rhino's Car Company, the business purportedly run by Benitez­Vergara and his sister Adelfa Benitez since 2003, as well as Benitez-Vergara's personal tax returns since 2006. Echazarreta told the agents the following:

a. She has been preparing tax returns for approximately fifteen years, was formerly a certified public accountant in Mexico, but does not have any certification in the U.S.

b. Her duties with Rhino's had been to prepare the company's IRS Form 941s (employer's payroll tax returns), monthly state sales tax returns, and the IRS Form 1120s (corporation income tax returns). Each month, Adelfa Benitez, Benitez-Vergara or Ornelas sent her the sales reports for the previous month, which she used to prepare the monthly sales tax reports for the state and the gross receipts figures for the annual IRS Form 1120 returns.

c. She knew Adelfa Benitez to be the sole shareholder in Rhino's and Benitez­Vergara to be the president and director of the company running the everyday lot operations.

d. Benitez began working at Rhino's in 2006 and was primarily responsible for the internal bookkeeping.

e. Benitez opened a beauty shop several years ago and spends the majority of her time there.

f. Several years ago she noticed there was a large infusion of money into Rhino's. Benitez-Vergara and Benitez told her that there was a cash flow problem in the business and that they had loaned money to the company. Echazarreta then explained to them that the loan needed to be documented in the company's balance sheets because a financial trail for this money would be necessary in the event of an audit.

g. She then set up a loan from shareholder liability on the corporate balance sheet for the amount that had been loaned to the company. No checks had been written concerning the loan, so cash had to have been infused into the company. The liability has been reduced and increased several times over the years.

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h. Rhino's continues to have cash flow problems, and the majority of the company's profits are tied up in accounts receivable. Rhino's accounts receivable are high because the majority of the cars Rhino's sells are financed by Rhino's.

1. It is not likely Rhino's could have a significant amount of surplus cash on hand. Based on the records, the cash flow of the business had been and continues to be a problem. It is inconceivable that Rhino's would have a large amount of cash not reflected in the books and records.

J. She has prepared Benitez-Vergara's and Benitez's personal tax returns since 2006. It is her understanding that their sole source of income was W-2 wages from Rhino's.

k. Benitez told her that Bank of America had closed their (Benitez-Vergara's and Benitez's) accounts because they were depositing cash and causing the bank to file reports. Benitez told her they (Benitez-Vergara and Adelfa Benitez) never deposited more than $10,000.00 into the accounts at one time.

1. Rhino's did not have the means to accumulate a large amount of cash above and beyond what was deposited into its bank accounts.

17. IRS-CI and HSI SAs interviewed Echazarreta again on January 17, 2012. Agents asked her to elaborate on the cash flow issues (Rhino's) discussed during the previous interview. Echazarreta gave the agents cash flow documents and the cash account register concerning Rhino's for the years for which she prepared returns and financial statements. She told the agents the following:

a. It is not possible, based on the records she had received and the cash flow statements she had prepared, that Rhino's cash flow was increasing from year to year and that, by 2010, its total available cash was approximately $6,000,000.000.

b. Benitez-Vergara told her that, due to cash flow problems, he, Ornelas, and Benitez had lent the company money (cash) to add inventory, and this cash was used to purchase vehicles from the auto auctions.

c. If there was available cash, it was taken out of the business and a credit entry made to the cash account and a debit to the notes payable account.

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d. Rhino's was making money, but much of its profit was tied up in accounts receivables. The company continuously struggled with cash flow issues.

Related Criminal Activity

1 8. Shortly before the execution of the search warrant on September 17, 2011, Bank of America (BOA) closed the two bank accounts used by Rhino's (with account numbers ending in 0530 and 8390, respectively). BOA closed the accounts based on a pattern of deposits indicative of structuring to avoid the bank's reporting requirements. Attachment 3 to this affidavit is a listing of the cash deposits into Rhino's accounts at BOA from April 1, 2010 to August 25, 2011.

19. After BOA closed Rhino's accounts, Benitez opened and operated a business account (ending in 7101) for Rhino's at Prosperity Bank in Balch Springs. Attachment 4 to this affidavit is a listing of the cash deposits into Rhino's account at Prosperity Bank from September 2, 2011 to April30, 2012.

20. After Benitez-Vergara's arrest, IRS-CI agents interviewed bank personnel at BOA. BOA personnel identified Ornelas and Benitez from driver's license photos and stated that Ornelas and Benitez made the majority of the deposits into the two Rhino accounts (with account numbers ending in 0530 and 8390, respectively). One BOA teller specifically recalled that the majority of the deposits were just below the $10,000 reporting threshold and specifically recalled an occasion when Ornelas made a deposit exceeding $10,000 and became defensive when asked for identification. Another BOA teller recalled an occasion when Ornelas tried to deposit $10,100.00; when told she would need to provide identification for that deposit, Ornelas reduced the deposit to $10,000. Another BOA teller stated that the cash deposited by Ornelas and Benitez always smelled like laundry detergent. She recalled asking Ornelas about the smell and Leticia responded that the Rhino's office had a roof leak that caused the smell. The BOA tellers identified Ornelas as the person who primarily had made the cash deposits for Rhino's at BOA.

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CONCLUSION

21. Based on my training, experience, and the information set out in the preceding paragraphs, the property described in paragraph 3 is proceeds from violations of 21 U.S.C. § 841 and/or 846; was used or intended to be used to facilitate violations of 21 U.S.C. § 841 and/or 846; was involved in money laundering (a violation or violations of 18 U.S.C. § 1956); and/or is traceable to property involved in structuring (a violation of 31 U.S.C. § 5324). It is therefore subject to seizure and forfeiture pursuant to 21 U.S.C. § 881(a), 18 U.S.C. § 981(a)(1)(A), and/or 31 U.S.C § 5317(c).

�<11-:n..:vW-Notary Public, State of Texas

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Cora Special Agent Homeland Security Investigations