The La Joya Housing Authority voted Saturday to suspend its Executive Director Juan Jose “J.J.” Garza without pay two months after he was indicted for allegedly using false companies to engage in a bid-rigging scheme.
The special board meeting was called after the board was notified of a letter from the U.S. Department of Housing and Urban Development (HUD) sent to Garza last October banning him from working for the board. Garza was hired by the La Joya Housing Authority to oversee its federally funded housing projects. He’s accused of submitting false bids for HUD-funded projects in Donna and Alamo and conspiring with local contractor Armando Jimenez to receive payment for those projects.
Therefore, it would be inappropriate for him to oversee federally funded housing projects in La Joya, said HUD’s Fort Worth-based spokeswoman, Patricia Campbell.
During the special board meeting held Nov. 19 San Antonio-based lawyer Mark A. Sanchez, who was hired by the board to handle the Garza matter, recommended the board fire Garza in a follow-up meeting.
“You’re beset with a series of scandals and in order to address them they need to be confronted head-on,” Sanchez told the board. “Being under federal indictment is a very serious issue and the accusations against Garza are wide ranging, going back to 2012, and they involve the misuse of taxpayer’s dollars. When people say ‘La Joya Housing Authority,’ it connotes a certain reaction today, but tonight we’re going to take steps to ensure that’s changed.”
Garza was not in attendance for the special board meeting.
U.S. Marshals arrested Garza and Jimenez in connection with a bid-rigging scheme dated between July 2012 and March 2013. The indictment against Garza states both men submitted false construction bids to the Alamo and Donna housing authorities under the names of Crane Construction and Carlos Orillana. Some of the projects awarded to Jimenez’s construction company also employed Garza as a subcontractor, the indictment alleges. During that time nearly $45,000 in payments were awarded to both men, according to the indictment.
Garza pleaded not guilty to seven counts of wire fraud and one count of conspiracy to commit wire fraud this past September. Each count of wire fraud is punishable by up to 20 years in federal prison and a fine of $250,000. A pretrial hearing has been set in February in U.S. District Court in McAllen.
Garza is also a La Joya ISD trustee, but the charges are unrelated to the school district, which has taken no action to remove Garza, said Trustee President Oscar O. Salinas.
Garza, who provided the Progress Times with a copy of the initial letter, said the contents of the letter confused him. The letter stated Garza was being notified of an “immediate suspension from participation in procurement and non-procurement transactions as a participant or principal with HUD and throughout the Executive Branch of the Federal Government.”
According to Garza, the letter, which was dated Oct. 19, never specified what exactly he was suspended from doing.
“The letter doesn’t say I’m being suspended from the housing authority or that I cannot work there,” Garza said in a phone interview Monday. “It says I cannot participate in procurement and other things that have to do with funds. I assumed it meant I couldn’t do any construction work and right now I am suspended until the outcome of the investigation.”
Garza also said the letter was mailed to his place of residence in La Joya and it didn’t instruct him to notify board members of his suspension. The 48-year-old said he was hoping his suspension wouldn’t result in the loss of his $69,000 salary, his main source of income.
“Today was the first day of me not going into the office,” he said. “I’m not working since my suspension also means I am removed from my part-time construction job and my family and I will need to strategize to not struggle financially. The board has always been great to me and they did what they had to do to follow procedures. I wish them the best and hope it’s going to be OK.”
The board learned of the existence of the suspension letter after Chairwoman Frances Salinas De Leon received a courtesy email from HUD Nov. 16 that contained the initial letter as an attachment.
“There was no way we would’ve known about this letter otherwise,” De Leon said after the meeting. “Garza has not been proven guilty and we support him personally but that’s something we must leave at the door when we come in as board members. We have to do what HUD tells us. Suspending him was hard but it had to be done.”
As a precautionary measure, the board also voted to change all of its computer passwords, locks on the building and to remove Garza from any bank accounts for the housing authority Garza has access to.
Melissa Armijo, who served as Garza’s administrative assistant, was promoted to fill in as interim director. Armijo previously took on this role in late September during the week Garza spent incarcerated.
“I have mixed emotions because I am taking my old boss’ job, but I am ready and I just want to move forward and let our community know we will still be operational,” Armijo said.