Ex-Tamaulipas Governor Charged With Gulf Cartel and Zetas Involvement Likely To Plead Guilty This Week

"MX" for Borderland Beat

Note: For an in-depth coverage of Tomas Yarrington's international money laundering operation, please read this exclusive Borderland Beat report.

Yarrington was born in Matamoros, Tamaulipas, the bastion of the Gulf Cartel. He was served as Mayor of Matamoros from 1993 to 1995, before he ran for Governor of Tamaulipas.

Tomas Yarrington Ruvalcaba, who was Governor of Tamaulipas from 1999 to 2005, is accused of protecting the Gulf Cartel and Los Zetas by taking millions in bribes. This money was laundered through a complex international financial operation involving dozens of strawpeople and businesses.

His new hearing is set for Thursday, May 25, 2021, in Houston, Texas. The prosecution expects him to plead guilty under a "re-arraingement", which means that he will face new charges of a lesser degree in exchange for pleading guilty.

Yarrington became an international fugitive in August 2012, when he was added on the Interpol's most-wanted list. In April 2017, he was arrested in Florence, Italy, and extradited to the U.S. the following year. His trial has been pushed numerous times since then.

Most of the documents in the investigation remain sealed. But U.S. officials confirmed that there are at least 15,000 digital documents consisting of 100,000 pages detailing his criminal endeavors at least since 1998, when he ran for governor and took bribes from the Gulf Cartel and Los Zetas.

The case was described as extensive and voluminous.

Note: Below is an article published by The Monitor over the weekend. This McAllen, Texas, newspaper has covered Yarrington's case extensively for nearly a decade.

History of accusations

On a sunny Monday morning nearly three years ago, a helicopter zoomed over Linear Park in Brownsville and then over the Reynaldo G. Garza & Filemon B. Vela federal courthouse.

As the helicopter began circling the area, a caravan of marked and unmarked law enforcement vehicles drove south on East Sixth Street with focused determination before taking a left on East Jackson Street and then a left onto East Seventh Street, where half of the vehicles stopped, blocking traffic.

U.S. Marshals armed with long guns exited the vehicle and began securing the intersection as a small scrum of local Brownsville reporters looked on from a corner behind the courthouse.

The remaining vehicles rushed into the back loading bay of the courthouse with a high-profile suspect — a former Mexican politician accused of drug trafficking and money laundering who had disappeared six years earlier.

This happened on April 23, 2018. The previous Friday, April 21, 2018, news leaked to the news media that authorities had caught up with former Tamaulipas governor and former Matamoros Mayor Tomás Yarrington in Italy, where he had been traveling under an assumed name with a false passport.

He had actually been taken into custody a year prior, but that wasn’t public information until the United States successfully extradited him.

Yarrington faces a slew of charges levied in a 53-page indictment that accuses him of taking millions of dollars in bribes from the Gulf Cartel as far back as 1998, as well as coordinating multi-ton shipments of cocaine for that criminal organization and the Beltrán Leyva Cartel.

The former Tamaulipas governor is also accused of stealing tens of millions of pesos from Mexican taxpayers and creating an elaborate system of shell companies used to launder illegal proceeds.

Alleged fake identification documents the government filed in a motion titled, “Notice to introduce extraneous offenses.” (source: The Monitor)

His co-defendant, Alejandro Cano Martinez, is charged in the indictment and federal authorities accuse him of taking out millions of dollars in fraudulent loans in U.S. banks for those shell companies that were funneled to bank accounts in Mexico and then back into the United States.

Those shell companies were involved in high-profile real estate developments in Texas, including the La Cantera development in San Antonio.

Cano remains a fugitive.

Yarrington’s extradition brought a flurry of activity in the case that had remained dormant since 2012 — the year Yarrington disappeared after learning of the warrant for his arrest.

But after the cameras and reporters moved onto the other stories, the proceedings against Yarrington continued and they were largely secret with years of sealed events and sealed orders from Senior U.S. District Judge Hilda Tagle.

Then, on Wednesday, that all changed with a court entry: Yarrington is scheduled for re-arraignment next Thursday.

The Monitor this week spoke with two defense attorneys who practice in federal court, and who both indicated a re-arraignment hearing indicates Yarrington will plead guilty. What he will plead guilty to is unknown at this point and won’t be revealed until the hearing, but he has likely reached a deal with the government.

He faces eight charges in total, including RICO conspiracy, conspiracy to import cocaine and marijuana, conspiracy to launder monetary instruments, conspiracy to make false statements to financial institutions, conspiracy to commit bank fraud, conspiracy to structure transactions to avoid reporting requirements and two counts of aiding and abetting bank fraud.

The 53-page indictment alleges Yarrington’s criminal activity began in 1998 when he was a candidate for the governor of Tamaulipas and began taking bribes from the Gulf Cartel.

The U.S. Attorney’s Office alleges that those bribes, which totaled in the millions of dollars, continued through his six years in office while the Gulf Cartel illegally imported and distributed multi-ton quantities of cocaine and marijuana into the United States.

Authorities allege that Yarrington used those bribes to purchase numerous pieces of real estate, including a $450,000 luxury condo on South Padre Island and a $230,000 piece of waterfront property in Port Isabel.

After Yarrington left office, federal prosecutors say his alleged criminal behavior not only continued, it escalated.

Between 2007 and 2009, authorities say Yarrington became more directly involved with trafficking multi-ton quantities of cocaine.

“Tomas Yarrington Ruvalcaba agreed with representatives of the Gulf Cartel and the Beltran Leyva Cartel to arrange for unimpeded access for large cocaine loads to the Port of Veracruz, Mexico, in exchange for a percentage of each load. Pursuant to this agreement large quantities of cocaine were brought into Mexico via boat from trans-shipment into the United States,” according to the indictment.

