Central Texas Army veterans plead guilty in multi-million-dollar fraud scheme
WACO, Texas (KWTX) – Army veterans Kevin Romulus Pelayo, 42, and Cristine Furio Fredericks, 37, who are accused of using a transportation reimbursement program to swindle the Army out millions of dollars pleaded guilty Tuesday in U.S. District Court in Waco to two counts of engaging in monetary transactions with criminally derived property.
Pelayo also pleaded guilty to one count of conspiracy to commit wire fraud.
Pelayo and Fredericks each faces as much as 10 years in prison for each money laundering charge and Pelayo faces as much as 20 years on the conspiracy charge.
The two agreed to forfeit proceeds from the scheme including a dozen real estate properties in Killeen, Harker Heights, Copperas Cove and Kempner; 43 automobiles, SUVs, ATVs and a 5th-wheel trailer; more than 120 designer tote bags, handbags, and wallets; and more than $600,000 in cash.
In July 2020 federal agents seized more than 20 vehicles and money from 10 bank accounts belonging to the two.
The Department of the Army launched the benefit program in January 2001 to subsidize commuting costs incurred by soldiers and civilian employees who use mass transportation and van pools.
By pleading guilty, prosecutors said, Pelayo and Fredericks admitted they provided false documentation regarding their ride-share program, Soldiers Vanpools LLC, from January 2014 to June 2020 including the names and personal information from more than 1,000 unsuspecting active-duty soldiers to fraudulently collect Department of Transportation Benefit Program funds.
Sentencing dates have not been set.
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