Federal agents arrest former county commissioner, former city commissioner and school board trustee in Weslaco water treatment plant bribery case

Federal agents arrested a former Hidalgo County commissioner, a former Weslaco city commissioner and a member of the Rio Grande City school board Friday.

The FBI and agents with the Criminal Investigation division of the IRS arrested former Hidalgo County Commissioner Arturo “A.C.” Cuellar Jr., 65, of Progreso Lakes; former Weslaco City Commissioner John F. Cuellar, 56, of Weslaco; and Rio Grande City school board Trustee Daniel J. Garcia, 40, of Rio Grande City on Friday morning.

They’re accused of participating in a scheme to steer more than $50 million worth of infrastructure contracts — including the Weslaco water treatment plant project — to specific engineers. In exchange, the engineers paid more than $4 million in bribes.

“We look forward to trying this case. We look forward to the facts coming out,” said attorney Carlos A. Garcia of Mission, who represents A.C. Cuellar. “A.C. is a longstanding pillar of this community, so we look forward to the opportunity to have our side of the story told.”

Rumors about the arrests rocketed across Hidalgo County.

Agents arrested A.C. Cuellar at the Le Peep restaurant on the 7700 block of North 10th Street in McAllen.

A.C. Cuellar had just arrived when several cars pulled into the parking lot, according to a person present at Le Peep when the arrest occurred.

When he saw the cars, A.C. Cuellar left the restaurant and surrendered to federal agents, according to the person, who spoke on the condition of anonymity.

Special Agent Michelle Lee, a spokeswoman for the FBI, confirmed the arrests of John Cuellar and Garcia within the hour.

The criminal complaint against them charged A.C. Cuellar and John Cuellar with conspiracy to commit honest services wire fraud. Garcia is charged with conspiracy to commit money laundering.

A.C. Cuellar, John Cuellar and Garcia remain in federal custody.

The criminal complaint details how engineers paid more than $4 million to former Rio Grande City Municipal Judge Leonel J. Lopez Jr., a major player in Starr County politics who also worked for state Rep. Ryan Guillen.

Lopez accepted more than $2.5 million from a San Antonio-based engineering company and the company owner, according to the criminal complaint, which identified them as “Company B” and “Person B.”

Company B worked with Company A, which the criminal complaint identified as “an international engineering and construction company,” on the Weslaco water treatment plant project.

“In or about 2008, Company B began paying LOPEZ approximately $17,000 per month,” according to the criminal complaint. “In or about February 2011, around the time that JOHN CUELLAR voted to approve the professional services agreement with Company A to prepare a preliminary engineering report on the WTP, Company B increased the amount paid on a monthly basis to LOPEZ from approximately $17,000 to approximately $25,000 to $40,000 per month.”

The owner of Company B also paid Lopez directly.

“From in or about June 2012 to in or about May 2014, Person B paid a total of approximately $300,000, in four payments of approximately $75,000 each, to LOPEZ under the pretense that Person B was leasing a hunting property that belonged to LOPEZ,” according to the criminal complaint. “In truth, these purported lease payments were another way for Person B to pay bribe money to LOPEZ.”

Lopez started paying A.C. Cuellar, who passed part of the money to his cousin, John Cuellar, a key player on the Weslaco City Commission.

A.C. Cuellar kept about $1 million and passed the remaining money to John Cuellar through a corporation identified in the criminal complaint as “Company D.”

“From in or about April 2011 through in or about November 2014, ARTURO CUELLAR, JR. paid approximately $405,000 to JOHN CUELLAR through Company D in semi-monthly payments ranging from approximately $5,000 to approximately $7,500, disguised as payments for legal services that were never rendered, so that JOHN CUELLAR would take official actions to benefit Company A, Company B, and Company C,” according to the criminal complaint.

John Cuellar pushed the City Commission to approve contracts with Company A, Company B and Company C, a engineering company based in McAllen.

Along with the payments from his cousin, John Cuellar also accepted cash from Lopez through Garcia, an attorney who serves on the Rio Grande City school board.

“In March of 2016, FBI agents interviewed GARCIA. During the interview, GARCIA stated that he met LOPEZ and JOHN CUELLAR at a restaurant in Mission, Texas and was provided with approximately $75,000 to $85,000 as a retainer for title work to be performed on LOPEZ’s behalf,” according to the criminal complaint. “GARCIA stated that after the meeting, LOPEZ asked him to write a check in the same amount as the retainer to JOHN CUELLAR. GARCIA stated that he thought LOPEZ’s request to pay him was odd because JOHN CUELLAR had not performed any work to justify the payment.”

Garcia paid about $90,000 to John Cuellar through his attorney trust account.

In return, A.C. Cuellar and John Cuellar helped one of Garcia’s friends, an attorney from Houston, obtain a city job.

John Cuellar wasn’t the only member of the City Commission who accepted bribes.

Businessman Ricardo “Rick” Quintanilla, 51, of Weslaco, passed money from Lopez to “Commissioner A,” according to the criminal complaint.

While “Commissioner A” isn’t identified by name, information released by federal prosecutors made clear the person in question is City Commissioner Gerardo “Jerry” Tafolla. He didn’t respond to a request for comment.

Along with a summary of the scheme, the criminal complaint quoted a February 2018 conversation between FBI agents and A.C. Cuellar.

“ARTURO CUELLAR, JR. recalled that JOHN CUELLAR was paid by Company D. When asked whether the payments from Company D to JOHN CUELLAR were intended to take care of John Cuellar on the side, ARTURO CUELLAR, JR. stated ‘If, yeah, yeah, you know so,’” according to the criminal complaint. “When asked if the payments were intended to have JOHN CUELLAR vote a certain way regarding the WTP, ARTURO CUELLAR, JR. stated ‘well that makes sense what you’re saying.”

A.C. Cuellar, John Cuellar and Garcia may appear before U.S. Magistrate Judge J. Scott Hacker on Monday.

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