Then there’s the alleged public theft.

Former Mexican governor Tomas Yarrington Ruvalcaba of the state of Taumalipas arrives at Brownsville South Padre Island International Airport as Yarrington is taken by U.S. federal agents Friday, Apr. 20, 2018, in a U.S. Customs and Border Protection helicopter after Yarrington was captured in 2017 in Italy by Interpol authorities and has been extradited from Italy to Texas to face federal charges including drug trafficking and money laundering. (Miguel Roberts/The Brownsville Herald via AP)

Federal prosecutors say that in late 2004 a conspirator who held high elected office in Nuevo Laredo arranged the theft of $60 million pesos of public funds that were turned over to Yarrington who in turn entrusted them to a wealthy criminal.

A portion of those funds were then distributed to other people to disguise Yarrington’s control over the funds, according to the indictment.

Authorities say a conspirator who worked in Yarrington’s administration directed the disposition of the stolen funds.

The former governor is accused of using $300,000 of those public funds to purchase a Sabreliner 60 airplane that was used exclusively by him and other members of the alleged conspiracy. He’s also accused of directing that $5 million of the stolen pesos be made available to Cano, his co-defendant.

The indictment also alleges a complex scheme of international bank fraud with conspirators incorporating limited partnerships and limited liability companies under Texas law to establish business fronts to disguise the proceeds of illegal activity, which Cano allegedly used to apply for fraudulent loans.

Federal prosecutors say he used one of the fronts to apply for a $2.75 million loan from a McAllen bank that was used to purchase a 2005 Pilatus airplane.

In 2005, another conspirator incorporated a Pesquera Investments LP and opened a bank account where another conspirator wired $406,387, according to the indictment.

Later that year, Pesquera, through a conspirator, received a $2.85 million loan for real estate development in Cameron County.

That loan was guaranteed by Cano and it went into default and was written off as bad debt in May 2009, with an outstanding balance of $2,083,133, authorities say.

Cano is also accused of guaranteeing loans for SPI Ling Martin Townhome Project, and SPI Development Partners, which applied for a $610,000 loan from a McAllen bank and a $3.05 million loan from a Pharr bank for real estate development on South Padre Island.

“In December, 2005, a conspirator caused the formation of Cantera-Parkway Development Partners of SA, LP (‘Cantera’), and SA Cantera Development Partners LLC (‘SA Canters’), which became the general partner of Cantera. In February, 2006, through a conspirator, Cantera applied for a received a loan in the approximate amount of $6,650,000.00 from First National Bank, whose principal officers are in Hidalgo County, Texas,” the indictment stated.

The funds were used to purchase 46 acres in Bexar County and were guaranteed by Cano, authorities say.

And the alleged fraudulent loans continued.

In June, 2006, federal prosecutors say a conspirator formed Culebra 179 Acre Residential Development and received a $3.26 million loan from a Laredo bank. And in August of that year, a conspirator formed Culebra SA 104 Acres Residential Partnership and received a $2.874 million loan.

Cano guaranteed both loans, prosecutors say.

“During the course of the conspiracy, a conspirator established various bank accounts in the Republic of Mexico. These included accounts at HSBC, Scotia Bank, BBVA Bancomer, Banamex, and Banregio. From 2007 and continuing into 2009, tens of millions of Mexican pesos were deposited into these accounts and then transferred to an account at Monex, a money transmitter, in Mexico,” the indictment states.

Upon deposit at Monex, the funds were transferred to accounts in the United States held by the companies formed by conspirators that took out loans guaranteed by Cano, authorities allege.

“Tomas Yarrington Ruvalcaba and Fernando Alejandro Cano Martinez worked together and with others to acquire and hold real estate for Tomas Yarrington Ruvalcaba in Mexico in a disguised manner so that Tomas Yarrington Ruvalcaba’s secret ownership of the real estate could not be easily detected. The real estate included the Hacienda San Juan that was developed into an exclusive hunting resort in the state of Tamaulipas, Mexico,” the indictment stated.

During the conspiracy, Cano was CEO and co-owner of the Ciudad Victoria-based construction firm Materiales y Construcciones Villas de Aguayo, S.A. de C.V.

“This firm received significant public work contracts in the State of Tamaulipas during Tomas Yarrington Ruvalcaba’s term as governor,” the indictment stated.

In turn, federal prosecutors say Cano paid bribes to Yarrington that included ranches and other real estate Cano acquired for Yarrington by using fronts.

As for the structured payments authorities say the men used to evade currency reporting requirements, those began in 2004 with a conspirator establishing various bank accounts which Yarrington in part funded with assets held under different names.

The accounts were used as fronts for expense payments for Yarrington and conspirators used structured transactions to avoid filing currency reports with the United States. The structuring included the issuance of checks by conspirators and withdrawals to conspirators in the amounts of $10,000 or less to avoid currency reporting requirements.

“Starting in 2005 and thereafter, lands acquired in the names of conspirators in Mexico were pledged as collateral for bank loans from First National Bank. Portions of the proceeds of these loans were then used to acquire additional ranch land in Mexico for Tomas Yarrington Ruvalcaba along with land in the United States,” the indictment stated.

Prosecutors also say Yarrington directed the fraudulent loans to acquire residences in Texas and a 2007 Chevrolet Suburban. “The documents submitted to First National Bank contained false statements,” according to the indictment.

Yarrington is scheduled for an in-person re-arraignment at 1 p.m. Thursday before Senior U.S. District Judge Hilda Tagle in Houston.

Sources: Gaceta Tamaulipas; El Cinco; Proceso; Border Reporter; The Monitor