Asset Recovery Watch

ARW-123
Hector Javier Villareal Hernandez / Bermuda
Mexico
Former Secretary of Finance, State of Coahuila (2005-2011)
Bermuda
Asset Location / Alleged Asset Location
2011
Ongoing
Art.17, Art.19, Art.20, Art.23
Yes
Execution of Foreign Warrant of Arrest in Rem (Bermuda); Non-Conviction Based Confiscation (in United States)
Unknown
Unknown
Ongoing Case
Ongoing
Investigation/Asset Tracing/Asset Restraint
($2,275,544.41 frozen in Bermuda; amount included in US entry only to avoid double counting)
NA
  According to the Agreed Final Judgment of Forfeiture filed on January 15, 2015 in the US District Court for the Southern District of Texas, the assets were forfeited to the United States, including after Mr. Villareal Hernandez agreed to the forfeiture.  (Source:  US v. All Funds on Deposit At Sun Secured Advantage Account Number 26-2673-031320, Case No. 2:13-cv-00033 (S.D. Tex)).     According to the US Department of Justice Press Release dated February 6, 2013, "The United States has seized a bank account located in Bermuda alleged to have been owned by former State of Coahuila, Mexico, Secretary of Finance Hector Javier Villareal Hernandez [  ].  The account, which is held in Bermuda, Sun Secured Advantage account at N.T. Butterfield and Son Limited, contained $2,275,544.41 as of Jan. 4, 2013. The government alleged, as its basis for forfeiture, that the funds in the account were involved in a money laundering transaction, that the property constitutes or was derived from proceeds traceable to offenses including bribery of a public official, or the misappropriation, theft or embezzlement of public funds by or for the benefit of a public official. [  ]    In approximately December 2005, Hernandez was appointed by then Governor of Coahuila Humberto Moreira to the position of Under Secretary of Program and Budget for Coahuila. In July 2008, Hernandez was appointed by the same governor to the position of Secretary of Finance for Coahuila. On Aug. 19, 2011, Hernandez resigned that position and became a subject of investigation by the government of Mexico. On Oct. 28, 2011, a local judge from Coahuila charged Hernandez with forging state documents to obtain fraudulent loans for several million pesos between 2008 and 2011. On Oct. 29, 2011, Hernandez was arrested and released on bond. He later fled and remains a fugitive on those charges.   According to the civil complaint, in 2011, Mexican law enforcement officials initiated an investigation involving fraudulent loans obtained from Mexican banks by Hernandez while he held the position of Secretary of Finance. The investigation includes three fraudulent loans from two different Mexican banks from July 2010 to March 2011 totaling more than $3 billion Mexican Pesos ($246 million U.S. dollars based on exchange rates on the dates of the loans). On Feb. 3 and March 8, 2012, Mexican government authorities filed false loan charges and issued arrest warrants for Hernandez’s involvement in the false loans with two Mexican banks. The charges allege Hernandez and other co-conspirators acquired loans by providing false information to Mexican banks. The false information involved the use of false registry stamps or previously approved registry stamps used on the false loan contracts.    The conspiracy is alleged in the complaint to have begun when Hernandez requested a loan on behalf of the State of Coahuila. He then drafted and submitted a false loan contract for approval by the federal Treasury Department. Hernandez conspired to falsify the approval of the submitted loan contract. His alleged co-conspirators, who worked at the federal Treasury Department, placed a fraudulent federal registry stamp or a previously approved registry stamp on the loan contract to make it appear that the loan contract had been approved. After the loan contract obtained the false registry stamp or previously approved registry stamp and received "approval," the contract was submitted to a Mexican federal bank for issuance of a loan to the State of Coahuila. Once the loan proceeds were obtained, they were available for use by the State of Coahuila. [ ]    Hernandez opened an offshore investment account in Bermuda during this time period. Since April 2009, it is estimated that Hernandez and his associates received more than $35 million through foreign exchange transactions and cross border wires and subsequently purchased numerous real properties in San Antonio, Brownsville and South Padre Island with the illegal proceeds."  (Source:  The United States Attorney's Office - Southern District of Texas, "Bermuda Bank Account Allegedly Owned by Former Mexican Secretary of Finance Seized by US," February 6, 2013.)     On March 3, 2013, a Senator from the Mexican state of Coahuila filed a claim, on behalf of himself and citizens of that state, for the seized funds on the basis that the funds were "embezzled and stolen from and belong to the State of Coahuila, Mexico."  He sought to "recover the Defendant Funds fo return to the treasury of the State of Coahuila, Mexico."  (Source:  US v. All Funds on Deposit At Sun Secured Advantage Account Number 26-2673-031320, Case No. 13-cv-33 (S.D. Tex), Verified Claim of Senator Luis Fernando Salazar Fernandez Contesting Asset Forfeiture, filed March 13, 2013.)   On June 24, 2013, Senator Salazar withdrew his claim, stating "he wil continue to pursue remission of the Defendant funds throught he Department of Justice."  (Source: US v. All Funds on Deposit At Sun Secured Advantage Account Number 26-2673-031320, Case No. 13-cv-33 (S.D. Tex), Notice of Withdrawl of Claim filed June 24, 2013.)   In January 2014, the US filed a notice of Mutual Legal Assistance request to Mexico, requesting assistance that notice of the asset forfeiture action be sent directly to anyone, including Mr. Hernandez (account holder) and his wife, who reasonably appears to have interest or claim in the property subject to forfeiture.  In March, Mr. Hernandez filed an answer to the complaint and a verified claim claiming that he was the lawful owner of the Defendant funds.  (Sources:  US v. All Funds on Deposit at Sun Secure Advantaged Account Number 26-2673-031320..., Case No. 2:13-cv-33 (S.D. Tex.), Notice of Mutual Legal Assistance filed on January 8, 2014; Answer to Complaint filed March 11, 2014; and Verified Claim filed March 18, 2014.) 

As of May 22, 2016, Mr. Villareal Hernandez's sentencing in US Federal Court for the Western District of Texas on money laundering conspiracy charge, to which he had plead guilty, was continued to October 5, 2016.  (Source: US v. Villarreal Hernandez, Case No. 5:14-cr-00100 (W.D. Tex), Agreed and Unopposed, Sealed Motion for Continuance of Sentencing filed February 8, 2016 and Court Docket Report as of May 22, 2016.)

Unspecified investigative agency
Unknown
Court - State of Coahuila
Unknown
Unknown
Unknown