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Sunday, August 31, 1997

Former school district tax collector charged with embezzling $800,000

McALLEN, Texas (AP) -- A former tax collector for the McAllen school district has pleaded innocent to federal charges that he embezzled more than $800,000.

Jesus Gonzalez was released on $50,000 bond shortly after his Friday arraignment before a federal magistrate.

Gonzalez is set to appear before a district judge Oct. 6. If convicted, Gonzalez could face up to 13 years in prison and $350,000 in fines.

He also may be held liable for the entire amount he is alleged to have embezzled, said Assistant U.S. Attorney Robert Wells. A recent school district audit showed that more than $1 million in tax money was missing.

The government alleges that Gonzalez stole $835,834 of tax money between July 1, 1993, and June 30, 1995, and did not report the amount on his income tax return.

A federal grand jury in McAllen indicted Gonzalez Tuesday on two counts of fraud and false statements and two counts of theft concerning a program receiving federal funds.

Gonzalez resigned from office in June 1996 amid accusations that he misappropriated funds. He had served as tax assessor and collector for 14 years, with his office collecting about $45 million a year for the school district and the city.

"It was a very intricate system he had devised," Wells said. "He could account for a lot of money he took."

Defense attorneys Joe Warren Friend Jr. and Jack L. Wolfe declined comment Friday.

County court documents in a related civil case alleged Gonzalez took money from rollback taxes and double payments.

When agricultural property is rezoned as commercial property, owners must pay a higher rollback tax that is retroactive for five years. Since school districts and cities don't budget for receiving those funds, Gonzalez could keep the money and nobody would know the difference, said City Attorney Jim Darling.

Several routine audits never caught the discrepancies, Wells said.

After his resignation, the office was disbanded. The school district hired the county to collect its taxes, and the city created its own office.

Both entities filed suit last year against Gonzalez.

At the same time, the FBI and the Internal Revenue Service conducted their own investigations. An IRS spokesman said the agency has completed a six-month investigation but declined to comment on the case.

School officials on Friday welcomed Gonzalez' arraignment.

"The federal investigation has been coming down for some time, so we've been waiting for this to happen," said Superintendent Robert Schumacher.