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Mexican businessman indicted in fraud plot

By Guillermo Contreras - Express-News
Web Posted: 06/22/2010 12:00 CDT

The jet-setting grandson of a former secretary of defense in Mexico has been indicted in El Paso on
charges of conspiring to defraud millions of dollars from a U.S. agency aimed at helping stimulate
American exports.

Jaime Galvan Guerrero, 35, a member of a prominent family in Chihuahua state, is named in an 11-count
indictment alleging he conspired with at least five others to defraud the Export-Import Bank of the United
States.

In an unrelated case, the Export-Import Bank sustained more than $100 million in bad loans at the hands
of Andrew Maxwell Parker of San Antonio, who is serving nearly 10 years in prison for pocketing $10
million by defrauding the bank.

Galvan was arrested Thursday in Las Vegas, and was ordered detained without bond pending his transfer
to El Paso, the San Antonio Express-News confirmed.

Galvan, of Delicias, Chihuahua, is a grandson of Felix Galvan, who was the secretary of defense under
then-Mexican President Jose Lopez Portillo, Mexican newspaper stories show. Jaime Galvan also owns
ranches in Mexico and his family runs businesses important to that country's dairy production.

The June 9 indictment said a small El Paso exporting company, Valcomar, exploited at least $4 million
between 2002 and 2008 from the Export-Import Bank, which is non-taxpayer supported and backs loans
to foreign companies that traditional lenders are unable or unwilling to make. The intent is that the foreign
companies will buy products made by U.S. workers.

“It was the purpose and object of the conspiracy for (the defendants) ... to unlawfully enrich themselves by
submitting false and fraudulent information to the Ex-Im Bank through the lending banks, in order to
obtain loans guaranteed or insured by Ex-Im Bank, and to misappropriate the loan proceeds for
themselves,” the indictment said.

Valcomar and others, the indictment alleges, fed the Export-Import Bank fraudulent information so that the
agency would back private bank loans for heavy machinery for Mexican companies, including one of
Galvan's. The indictment alleges the borrowers and Valcomar split the proceeds, didn't buy U.S.
machinery and let the loans go into default, which forced the Export-Import Bank to make good on them.

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One of Valcomar's owners, Gilberto Baez Garcia was arrested last week in El Paso on charges of fraud
conspiracy, wire fraud, bank fraud, money laundering and conspiracy to launder money. He pleaded not
guilty.

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