http://www.roanoke.com/news/roanoke/wb/57886

Thursday, March 23, 2006
Immigrant confirms his role in bank scam
Authorities say the nationwide check fraud scheme targeted local banks and companies.
By Lindsey Nair
981-3343

Hector Cruz-Hernandez stood before a federal judge Wednesday, faced with explaining his role in a check fraud scheme.

"I have needs," he said through a translator. "I have children."

Cruz-Hernandez is one of 11 Mexican nationals who have pleaded guilty in Roanoke for their roles in a national crime cell that struck Cloverdale, Harrisonburg, Danville and Staunton in 2004 and 2005.

Prosecutors say banks in those areas lost tens of thousands of dollars to the group, which U.S. Attorney John Brownlee has called "one cell of a major Mexican organization" that is believed to have bilked U.S. banks out of $50 million over several years.

Brownlee's spokeswoman, Heidi Coy, said similar arrests have been made in Kentucky, Nevada, North Dakota and California.

The defendants, who are almost all illegal immigrants, were recruited in their home city of San Vicente, Mexico, and promised a cut of the proceeds for their families, court documents show. They were then smuggled across the border to commit the crimes in the United States.

According to court documents, the defendants posed as job applicants at construction companies during the day, then returned after dark to break in and steal blank payroll checks from the bottom of the stack. Officials say the cell likely chose construction companies because that industry has more Hispanic employees, making the scheme more believable.

After that, the suspects went to a safe house in Nashville, Tenn., where they used a typewriter to make out the checks to aliases that matched fake identification they had obtained.

The defendants had false employment authorization cards from the U.S. Department of Justice and false drivers licenses from Tennessee and Nevada, an indictment states.

Once the checks were ready, they drove back to Virginia and cashed them at various banks, the indictment shows. The checks were made out for $900 to $1,000 each.

Four construction companies were victimized by the cell, according to court records: Scott-Gallaher Inc. of Botetourt County; Sellers Brothers of Danville; J&J Limited of Staunton; and Shields Construction of Harrisonburg.

Investigators say the cell members hit J&J Limited and Shields Construction in late summer 2004 and Seller Brothers in fall 2004, cashing the checks at First Bank and Trust in Staunton, Rockingham Heritage Bank in Harrisonburg and Virginia Bank and Trust in Danville.

On March 4, 2005, a group cashed forged checks stolen from Scott-Gallaher at the Bank of Botetourt branches in the Bonsack and Peters Creek Road areas of Roanoke County and in Troutville and Daleville, an indictment says.

After they left, a teller at one bank became suspicious and called Scott-Gallaher. She learned that the check cashing might be a scheme, so when the defendants returned March 7 to cash more checks, she called police.

All but one of the defendants were arrested by Botetourt County sheriff's deputies that day; the last was apprehended later in Pennsylvania. Court documents show that while the defendants were being held in the Botetourt County Jail, they were sent money orders from Nashville and Los Angeles as a bribe to keep them from cooperating with authorities.

Most of the defendants have more than one alias, and Antonio Tovar-Pena, whom authorities have said is a ring leader, has at least 24. Jose Tovar-Pena, his brother, also pleaded guilty.

This month, a criminal complaint and arrest warrant was filed in federal court for a third Tovar-Pena brother, Arturo, who has 25 aliases.

The warrant is only for illegal re-entry into the United States by a convicted felon, but the complaint states that Arturo Tovar-Pena has been identified as a participant in the Botetourt County scheme.

According to the complaint, fingerprint impressions found on some of the checks were matched with fingerprints for Arturo Tovar-Pena that are on file with the Federal Bureau of Investigation.

Court testimony indicates that the FBI and Immigration and Customs Enforcement also used fingerprint analysis to tie other defendants to the crime.

The 11 defendants are scheduled to be sentenced this summer. After they have served their time, all but two will be deported. Arnoldo Munguia-Verdusco and Ivan Paul Sanchez, both resident aliens who were in the country legally at the time of the crimes, will be entitled to an immigration hearing and may or may not be deported, officials said.