A Killeen couple admitted Tuesday, June 29, to defrauding the U.S. Army in a multi-million-dollar scheme through a Fort Hood mass transportation benefit program.
U.S. Attorney Ashley C. Hoff, along with representatives from the Army CIC-MPFU’s Southwestern Fraud Field Office and IRS Criminal Investigation Houston Field Office, made the announcement.
According to the release, Kevin Romulus Pelayo, 42, and Cristine Furio Fredericks, 37, admitted to providing false documentation, using personal information from 1,000 unsuspecting soldiers, to collect funds from a mass transportation benefit program from between January 2014 to June 2020. Pelayo and Fredericks' ride-share program at Fort Hood was called Soldiers Vanpools, LLC.
The program that Pelayo and Fredericks took advantage of, directed in April 21, 2000 with Presidential Executive Order 13150 subject Federal Workforce Transportation, was the Department of the Army (DA) mass transportation benefit program implemented in January of 2001.
The affidavit that was filed in court before federal agents conducted a raid regarding the incident was unsealed last July.
The couple appeared before U.S. Magistrate Judge Jeffrey C. Manske and pleaded guilty to engaging in monetary transactions with criminally derived property on two counts. Pelayo also pleaded guilty for conspiracy to commit wire fraud.
The couple face 10 years in prison for each charge, with Pelayo facing up to 20 years in federal prison for the conspiracy, and will forfeit their proceeds from the scheme.
That includes their real estate properties in Killeen, Harker Heights, Copperas Cove and Kempner, 43 automobiles, SUVs, ATVs and a trailer, 120 designer bags and wallets, and over $600,000 cash.
Sentencing has not been scheduled, the investigation is ongoing and is being conducted by the Army CIC-MPFU’s Southwestern Fraud Field Office, IRS Criminal Investigation, and Texas Department of Public Safety’s Criminal Investigations Division.