In a federal court in San Antonio, a California man, Hector Barreto, 62, from San Juan Capistrano, and his co-conspirator, Miguel Gutierrez, 49, were sentenced for conspiracy to commit wire fraud. Barreto received a 20-month prison sentence and was ordered to pay $944,693.51 in restitution, along with a $100,000 fine. Gutierrez received a 10-month prison term, as a condition of five years probation. He was also ordered to pay a $100,000 fine and $1,194,439.51 in restitution. A restraining order has been imposed on both defendants to oversee their assets until victims are fully compensated.
Court documents revealed that Barreto, a former Small Business Administrator under President George W. Bush, and Gutierrez operated a charity called the Latino Coalition Foundation. Barreto controlled the charity's bank accounts and had operational control. The duo solicited donations, ostensibly for establishing an apprenticeship program benefiting low-income youth by providing job training and skills. However, they diverted the charitable funds for personal use, including direct and indirect payments, using the charity's credit cards for personal expenses, and payments to friends and family. To conceal the misappropriation, Barreto and Gutierrez falsified the IRS Form 990s to create a false appearance of not receiving payments from the charity.
Gutierrez pleaded guilty in July 2022 to conspiracy to commit wire fraud and filing a false tax return, while Barreto pleaded guilty in April 2023 to conspiracy to commit wire fraud and conspiracy to defraud the United States.
U.S. Attorney Jaime Esparza for the Western District of Texas emphasized the importance of trust in the charity system and stated that the defendants were sentenced for betraying that trust. Acting Special Agent in Charge Doug Olson for the FBI San Antonio Division highlighted the severity of the crimes, while Assistant Special Agent in Charge Rodrick Benton for IRS Criminal Investigation’s Houston Field Office emphasized the erosion of public trust in tax-exempt organizations due to such schemes.
The FBI and IRS Criminal Investigation jointly conducted the investigation.
