Case 4:20-cv-03256 Document 1 Filed on 09/18/20 in TXSD Page 1 of 6 LINITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION LINITED STATES OF AMERICA, Plaintiff, v. $ $ $ $90,150.00 in U.S. CURRENCY, $73,414.A0 in U.S. CURRENCY, 522,400.00 in U.S. and CURRENCY, Defendants. CIWL ACTION NO. $ $ $ $ $ $ $ VERIFIED COMPLAINT FOR CTVL FORFEITURE IN REM AND NOTICE TO POTENTIAL CLAIMANTS The United States of America, Plaintiff, files this action for forfeiture in rem against S90,150.00,$73,474.00, and 522,400.00 in U.S. Currency seized on or about February 27,2020, and alleges upon information and belief the following: JURISDICTION AND VENUE 1. as this is a 2. This Court has subject-matter jurisdiction pursuant to 28 U.S.C. $$ 1345 and 1355, forfeiture action brought by the United States. Venue is proper in this Court pursuant to 28 U.S.C. $$ 1355(bX1), 1391(b), and 1395. A substantial parl of the acts and omissions occurred in this District, and the Defendant Property was found in this District. DEFENDANT PROPERTIES SUBJECT TO FORFEITURE 3. The First Defendant Property is $90,150.00 in U.S. Currency seized on or about February 27, ZAZA, from the residence of a person who was then the Chief Operating Officer (the "COO") for the Houston Independent School Diskict ("HISD"). Case 4:20-cv-03256 Document 1 Filed on 09/18/20 in TXSD Page 2 of 6 4. February 27 , The Second Defendant Property is$73,474.00 in U.S. Currency seized on or about 2A20, from the residence of a person who owns a business that has a contract with HISD (the "Contractor"). 5. The Third Defendant Property is 522,400.00 in U.S. Currency seized on or about February 27,2020, from the vehicle of the Contractor. 6. The United States alleges that the Defendant Properties constitute or are traceable to the proceeds of federal programs theft and wire fraud. STATUTORY BASIS AND NATURE OF ACTION 7. This civil action in rem is brought to enforce the provisions 981(a)(1)(C), which provides of 18 U.S.C. for the forfeiture of any property, real or personal, g which constifutes or is derived from proceeds traceable to any offense constituting "specified unlawful activity" (as defined in 18 U.S.C. $ 1956(c)(7)), or a conspiracy to commit such offense. Title 18 U.S.C. $$ 666 (theft of federal funds) and t343 (wire fraud) are both "specified unlawful activity" pursuant to l8 U.S.C. $1956(c)(7). FACTS 8. HISD is the largest school district in Texas and includes approximately 280 schools, as wellas administration buildings. As the seventh-largest school district in the United States, HISD receives millions of dollars in federal funds. 9. The COO at HISD oversees an annual operating budget of rnore than $250 million and leads a workforce of more than 7,000 employees from six major departments. One of those Case 4:20-cv-03256 Document 1 Filed on 09/18/20 in TXSD Page 3 of 6 departments is Facilities, Maintenance, and Operations, which includes maintenance of HISD school grounds. 10. The Contractor owns a lawn and landscaping businesses that has performed work for HISD over the years. Since approximat ely 2A16, the Contractor's business has held a multi- million dollar contract with HISD for grounds maintenance, landscaping, tree pruning and removal, and irrigation systems for certain HISD properties. The Contractor's business would also periodically submit proposals for other HISD projects, such as the renovation of athletic playing fields. 11. There is reason to believe that the COO conspired with the Contractor and others to cause HISD to approve proposals submitted by the Contractor's business and to pay the Contractor's business for work that it did not perform. At times, HISD employees performed a portion of the contracted work, often at overtime rates. 12. In order to share the criminal proceeds the Contractor obtained from the fraud, the Contractor paid kickbacks to the COO, including cash kickbacks. 13. The Contractor would sometimes write checks from his business account to other people, like subcontractors, and have them cash the check and return most of the cash to the Contractor. 14. Shortly after the COO had met with the Contractor or the Contractor's representative, the COO would sometimes structure multiple cash deposits into various bank accounts he controlled. Case 4:20-cv-03256 Document 1 Filed on 09/18/20 in TXSD Page 4 of 6 CO}{CLUSION 15. Under the totality of the circumstances, it is believed that the Defendant Properties are subject to forfeiture under 18 U.S.C. $ 981(a)(1)(C) as property which constitutes or is derived from proceeds traceable to specified unlawful activity. NOTICE TO ANY POTENTIAL CLAIMANTS YOU ARE TIEREBY NOTIFIED that if you assert an interest in any of the Defendant Properties which are subject to forfeiture and want to contest the forfeiture, you must fi1e a verified claim which fulfills the requirements set forth in Rule G of the Suppiemental Rules for Admiralty or I$aritime Clairns and Asset Forfeiture Actions. The verified claim must be filed no later than 35 days from the date this Complaint was sent to you in accordance with Rule G(a)&); or, if this Complaint was not sent to you, no later than 60 days after the flrst day of publication of notice on an official internet goyeflrment forfeiture site, in accordance with Rule G(5XaXii)G). An answer or motion under Rule 12 of the Federal Rules of Civil Procedure rnust be filed no later than twenty-one (21) days after filing the claim. The claim and answer must be filed with the United States District Clerk for the Southern District of Texas, whether eleckonically or at the United States Courthouse, 515 Rusk Avenue, Houston, Texas 77002. A copy must be sent to the undersigned Assistant United States Attorney at the United States Attorney's Office, 1000 Louisiana, Suite 2300, Houston, Texas 77A02. Case 4:20-cv-03256 Document 1 Filed on 09/18/20 in TXSD Page 5 of 6 REqUESTED RELIEF The United States will who reasonably appears to be serve notice, along with a copy of the Complain! on any person a potential claimant in this matter. The United States seeks a final judgroent forfeiting the Defendant Properties to the United States and any other relief to which the lJnited States may be entitled. Respectfully submiffed, RYAN K. PATRICK United States Attomey Kristine E. Rollinson SDTX Federal No. 16785 Assistant United States Attorney 1000 Louisiana, Suite 2300 Houston, Texas 77002 Telephone (7 13) 567-9000 Case 4:20-cv-03256 Document 1 Filed on 09/18/20 in TXSD Page 6 of 6 Yerification I, Andy C. Liq a Special Age,lrt with the United Stat€s Fedsral Bureau of Investigation, declare under the pmalty of perjury, as provided by 28 U.S.C. $ 1746, that I have read the foregoiag Verified Complaint for Civil Forfeiture In Rem and Notice to Potential Claimants, alrd that the facts stated in paragraphs 3 tkdugh 5 and 8 through 14 of the Complaint are based upon my persoual knowledge, upon information obtained from other law enforcemeat personnel, or aad correct upon infornation I obtaiaed in the course of my investigation Those to the best of my lmovrledge and belief. Executedoathe {1 aayof Se,ptember 2020. Liu Special AgEnt Federal Bureau of .Iavestigation