Department of Justice
U.S. Attorney’s Office
Eastern District of Texas
FOR IMMEDIATE RELEASE
Tuesday, October 29, 2019
Central Texas Lawyer Guilty of Swindling Colombian Drug Trafficking Clients
SHERMAN, Texas – A Central Texas criminal defense lawyer was found guilty of federal violations related to an international fraud scheme involving his Colombian cocaine trafficking clients, announced U.S. Attorney Joseph D. Brown and FBI Special Agent in Charge Matthew J. DeSarno of the Dallas Field Office today.
James Morris Balagia, 62, of Manor, Texas was found guilty by a jury of five federal charges today following a two week trial before U.S. District Judge Amos Mazzant.
According to information presented in court, Balagia, also known as Jamie Balagia, also known as The DWI Dude,
DUI Dude Van
had a law practice with offices in San Antonio and Manor specializing in defending clients charged with violations such as driving while intoxicated and drug possession. In 2014, Balagia conspired with Florida private investigator, Chuck Morgan, and Colombian attorney, Bibiana Correa Perrea to swindle Colombian drug traffickers under the guise of bribing officials in the United Sates. During meetings in Colombia and in Collin County, Texas, the group represented that in exchange for inflated “attorney fees,” they were in contact with government officials in the United States who would accept bribes resulting in either the dismissal of their criminal charges or significant reductions in their U.S. federal prison sentences. In reality, there were no bribes or government officials.
The Office of Foreign Assets and Control (OFAC) had previously designated Balagia’s Colombian clients as “Specially Designated Narcotics Traffickers.” These individuals were considered some of the biggest drug traffickers in the world. As such, they were on an OFAC list, essentially freezing their assets and prohibiting U.S. persons from engaging in any financial transactions or dealings with them unless they had received an OFAC license. In order to comply with federal requirements under the “Kingpin Act,” Balagia was advised to obtain an OFAC license on multiple occasions but failed to do so.
As part of the scheme, Balagia provided Colombian co-conspirators with his personal bank account number and routing number. Evidence at trial showed multiple deposits over several months into the account in amounts intended to avoid federal cash transaction reporting requirements. The cash deposits were made at bank counters across the United States by anonymous individuals with daily deposits totaling just under the $10,000 reporting threshold. Additionally, at least four bulk cash payments were made to Balagia in amounts ranging from approximately $70,000 to $120,000. Balagia admitted to driving from his San Antonio office to a mall parking lot in Katy, Texas, where he was given a shopping bag filled with bundles of cash from either an unknown individual, or an individual who identified himself only as “Coco.” In an attempt to conceal these payments, Balagia failed to report the payments as required by federal law.
Balagia was indicted by a federal grand jury on Dec. 15, 2016. Bibiana Correa Perea pleaded guilty and was sentenced to 84 months in federal prison on June 29, 2018. Chuck Morgan pleaded guilty and was sentenced to 72 months in federal prison on Mar. 8, 2018.
Balagia was found guilty of conspiracy to commit money laundering; obstruction of justice, violation of the Kingpin Act; conspiracy to commit wire fraud; and conspiracy to obstruct justice.
“This defendant-and his group-were running a scam on drug dealers – some of the biggest drug dealers in the world,” said U.S. Attorney Joe Brown. “Fortunately for him, these drug dealers chose to turn him into the FBI rather than handle it any other way. It is important for the American justice system that we prosecute those who represent that the justice system is for sale. The Colombians, and criminals in every other country that we deal with, need to understand things don’t work that way in the United States. When we have lawyers representing that officials can be bought, we take that very seriously.”
“The defendant used his position as an attorney to not only steal from drug lords, but also to sell out the U.S. justice system in order to line his own pockets,” said FBI Special Agent in Charge Matthew J. DeSarno of the Dallas Field Office. “The FBI prioritizes all cases of public corruption and we will continue to hold these officials accountable for using their positions to benefit financially.”
This case is the result of an extensive joint investigation by the Organized Crime Drug Enforcement Task Force (OCDETF). The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Under the federal sentencing guidelines, Balagia faces up to 30 years in federal prison. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.
This case was investigated by the Federal Bureau of Investigation’s Dallas Field Office – Frisco Resident Agency and prosecuted by Assistant U.S. Attorneys Heather H. Rattan and Jay Combs.