Texas couple defrauded military services up to $11M, Army investigators say
Federal agents are investigating a U.S. Military few in Texas for allegedly defrauding the armed service out of as a great deal as $11 million, in accordance to an affidavit unsealed last 7 days.
The affidavit, submitted in court prior to a raid on Kevin Pelayo and Cristine Fredericks’ home in close proximity to Fort Hood, accuses the couple of using a transportation reimbursement software for federal personnel to swindle the Army out of $2.3 million to $11.3 million. The raid by federal brokers yielded much more than 20 vehicles and the dollars from 10 financial institution accounts belonging to married U.S. Military veterans in Texas, according to the affidavit.
Army investigators acquired warrants very last thirty day period to confiscate the cash and residence and to gather evidence of the alleged fraud during their search of the household of the retired sergeants, a short while ago unsealed federal court docket information say.
FILE: Members of the media wait outdoors of the Bernie Beck Gate, an entrance to the Fort Hood armed forces base in Fort Hood, Texas. (AP)
Investigators advised the court there was possible bring about to believe the couple fully commited crimes together with wire fraud, identification theft and income laundering. There is no record that possibly of them has been criminally billed.
In the course of the look for of the couple’s residence, investigators seized documents, laptop difficult drives, cellphones and far more than 100 designer items, in accordance to a checklist of what was gathered. It also lists 23 vehicles, trucks, SUVs and other automobiles, and a box that contains extra than 60 license plates from “numerous states.”
Soon after arriving at Fort Hood in 2010, Pelayo set up a van enterprise to give employees rides to and from the base below a federal method that subsidizes governing administration personnel utilizing mass transit in an effort to lower site visitors and air pollution. Military services investigators allege that it turned into a extremely rewarding fraud.
As a platoon sergeant, Pelayo had access to the staff data of soldiers below his command, and Fredericks had worked for Army human sources, in accordance to the affidavit. Investigators reported Pelayo made use of this entry to indication soldiers up for the mass transportation subsidy with out their knowledge and then routed the payments to his business’ lender accounts.
The affidavit alleges that, commencing all over 2014, Pelayo registered troopers about the state for subsidies of $255 or $265 a month. A number of enrolled troopers reported they had in no way ridden in the van pool, and investigators identified that a lot of had been not even at Fort Hood.
This plan allegedly continued for decades, even even though Pelayo was stationed in South Korea ahead of his retirement past August. Pelayo and Fredericks moved the dollars into an array of lender accounts, investigators wrote in the courtroom filing, stating they have more than 20 properties in Texas, New York, Washington, and Hawaii.