Three Ex-Executives of USA Dry Van Trucking Company Charged in Alleged $26 Million Fraud Scheme

HOUSTON—Sergio Lagos, 44, Aurelio “Jim” Aleman, 59, and Oscar Barbosa, 50, have been arrested following the return of a six-count federal indictment charging wire fraud and conspiracy to commit wire fraud, announced United States Attorney Kenneth Magidson.

The sealed indictment, returned August 27, 2013, was unsealed following the arrest of the McAllen residents today. They are expected to make their initial appearances before U.S. Magistrate Judge Dorina Ramos this morning.

Lagos was the former CEO of USA Dry Van Logistics (USADV), a cross-border trucking company that services the maquiladora industry, while Aleman and Barbosa were the former chief operations officer and former controller, respectively.

The indictment alleges that from March 2008 through the end of January 2010, Lagos, Aleman, and Barbosa joined in a scheme to defraud and swindle GE Capital Corporation (GECC), a lending company that provided capital to USADV, fraudulently obtaining funds through a revolving line of credit. Lagos, Aleman, and Barbosa allegedly schemed to conceal from GECC the truth about USADV’s declining operating performance and financial results. Rather than reveal USADV’s true condition, Lagos, Aleman, and Barbosa allegedly misrepresented USADV’s true operating performance and financial results. According to the indictment, they misrepresenting to GECC the nature of the USADV’s accounts receivable, against which GECC was permitting USADV to borrow hundreds of thousands of dollars on a weekly basis. This caused USADV to appear to be operating more profitably that it actually was.

According to the Indictment, Lagos and Aleman entered into a financing agreement with GECC under which GECC would issue a revolving line of credit which was secured by USADV’s accounts receivables. By January 2010, the maximum borrowing limit under the agreement was increased to $38 million. Pursuant to the agreement, USADV allegedly justified advances on the line of credit by submitting “borrowing base certificates” to GECC. Lagos, Aleman, and Barbosa allegedly signed, prepared, and/or directed others to prepare certificates that falsely inflated the amount of the company’s accounts receivables and caused them to be submitted to GECC to enable USADV to obtain more funds than would otherwise would have been permitted. Lagos, Aleman, and Barbosa allegedly perpetuated and concealed the scheme to defraud GECC by directing other employees to manually invoice millions of dollars of fraudulent receivables to inflate the borrowing base and to create false and forged invoices and support documentation for accounts receivables that did not exist. Lagos, Aleman, and Barbosa also submitted false financial statements to auditors and GECC, according to the indictment.

When the truth about USADV’s operations and finances were revealed, USADV went into bankruptcy. The indictment alleges USADV successfully re-organized under Chapter 11 bankruptcy proceedings and is currently operating with new owners. Lagos, Aleman, and Barbosa are no longer affiliated with or employed by the company. According to the indictment, the amount of actual loss to GECC was more than $26 million.

Each of the six counts of the indictment carries a maximum punishment of 20 years in prison and up to a $250,000 fine.

The investigation was conducted by Homeland Security Investigations and the FBI. Assistant United States Attorneys Casey N. MacDonald and Grady J. Leupold are 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.