Former La Joya school board Trustee Armin Garza confessed Thursday to participating in a kickback scheme that involved Performance Services Inc., a company that convinced local governments in western Hidalgo County to borrow millions for “energy savings” projects.
Armin Garza, 42, of Peñitas pleaded guilty to conspiracy to defraud the United States during a hearing Thursday afternoon. As part of the plea, Garza admitted to accepting more than $234,000 in kickbacks.
Information filed in the case against Garza suggests the government may bring charges against other elected officials and businessmen in western Hidalgo County.
“This is not a small-time operation,” said attorney Rick Salinas of Mission, who had warned that Performance Services Inc. contracts in western Hidalgo County were tainted by corruption. “This was a very large, illegal agreement with a lot of people.”
Attorney Carlos A. Garcia of Mission, who represents Garza, declined to comment.
Jim Adams, the general manager for Performance Services Inc. in Texas, couldn’t immediately be reached for comment Thursday afternoon.
Garza waived indictment and agreed to be charged by criminal information — a type of charging document typically used when a person is cooperating with prosecutors.
The criminal information details a sprawling conspiracy to steer “energy savings” contracts to Performance Services Inc. and solicit kickbacks from subcontractors.
According to the criminal information:
> “It was a part of the conspiracy that GARZA would conspire with others to launder and award compensation or other benefits to GARZA and other public officials in Hidalgo County, Texas in exchange for their respective official votes, motions, and support in favor of energy savings contracts proposed by Company D.”
“Company D” is Performance Services Inc.
> “Person D,” a Performance Services Inc. employee, hired subcontractors hand-picked by Garza and other people who participated in the conspiracy.
The subcontractors rewarded Garza with kickbacks.
> Along with Performance Services Inc., the conspiracy involved an engineering company and several other businesses.
> Garza used his position on the school board to influence other elected officials.
“As part of the exercise of his influence, GARZA supported promotions or awarding of stipends to Persons E-H in exchange for their official votes or support of Company D’s energy savings projects at other governmental entities.”
Person E, Person F, Person G and Person H were elected officials employed by the La Joya Independent School District.
> Garza talked with co-conspirators in a WhatsApp group chat.
They discussed “various topics, including their schemes, the need to be aware of law enforcement, and Company D’s current and prospective projects at other governmental entities in Hidalgo County.”
The group chat was called “Cartel City???”
Other co-conspirators discussed the scheme in WhatsApp group chats named “New City Admin,” “Chapo Enterprises,” and “The 3 Wizards.”
> Garza received kickbacks that went through several intermediaries.
“On or about May 4, 2018, Company A issued an invoice seeking payment in the amount of $223,237.68 in relation to a contract awarded to Company D. Company A subsequently issued a wire transfer to Company B’s bank account in the amount of $163,707.63 on May 16, 2018. Company B subsequently issued a check to Company E on May 16, 2018 in the amount of $63,250.00. Company E subsequently issued a check to GARZA in the amount of $50,000.00 on May 17, 2018. GARZA did not perform any work for Companies A, B, or E, but the transactions were layered to conceal and disguise the bribe and kickback payments to GARZA.”
Garza resigned from the school board after he pleaded guilty.
“We are aware of the plea entered by Trustee Armin Garza. On Jan. 6, 2022, Mr. Armin Garza submitted a letter of resignation from the La Joya ISD school board,” according to a statement released by the school district. “At this time, the district has no other information.”
Garza is part of a family with deep roots in western Hidalgo County.
His mother, Maria Estella Garza, taught at La Joya ISD for nearly four decades. His father, Arturo Garza Jr., served on the Peñitas City Council, the La Joya school board and the La Joya Water Supply Corp. board.
The youngest of three children, Garza attended La Joya High School and studied Health, Human Performance and Recreation Management at Baylor University.
After graduation, he accepted a job with La Joya ISD.
Garza taught physical education classes at Lorenzo De Zavala Middle School, where he eventually became the athletic coordinator, according to La Joya ISD personnel records. He also coached football, cross country and other sports.
In 2015, when Peñitas City Councilman Tomas Cedillo resigned to run for mayor, Garza started campaigning for the open seat.
Garza ran with mayoral candidate Rodrigo “Rigo” Lopez, City Councilman Ramiro Loya and City Councilman Jose Roel “J.R.” Flores. They called themselves “Peñ1tas” — and crushed their opponents at the polls.
About 60% of voters supported Garza. He defeated former La Joya school board President Arnold Ochoa, who had been a major player in western Hidalgo County politics.
They didn’t waste any time making changes at Peñitas City Hall.
Omar Romero, who had managed a Harley-Davidson dealership in McAllen, became the city manager. While he had worked for Oscar R. Gonzalez CPA and Associates, his grandfather’s accounting firm, which audited local governments, Romero had never actually worked for a city.
They also created a chief of staff position for Andres “Andy” Morales, a local political operative who had twice been arrested on drug trafficking charges.
The U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives arrested Morales on gun charges in May. Romero pleaded guilty to bribery and bankruptcy fraud charges in November.
Garza, though, didn’t stay in Peñitas long. In August 2016, after just a year on the City Council, he decided to run for the La Joya school board.
It was a big risk.
If he lost, Garza would be throwing away his job, his seat on the City Council and possibly his political career.
He went all in.
Garza resigned from his position at La Joya ISD on Aug. 12, 2016. He took a job with Agua SUD on Aug. 15. And he filed a ballot application on Aug. 19, which made his candidacy official.
Garza ran with school board Trustee Oscar “Coach” Salinas. During the campaign, they teamed up with Alex Cantu and Claudia Ochoa — the wife of Arnold Ochoa, who Garza had defeated in the Peñitas City Council election.
They won by the narrowest of margins.
Garza took the oath of office in November 2016. According to court records, the conspiracy started just six months later.
Sentencing is scheduled for March. Garza faces a maximum of five years in federal prison.