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PRESS RELEASE: Ex-CEO of McAllen-Based Trucking Company, USA Dry Van Logistics, Sentenced in $11 Million Fraud Scheme

Department of Justice
U.S. Attorney’s Office
Southern District of Texas
FOR IMMEDIATE RELEASE
Monday, February 8, 2016

Ex-CEO of McAllen-Based Trucking Company Sentenced in $11 Million Fraud Scheme

HOUSTON – The former CEO of USA Dry Van Logistics (USADV), a cross-border trucking company that services the maquiladora industry, has been ordered to federal prison, announced U.S. Attorney Kenneth Magidson. Sergio Lagos, 46, pleaded guilty Jan. 20, 2015, to conspiracy to commit wire fraud and six counts of wire fraud. Also sentenced today were Aurelio “Jim” Aleman, 62, and Oscar Barbosa, 53, former chief operations officer and former controller for the company, respectively, who pleaded guilty to conspiracy to commit wire fraud on Sept. 16, 2013.

Today, U.S. District Judge Kenneth M. Hoyt ordered Lagos to serve a total of 97 months in federal prison to be immediately followed by three years of supervised release. Aleman and Barbosa were handed respective sentences of 47 and 24 months, also followed by three-year-terms of supervised release. The court further ordered restitution in the amount of $15,970,517.37 which includes payment for attorney fees and investigative fees incurred by GE Capital in investigating the magnitude and extent of the defendants’ fraud.

According to records, Aleman and Lagos entered into a financing agreement with GE Capital Corporation (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 justified advances on the line of credit by submitting “borrowing base certificates” to GECC.

Lagos admitted that from March 2008 through the end of January 2010, he joined in a scheme to defraud and swindle GECC, a lending company that provided capital to USADV, fraudulently obtaining funds through a revolving line of credit. At the plea hearing, Lagos admitted he schemed to conceal from GECC the truth about USADV’s declining operating performance and financial results. Rather than reveal USADV’s true condition, Lagos and his co-defendants misrepresented USADV’s true operating performance and financial results to include 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.

Lagos 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 have been permitted. Lagos 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 also admitted to submitting false financial statements to auditors and GECC.

When the truth about USADV’s operations and finances were revealed, USADV went into bankruptcy and is no longer operational.

The three defendants were permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.

The investigation was conducted by Homeland Security Investigations and the FBI. Assistant U.S. Attorney (AUSA) Casey N. MacDonald and former AUSA Grady J. Leupold prosecuted the case.

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