Progreso Mayor and Other Public Officials Charged in Conjunction with Bribery Scheme

MCALLEN, TX—Jose Guadalupe Vela, Jr., 64; Omar Leonel Vela, 35; and Michael Vela, 29, have been arrested on charges of conspiracy, mail fraud, violations of the Travel Act, theft, and bribery, United States Attorney Kenneth Magidson announced today.

The sealed indictment, returned in Houston August 21, 2013, was unsealed upon the arrest of Jose Vela and his sons Omar and Michael Vela today in Progreso. They are expected to make their initial appearances before a U.S. Magistrate Judge Dorina Ramos in McAllen tomorrow morning.

The three men are charged based on their alleged participation in a scheme to create a “pay-to-play” public contracting system in Progreso. According to the indictment, they used their control of Progreso municipal government and the Board of Trustees of the Progreso Independent School District (PISD) to extract bribes and kickbacks from service providers to PISD and the city. PISD receives more than $1 million per year in federal funds from the U.S. Department of Education.

The 10-count indictment alleges that from June 2004 until the date of indictment, the Vela family members conspired to obtain bribes and kickbacks from several service providers. Those allegedly include a construction company and an architectural firm hired as contractors by the city and PISD, an attorney hired as local counsel to advise PISD and a company that supplied PISD and the city with electrical and plumbing supplies.

According to the indictment, Jose Vela, the maintenance and transportation supervisor for PISD, maintained political control in Progreso through his sons Omar Vela, the mayor of Progreso, and Michael Vela, president of the PISD Board of Trustees. The indictment charges that Jose Vela controlled members of the PISD Board of Trustees through a system of reward and retaliation. That is, board members who voted as directed by Jose Vela were allegedly rewarded with bribe money, but those who did not follow his direction were faced with retaliation.

According to the indictment, from 2004 to 2006, the construction company paid Omar Vela approximately $85,000 in bribes in order to be hired on projects in Progreso, including the construction of an elementary school, a school gymnasium and a municipal park. The indictment further indicates that in 2008 and 2009, the attorney paid nearly $10,000 to the three defendants in order to be hired as local counsel for PISD.

The indictment also alleges that from 2009 to 2012, Omar Vela instructed the owner of the electrical and plumbing supply company to provide fraudulent invoices to PISD and the city of Progreso for products that were not supplied. When the invoices were paid, Omar Vela allegedly instructed the owner of the supply company to return the funds to Omar Vela as kickbacks. Through this scheme, Omar Vela is alleged to have stolen more than $14,000 from the city of Progreso and PISD.

If convicted, each face up to 20 years in prison for mail fraud, five years for the conspiracy, 10 years for each of the bribery and theft involving federal programs, and five years for each of the six counts of violations of the travel act. All charges also carry a possible maximum fine of $250,000.

The investigation was conducted by the FBI. Assistant United States Attorney Robert S. Johnson is prosecuting the case.

An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.