El Paso county to restart $18M civil RICO suit [El Paso Times, Texas]

Jan. 22--A federal judge has ordered the county to resume a civil $18 million racketeering suit against three defendants after they were convicted of criminal charges.

The county's attorneys are pursuing a case that seeks to collect as much of the money as possible from attorney David Escobar, former state Rep. and County Judge Luther Jones, and former County Commissioner Betti Flores. Each has been convicted of public corruption and the county is seeking to recoup funds from what it says were their corrupt schemes.

U.S. District Judge Kathleen Cardone stopped the case in January 2010 as criminal cases against Escobar and Jones made their way through the courts. But in October, after Escobar -- the last of these three defendants -- pleaded guilty, Cardone issued an order to re-start the racketeering suit.

Several developers, whom the county had accused of paying Flores in 2007 to support selling them land for less than it was worth, have been dropped from the suit. The developers, who admit no wrongdoing, settled the case in 2010, after paying the county $600,000 and going through court-ordered arbitration.

Also in 2010, the county dismissed its suit against local lawyer and former County Commissioner Martie Jobe, although it reserved the right to refile the suit if "significant admissible evidence of Jobe's culpability comes to light during the trial of the criminal cases or the ongoing federal public-corruption investigations..." the settlement agreement

says.

The county is suing Jones, Escobar and Flores over four separate matters:

-- Catalina development: A 304-acre parcel east of Loop 375 that had been owned by the county. In its suit, the county had accused Tropicana Homes owners Robert Bowling III and Robert Bowling IV of conspiring with Jones, Escobar and Flores to buy the tract for less than half its actual value, $6.7 million. But Carefree Homes, a joint venture including the Bowlings, Jones, Escobar and Frank Arroyos, ended up buying the land for its appraised value.

The developers "have adamantly denied any and all alleged liability or wrongdoing, and whereas the county maintains its claims were brought for the benefit of its citizens and in good faith..." the Oct. 10, 2010 settlement agreement says.

-- 15-minute lawsuit: The county claims that Flores in 2004 was paid for her vote to settle a 2002 lawsuit over overtime pay that was filed by Jobe on behalf of the El Paso Sheriff Officers Association. Flores voted to pay the association $635,000 that the county claims was unnecessary.

-- Extra pay for sheriff's employees: The suit says that in exchange for free legal representation by Travis Ketner, who also has pleaded guilty to corruption, Flores voted to waive one of the county's rights under the Fair Labor Standards Act. The waiver cost the county $2.2 million in unnecessary pay to sheriff's employees in 2006 and 2007, the suit says.

-- County digitization contract: The lawsuit claims that Flores received a $1,000 campaign contribution in exchange for voting to award a contract to digitize court records to a company that had hired Jones and Jobe as consultants. Former District Clerk Gilbert Sanchez, who also is in federal prison after a corruption conviction, admitted leaking confidential bid documents to Jobe. The contract was never issued.

Since the suit is filed under the federal Racketeering Influenced and Corrupt Organizations law, it's entitled to treble damages -- or $18 million -- the suit says. It's unclear, however, whether any of the remaining defendants in the suit has that much money.

Flores pleaded guilty in July 2007 to six counts of mail and wire fraud and admitted trading her votes for money. She has not been sentenced.

Jones was convicted in 2011 of attempting to rig the digitization contract. Jones was sentenced to six years in prison.

Jones and Escobar also pleaded guilty last year to their roles in a scheme to corruptly steer $100 million in government-employee health insurance business to Access HealthSource. They'll be sentenced on Feb. 20.

Marty Schladen may be reached at mschladen@elpasotimes.com; 546-6127.

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