OIG: Office of Inspector General
   Current Section

Investigative Report

U.S. Department of Justice
Donald J. DeGabrielle, Jr.
United States Attorney
Southern District of Texas


January 9, 2007

P.O. Box 61129
Houston, TX 77208

Telephone 713-567-9000
Public Inquiry Line - 713-567-9535
Fax 713-718-3300
Website: http://www.usdoj.gov/usao/txs

Former South Texas Vocational Institute President Pleads Guilty to Taking Title IV Education Funds Meant for Needy Students

(BROWNSVILLE, TX) United States Attorney Donald J. DeGabrielle, Jr., announced the guilty plea of Reynaldo Garcia, age 45, of Brownsville, Texas. Garcia entered guilty pleas Monday to six felony counts including four counts of Misapplication and Failure to Refund Title IV Funds and two counts of Making and Using A False Writing or Document. Defendant entered the pleas before U. S. Magistrate Judge John Black.

Information submitted to the court indicated that in 2002, the Department of Education (ED) conducted a routine audit of South Texas Vocational Institute (STI) located in Brownsville, Texas. A criminal investigation was initiated when the audit revealed the misapplication of Title IV education funds obtained by fraud and false statements, and the failure to refund said funds. Garcia was the president and owner of STI, a school providing post-secondary education and training in technical and vocational fields.

The investigation revealed defendant had failed to refund or disburse education funds provided the school by ED and he had submitted false certification documents to the Department of Education. The education funds, including Pell Grants, were intended for financially needy students to obtain grants to meet the costs of their post-secondary education. Garcia was to have refunded or disbursed these education funds in the cases of approximately 79 STI students. Garcia stated to agents he did not make the refunds and disbursements because he was "having financial problems." An internal review of the school's financial records show he withdrew over $300,000.00 for personal expenses during this time. Agents learned Garcia signed and submitted false or fictitious certifications to the U. S. Department of Education indicating no refunds were due to the Department of Education and to students. This enabled defendant to obtain government Pell Grants (Title IV funds) which STI was not entitled to receive. Garcia knowingly submitted false certifications on October 29, 2001, December 10, 2001, January 10, 2002 and February 15, 2002.

Federal District Judge Micaela Alvarez, from Laredo, will sentence defendant on April 2, 2006. The convictions for each of the counts carry a punishment of up to 5 years imprisonment and a fine of up to $250,000.00.

This case was investigated by the U. S. Department of Education Office of Inspector General and prosecuted by Assistant United States Attorney Oscar Ponce.

Print this page Printable view Send this page Share this page
Last Modified: 01/10/2007