When investigators raided the Voodoo Lounge last year, what started as a standard gambling case took a strange twist.
On paper, Adan Christopher Palacios owned the Voodoo Lounge — a nondescript bar at the intersection of Farm-to-Market Road 495 and Veterans Boulevard in San Juan.
Investigators seized more than $12,000 and two dozen slot-machine style devices from the Voodoo Lounge on Nov. 11, according to court records. They accused Palacios of paying cash prizes, which violated Texas law.
Palacios, though, told a different story.
“Mr. Palacios went on to say that it was a guy from Peñitas or Palmview by the name of Arnold Ochoa who assembled the business,” according to the civil forfeiture affidavit. “He also said that Arnold’s wife’s name is Claudia and that she is in politics.”
Former La Joya school board president Arnold Ochoa worked for the Palmview Police Department for 18 years. His wife, Claudia Ochoa, currently serves on the school board.
Arnold Ochoa said he knows Palacios and connected him with a business opportunity, but adamantly denied any involvement in illegal gambling.
“That he feels he was betrayed or whatever he feels, that’s up to him,” Arnold Ochoa said. “I just hooked him up with those people. And if he felt that, I’m sorry.”
The Voodoo Lounge
Palacios had big plans for the Voodoo Lounge.
Patrons would relax on couches while enjoying glasses of wine, Palacios said, according to paperwork reviewed by the San Juan City Commission. Attempting to assuage any concerns, Palacios promised the Voodoo Lounge “will not be a typical bar.”
He didn’t mention the slot-machine style devices, which became a major attraction for the Voodoo Lounge.
The City Commission approved a conditional use permit in February 2017. Palacios started serving drinks two months later, when the Alcoholic Beverage Commission approved a beer and wine permit.
Questions about the Voodoo Lounge surfaced during October, when someone called San Juan Crime Stoppers with concerns about illegal gambling. Undercover cops visited the bar.
After the undercover cops handed Palacios cash, he provided them with PIN numbers to play the machines, according to the criminal complaint. When they won, Palacios paid cash.
After conducting three undercover operations, investigators started drafting a search warrant.
Investigators across the Rio Grande Valley routinely shut down underground game rooms, where customers play slot-machine style devices called eight-liners. They occasionally find virtually identical “sweepstakes machines,” which purport to comply with Texas law.
Gambling must involve chance, said attorney Stuart Baggish, who represents an Austin-area sweepstakes company called Tejas Vending. Sweepstakes machines rely on something else: a limited number of entries with predetermined outcomes.
“It’s a subtlety that not many in the law enforcement community pay attention to,” Baggish said.
Legitimate sweepstakes don’t break Texas gambling laws, Baggish said. However, the company acknowledges sweepstakes machines may prompt questions from law enforcement.
“There is also the risk of local law enforcement confusing sweepstakes machines as gambling devices and acting too hastily,” according to the Tejas Vending website.
Sweepstakes are legal, but they can’t pay cash prizes, said Lt. Mario Villarreal of the Alcoholic Beverage Commission.
“If somebody’s being paid cash upfront for their winnings, it’s automatically not sweepstakes,” Villarreal said.
In the Voodoo Lounge case, investigators accuse Palacios of paying cash prizes on three separate occasions.
Investigators with the San Juan Police Department, the Pharr Police Department and the Alcoholic Beverage Commission raided the Voodoo Lounge at 5 p.m. on Nov. 11.
They confiscated more than $12,000 from cash registers, the ATM and a small safe, according to the affidavit. Investigators also seized dozens of computers and four flat-screen TVs.
Palacios said he thought the slot-machine style devices were legal.
“He said that Arnold had lied to him because he was told that as long as they were giving away donations it made it legit to have an eight-liner business,” according to the affidavit.
Palacios claimed the Voodoo Lounge donated money to the American Legion in Pharr.
The Voodoo Lounge donated $200 to American Legion Post 101 in Pharr, according to a spokesman for the organization. Concerns about the propriety of the arrangement prompted the American Legion to stop accepting money after the first payment.
What happened to the vast majority of the money remains a subject of contention.
Palacios said Arnold Ochoa sent people to collect money from the machines, according to the affidavit. Arnold Ochoa denied sending anyone to collect money.
“Anybody can mention anybody to the cops,” Arnold Ochoa said, adding that he didn’t do anything illegal.
Neither Arnold Ochoa nor Claudia Ochoa was charged with any crime. Court records don’t reveal whether or not investigators took the allegations about Arnold Ochoa seriously.
San Juan police Chief Juan Gonzalez declined to comment on the Voodoo Lounge investigation.
“It is still an ongoing criminal case,” Gonzalez said. “Can’t discuss details.”
Neither Palacios nor his attorney responded to requests for comment.
“To the media … sorry but we will not be doing any interviews for anyone,” the Voodoo Lounge wrote on Facebook in November.
The Voodoo Lounge page later disappeared from Facebook altogether.
Palacios is charged with gambling promotion, a Class A misdemeanor; possession of gambling equipment, a Class A misdemeanor; and keeping a gambling place, a Class A misdemeanor.