Tribal Fraudsters Duck Restitution, for Now

     EL PASO, Texas (CN) – A federal judge refused to order restitution against the congressional hopeful who misappropriated tribal funds from a casino where he worked and, along with his wife, kept the funds from Uncle Sam.



     Isidro Garza Jr. and his wife, Martha Gonzalez Garza, were convicted in 2007 by a jury in Waco for a scheme involving the Kickapoo Traditional Tribe of Texas-owned Lucky Eagle Casino.
     In addition to misappropriating tribal funds from the casino where both worked, the government claimed that the couple never paid taxes on those funds to the Internal Revenue Service.
     Though they were initially charged in Del Rio, the court moved their case to Waco instead of the San Antonio venue they had requested.
     The 5th Circuit then vacated the Garzas’ convictions after determining that the case should have remained in Del Rio. But the case bounced to El Paso after the Del Rio judge recused herself.
     There, Isidro and his wife both entered guilty pleas on March 14, 2012. Isidro Garza pleaded guilty to two counts of conspiracy, and his wife admitted to tax evasion. Each judgment stipulated that the court would handle restitution “at a later date.”
     Last week, U.S. District Judge Kathleen Cardone refused to make Isidro Garza pay the tribe $2.3 million in restitution and give another $566,000 to the U.S. under the Mandatory Victims Restitution Act (MVRA).
     “Although the government provided charts of the alleged losses and some documentary evidence, the government failed to explain who created the documents, how the documents were relevant, or why the documents were created in the first place,” Cardone wrote. “Further, and more troubling, the government did not provide any legal analysis explaining how the evidence met the legal requirements for an order of restitution.”
     The 29-page order says that the government then disregarded instructions to back its numbers.
     “In regard to Martha, neither the government nor Martha has filed any submissions regarding restitution despite having ample opportunity to do so,” Cardone noted.
     Isidro Garza applied tribal money to his unsuccessful campaign for a seat in the U.S. House of Representatives, as well as his son’s state-level campaign and one of his wife’s birthday parties, according to the government. The son, Timoteo Garza, had been a Democratic member of the Texas House of Representatives when his parents were charged.
     But the government failed to show that the tribe did not approve this use of funds, or that Garza spent beyond what the tribe allotted him as pay, according to the ruling.
     Cardone also took issue with the evidence cited by the United States Probation Office, which recommended that Isidro Garza pay $1.6 million in restitution to the tribe, and that he and his wife each pay $493,000 to the government.
     “In conclusion, neither the government nor probation have presented sufficient evidence to show by a preponderance of the evidence that the tribe suffered an actual loss caused by Isidro’s convicted conduct,” the order states. “Therefore, the court cannot award restitution to the tribe despite the harm that Isidro caused to the tribe and its members.”
     Martha Garza’s plea requires that she “pay restitution as a condition of probation or as a condition of supervised release,” but the probation office provided paltry evidence, according to the court.
     “The court is troubled by not awarding restitution in this case,” Cardone stated. “The purpose of the MVRA is to compensate victims for their losses. And the court suspects that both the tribe and the United States have suffered losses at the hands of defendants Isidro and Martha. But the law does not allow the court to order restitution based on suspicions.”
     The Garzas could still face civil claims going forward, and the recent decision “does not alter the court’s previous order that as a condition of supervised release both Isidro and Martha ‘shall pay all taxes, penalties, and interest due and owed to the Internal Revenue Service,'” Cardone wrote in a footnote.

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