Transcript of statement read by Jose R. RodrÃguez on April 1, 2009
Good morning,
In 2007, shortly after details of the FBI investigation on allegations of illegal activities of county officials became public, I said the County Attorney’s Office would monitor very closely the unfolding of the investigation to review any contracts where the County of El Paso may have been damaged by any criminal wrong doing. I promised we would try to remedy, by all legal means available, the negative economic impact that County residents may have suffered because of such criminal conduct.
Today, with that promise in mind, I am announcing that the El Paso County has filed two different lawsuits related to a land sale featured prominently in the guilty plea of former County Commissioner Elizabeth “Betti” Flores.
The first is a civil lawsuit filed in federal court against Luther Jones, David Escobar, Betti Flores, and current and former members of the corporation Americas Loop 375 to include Robert Bowling III. This suit seeks monetary relief for the damage caused by the alleged acts that we believe fraudulently induced the sale of a piece of County land.
The second is a civil lawsuit filed in County Court at Law # 7 that seeks to void a transaction known as the “Catalina Development Land Settlement.”
Before I go over each of the lawsuits, let me briefly explain the history behind this land sale.
In 1993 the County decided to sell almost 382 acres of land located in far-east El Paso. In October 1994 Commissioner’s Court voted to sell the land to Catalina Development, but the sale was never completed. Catalina Development sued the County for breach of contract, but later a County Court at Law dismissed the lawsuit. The County prevailed all the way to the Texas Supreme Court. That is when Tropicana and Carefree Homes purchased Catalina Development’s interest in the lawsuit. The Trustee of this new joint venture, David Escobar, threatened to take the case to the United States Supreme Court and made the County an offer to settle the lawsuit.
Against the recommendation of the County Attorney's Office, Commissioner’s Court accepted the settlement in December 2003. Three and a half years later, former County Commissioner Betti Flores pled guilty to a six-count Federal information where she admitted that she conspired to receive money and other benefits in exchange for her vote “to settle a lawsuit against the County of El Paso over a tract of land owned by the County of El Paso and to sell the land to clients of another...” The lawsuit referenced in the information is the Catalina Development lawsuit.
The County has filed two distinct lawsuits arising from what the County alleges was the fraud that induced the settlement in the Catalina Development lawsuit.
The first lawsuit, filed in federal court, seeks monetary damages arising from the actions of Betti Flores and others. The federal Complaint alleges three causes of actions: Civil Racketeering Influenced and Corrupt Organization or RICO claim, Civil Conspiracy, and Unjust Enrichment.
It is important to distinguish each cause of action and the defendants cited in each cause. Not every defendant is alleged to be involved in each cause of action.
In the first cause of action, Civil RICO, the County alleges Luther Jones, David Escobar, Martie Jobe and Betti Flores formed an enterprise directed at racketeering activities, to include bribery. The County alleges the racketeering enterprise was furthered for the financial benefit of Jones, Escobar, Jobe and Flores at the expense of the County of El Paso and its citizens.
A RICO claim requires not just one occasion of wrongdoing; it will be up to the County to show Luther Jones, David Escobar, Martie Jobe and Betti Flores engaged in a pattern of racketeering activities.
To that effect, and in addition to the fraud alleged to have been committed in the settlement of the Catalina Development lawsuit, the County alleges these defendants engaged in racketeering activity to settle a lawsuit referred to as the 15-minute lawsuit.
The 15-minute lawsuit was a class action lawsuit against the County of El Paso brought by members of the El Paso County Sheriff’s Office regarding overtime pay. The County alleges Luther Jones and David Escobar secured Betti Flores’ vote to settle the lawsuit brought by the officers with Martie Jobe serving as their counsel.
Additionally, the County alleges Luther Jones, David Escobar, Martie Jobe and Betti Flores once again engaged in racketeering activities with regard to the work schedules and overtime pay for Sheriff’s officers under the Fair Labor Standards Act (FLSA) 207K provision.
The last racketeering activity alleged by the County was the attempt to influence through bribery and fraud the awarding of a bid for the digitization of court records to a particular vendor. Here, the County alleges involvement by Luther Jones, Martie Jobe and Betti Flores.
In the second cause of action, Civil Conspiracy, the County alleges Luther Jones, David Escobar, Betti Flores and Robert Bowling III conspired to defraud the County into settling the Catalina Development lawsuit. The allegation is that Betti Flores agreed to receive monies and other benefits from David Escobar and Robert Bowling III in exchange for Flores’ vote to settle the lawsuit.
Whereas Robert Bowling III is a defendant in the Civil Conspiracy claim, he is not a defendant in the RICO claim because he is not alleged to have been involved in a pattern of activity. The Catalina Development lawsuit is the only incident in which the County is claiming Robert Bowling III had involvement.
As for the third cause of action, Unjust Enrichment, the County contends the defendants financially benefited as a result of the fraud plead to by Betti Flores. This cause of action relates to all defendants listed in the style of case, except for Martie Jobe. Under an unjust enrichment claim, a person or entity does not have to be found to have directly committed any wrongdoing; it only has to be shown that they benefited from the wrongdoing. In this case, it is alleged the defendants benefited from the fraud and sale of County land for less than the true market value of the land.
The second lawsuit was filed in County Court at Law No. 7 because it is the Court in which the Catalina Development settlement agreement was entered. The basis of the state suit is that the criminal conduct admitted to by Betti Flores essentially voids the original settlement agreement and therefore the County is entitled to recover some of the land it sold.
It is critically important for everyone to know and understand, there has been development on the land in question. A school has been built and homes have been purchased. The County in no way is seeking title to any of those homes or school. The County in fact is seeking to ensure that those homes and school are protected.
In the state petition the County is making 3 requests:
The land that has not been sold should be returned to the County.
Profits made by the defendants from the sale of land should be paid to the County.
No third person or entity that has bought property from within the tract of land should be adversely affected.
As County Attorney for El Paso County, my principal duty is to protect the interests of the County and its residents. I take that obligation very seriously and understand, along with the El Paso County Commissioners Court, the seriousness of the claims that the County is asserting today.
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