The FBI on Wednesday arrested a McAllen businessman accused of paying “thousands of dollars in bribes” in exchange for a $300,000 payment from the Weslaco Economic Development Corp.
Sunil B. Wadhwani, 56, of McAllen — who owns the Motel 6 in Weslaco and La Quinta hotels in Pharr and McAllen — surrendered to FBI agents on Wednesday morning.
“Beginning in at least April 2013, Wadhwani allegedly conspired with others to obtain a development agreement with favorable terms containing $300,000 in incentive agreements from the City of Weslaco Economic Development Corporation,” according to a news release from the U.S. Attorney’s Office for the Southern District of Texas.
Wadhwani emigrated from Indonesia to Texas when he was 5 years old, according to information discussed in court Wednesday. He became a United States citizen and moved to the Rio Grande Valley in 1980.
Members of the Wadhwani family own hotels in Laredo, Hidalgo County and San Antonio.
In 2013, Wadhwani wanted to build a Motel 6 in Weslaco. To kick-start the project, he requested $300,000 from the Weslaco EDC.
“In order to effectuate or devise the approval of the development agreement, for the Motel 6 project, Defendant paid thousands of dollars in bribes to Person C and Commissioner A
through Person B,” according to the criminal complaint.
The criminal complaint doesn’t identify Person B, Person C or Commissioner A by name.
Person B is “a person under indictment for another bribery scheme occurring with other Weslaco City Commissioners,” according to the criminal complaint, which appears to reference the Weslaco water treatment plant bribery case.
Commissioner A “was a sitting Weslaco city commissioner and Economic Development Corporation Board member,” according to the news release.
In May 2013, when the Weslaco EDC approved the development agreement, former City Commissioner Gerardo “Jerry” Tafolla, former City Commissioner David Fox and former City Commissioner Guadalupe “Lupe” Rivera served on the board.
“Mr. Tafolla made a motion that the Board of Directors of The Economic Development Corporation of Weslaco (EDC) provide an incentive of up to Three Hundred Thousand Dollars ($300,000.00) to Sarina Group, Ltd., for the Motel 6 project,” according to the minutes for the May 8, 2013, meeting, which the Weslaco EDC released under the Texas Public Information Act. “Mr. Rivera seconded the motion. Motion carried unanimously.”
Tafolla and Fox pleaded guilty in the Weslaco water treatment plant case. Rivera hasn’t been charged with any crime.
Wadhwani signed the Motel 6 development agreement in December 2013.
“An individual who served as one of the Corporation’s Executive Directors during the Motel 6 incentive agreement negotiations also recalled being visited by Commissioner A and the Defendant regarding said incentive agreement and felt pressured regarding the agreement,” according to the criminal complaint. “This individual also stated that it was unusual for the Corporation to approve the payout of the majority or entirety of incentive funds in the manner in which it was done within the finalized Motel 6 development agreement.”
Weeks after Wadhwani signed the agreement, Person B received “a purported consulting services agreement” between a company owned by Wadhwani and a consulting business owned by Person C.
“Under a section entitled compensation, it discussed that payment should be one lump sum payment of $75,000,” according to the criminal complaint. “Based on prior versions of the document as well as the handwritten revisions, it can be seen that the $75,000 amount had been reduced from a prior $150,000 figure on the document.”
When, exactly, the FBI started scrutinizing the Motel 6 project remains unclear.
The Weslaco EDC received a subpoena at some point before May 2, 2019, for the Motel 6 project records.
In response, the Weslaco EDC released 175 pages of documents, according to records released under the Texas Public Information Act.
The FBI also sent a subpoena to Google on Sept. 10, requesting records from a Gmail account that Wadhwani used when he communicated with the Weslaco EDC.
After he received a copy of the Google subpoena, Wadhwani’s attorney filed a motion to quash.
“The subpoena is facially defective because the FBI is demanding an organization appear to
‘testify’ without stating the reasons for requesting the release of Wadhwani’s information,” according to the motion filed by Wadhwani’s attorney.
Prosecutors unsealed the criminal complaint against Wadhwani on Wednesday. He’s charged with conspiracy to commit honest services wire fraud, a federal felony.
Wadhwani surrendered to FBI agents at 7 a.m. Wednesday, said his attorney, Michael Wynne of Houston.
U.S. Magistrate Judge Juan F. Alanis set bond at $50,000.
Wynne and Assistant U.S. Attorney Roberto “Bobby” Lopez Jr., who is prosecuting the case, indicated Wednesday that Wadhwani may be indicted during the next few weeks.