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Killeen couple sentenced by federal officials for defrauding Army with a rideshare company

Posted at 2:49 PM, Jun 11, 2024

WACO, Texas (KXXV) — Federal authorities have sentenced a Killeen couple for fraud after they were found guilty of operating an illegitimate rideshare service for soldiers.

45-year-old Kevin Romulus Pelayo and his wife, 40-year-old Cristine Furio Fredericks, were sentenced in a federal court in Waco.

The U.S. Attorney's Office of the Western District of Texas said Pelayo and Fredericks defrauded the Department of the Army transportation program by illegally obtaining the personal identification information of more than 800 soldiers.

Court documents said Pelayo and Fredericks co-owned and operated a rideshare company called Soldiers Vanpools LLC—a company that claimed to shuttle military members to and from Fort Cavazos from January 1, 2014 through June 10, 2020.

Federal officials said Soldiers Vanpools LLC was funded by the Army's Mass Transportation Benefit Program, or MTBP.

Personal information—such as names and social security numbers—of active duty military personnel was submitted by the couple on a monthly basis to the MTBP from 2014 to 2020. Federal officials said Pelayo and Fredericks were falsely claiming that these soldiers actively participated in their rideshare services.

In order to convince the MTBP of their company's legitimacy, federal officials said the couple bought vans, SUVs, and other vehicles that were supposed to be used to transport soldiers.

Federal officials said the couple received millions of dollars in funding which they spent on real estate, personal vehicles, and other property.

The couple purchased 43 vehicles, 129 purses and jewelry items, and 12 real properties in Bell and Coryell Counties, federal officials said.

Special Agent in Charge Lucy Tan with the IRS Criminal Investigations said:

"Prison is a good punishment for Pelayo, but going to prison doesn't recover the losses, which is why we seized a significant number of assets, including $600,000 in cash, a fleet of cars, and plenty of real estate. Now that Pelayo and Fredericks are sentenced, the court may issue the final forfeiture notice. Following the money doesn't just put criminals behind bars, it also helps recover some of the funds they stole."

Pelayo will serve a sentence of 36 months in prison on one count of conspiracy to commit wire fraud and two counts of engaging in monetary transactions in criminally derived property.

Fredericks was sentenced to five years of probation on two counts of engaging in monetary transactions in criminally derived property.