Feds: Edinburg company linked to Mexican oil smuggling

An Edinburg gas company has joined the growing list of U.S. businesses linked to selling petroleum stolen from Mexico’s state-run oil monopoly.

Arnoldo Maldonado, of Y Oil and Gas, pleaded guilty Friday to one count of conspiring to receive and sell stolen natural gas condensate — a petroleum precursor — illegally tapped from pipelines run by Petróleos Mexicanos, more commonly known as Pemex.

His company — headquartered near the intersection of State Highway 107 and North Shary Road — did not return phone calls for comment Saturday. His attorney Fela B. Olivarez also could not be reached.

But according to filings in a Houston federal court, Maldonado — from January to March — arranged three separate shipments of condensate he knew to be stolen. Using 22 tanker trucks, the company shipped the purloined product through unspecified land crossings with the intent to sell it to larger businesses in the oil and gas trade.

Maldonado’s arrest last week makes him the second Texas oil executive to face criminal charges in the 2-year-old investigation.

In May, Donald Schroeder, president of Houston-based Trammo Petroleum, pleaded guilty to purchasing millions of dollars in stolen condensate and arranging for it to be shipped north on barges departing from the Port of Brownsville.

He told federal prosecutors that representatives from two firms — Houston-based Continental Fuels and Murphy Energy, a company headquartered in Oklahoma — offered him condensate they said was stolen. Schroeder bought it and resold it to other companies, including German chemical giant BASF.

As part of his plea agreement, he agreed to reimburse the Mexican government $2.4 million. But that sum — returned by U.S. Immigration and Customs Enforcement agents last month — is only a drop in the $2 billion bucket that Pemex officials estimate they lose each year to theft.

For years, criminals south of the border have siphoned off thousands of gallons from government-run pipelines using highly sophisticated techniques such as tunneling under existing pipes and in some cases building their own separate pipelines.

In 2008 alone, Pemex found nearly 400 illegal connections in rural states like Tamaulipas, Veracruz and Nuevo León.

Tamaulipas state police arrested nine men in Reynosa earlier this year on suspicion of transporting stolen condensate across the border with help from the Zetas, a Miguel Alemán-based drug cartel that has recently expanded into other criminal rackets.

Within months, U.S. federal investigators began zeroing in on those buying the $46 million in stolen oil.

In addition to the companies managed by Maldonado and Schroeder, ICE agents have seized bank accounts operated by Continental Fuels and Valley Fuels Ltd., a San Antonio-based firm that operates offices in McAllen, Houston and Washington, D.C.

Prosecutors have also subpoenaed shipment records from larger companies that bought stolen condensate, including Murphy Energy and BASF, the largest chemical company in the world.

All four companies are cooperating with the investigation.

But at an August news conference, Assistant U.S. Attorney Jim McAlister cautioned it was too soon to tell which, if any of them, knew they were dealing with stolen product.

"Some of the companies were aware that the product was stolen; some were not," he said. "We’re having to weed out which ones did and which ones didn’t."

Maldonado and Schroeder each face up to five years in prison and fines of up to $250,000 at sentencing hearings scheduled for January and December, respectively.