The Details of the Texas Pacifico Railroad Theft Ring Revealed

Six chock-full binders, several manila folders and an expandable file fill a 10-ream printer paper box next to SAPD Detective Lynn Dye’s desk, another one-inch three-ring and a full three-inch binder stacked precariously on top.

Dates, locations and pricing for items such as railroad ties and crossovers fill countless pages, data collected as part of a yearlong investigation into an elaborate theft scheme involving at least three former Texas Pacifico employees, three outsiders and a company called JCB Derailment and Construction Corp.

Nearly a year after the detective started the labor-intensive investigation he’s still on the case, and now the six original key players have been indicted on felony theft charges, and engaging in organized criminal activity, all charged by a Tom Green County grand jury last week.

The indictments include third-degree felony theft charges filed against 43-year-old Edgar Arias, who when the investigation started was employed by Texas Pacifico and was responsible for supervision along with line inspectors Benjamin Delarosa, 39, and Ernesto Valero, 35, also indicted this month.

According to detective Dye, the indicted individuals conspired to commit theft by misappropriating railroad assets and labor, providing contracts to private companies along the Texas Pacifico rail line. One of those companies was Pro Sand (now Pinnacle Sands), and 47-year-old Terrell Pankey, the former Chief Operating Officer, was found to have monetarily benefitted from the scheme. 

Also in on the deal were Arias’ wife, 37-year-old Janet Briones, and Delarosa’s sister, 35-year-old Raquel Zapata, who both benefitted from the scheme as agents for JCB Construction and are accused of having cut several checks for payment after the businesses had paid for the work. Both have also been indicted for the involvement in the scheme and are also facing felony charges.

The Scheme

One of the companies Texas Pacifico contracts with for labor is Balfour Beatty, a multi-national infrastructure group that provides full-time work crews to do line maintenance and repair in San Angelo under the supervision of Texas Pacifico line maintenance inspectors. It is is believed that the six misappropriated these crews to do their work on private contracts.

One of the jobs the six are accused of pulling off included the construction of a new spur and switches at Pro Sand (now Pinnacle Sands) on Hughes St. between December 2013 and January 2014, a complaint states.

Detective Dye went to speak with Pinnacle Sands Chief Operating Officer Mike Keller, who explained that he’d taken over the position near the end of 2013 from Terrell Pankey, who had previously been in charge of operations.

As the company began making plans to construct a new railroad spur that would allow them to receive train cars at their facility, Pankey told Keller he could get the switches needed for the construction of the new rail from JCB Construction for $70,000.

After agreeing to purchase the materials and have the construction performed by JCB Construction, the $70,000 was wired to a JCB bank account on Dec. 9. Later on in the investigation, when Dye obtained a search warrant for Arias’ bank accounts, he noted a $70,000 wire transfer had been made to the account on Dec. 9, and that on the following day Terrell Pankey was issued a $5,000 check from JCB Construction, signed by Janet Briones.

As they prepared for construction,  “Keller advised that he met with a representative of JCB Construction, Edgar Arias, Ben Delarosa, Federico Diaz and Terrell Pankey at a meeting discussing the construction of the spur and switches at the Pinnacle Sands yard…” Dye wrote in his complaint.

Keller later told Dye that he believed Delarosa, Diaz (also a Texas Pacifico employee) and Arias were present representing Texas Pacifico, but didn’t know the name of the person who presented himself as the president of JCB Construction, the complaint states. Diaz has never been brought up on any charges.

On February 25, 2014, JCB Construction was registered as a corporation with the Texas Secretary of State. The director of the company at the time was listed as Edgar Arias, and the registered agent on the certificate of formation was local criminal defense attorney Joe Hernandez.

Although Arias had put down an address on Twohig as his mailing address, multiple different physical locations turned up in searches for the company, including the homes of several of the six involved in the scheme, their parent’s houses and Joe Hernandez’s 508 W. Concho office.

Hernandez, who was recently named as the whistleblower on bail bondsman Ray Zapata in a will forgery case, served as Arias’ criminal defense attorney during proceedings in May 2014 on a cocaine possession charge for which he was sentenced to two years probation. Arias was still on probation when the investigation into JCB and Texas Pacifico began in July 2014.

Hernandez was reached by phone on Wednesday afternoon, however it took him only 13 seconds of conversation to say, “I have no comment at all”.

Ray Zapata, whose office location is also listed as 508 W. Concho, bailed out four of the Texas Pacifico six when they were arrested on Dec. 2 last year, including Benjamin Delarosa, Raquel Zapata, Janet Briones and Edgar Arias. Ernesto Valero was bailed out by Angelo Bail Bonds; Terrell Pankey chose Jenkins A Action. Zapata is also employed by Jenkins.

It was four months before their cases were brought to grand jury, and by then detective Dye and Texas Ranger Philip Kemp had turned up mounds of evidence, including phone records and text messages between Delarosa, Arias and Valero from December 2013 and January 2014 in which they discuss a new track at Pinnacle Sands on their work-issued phones from Texas Pacifico, the complaint states.

Make, model and manufacture dates of materials located at Pinnacle Sands and other businesses had been matched up to identical items at the Texas Pacifico yard, some stamped with numbers indicating Texas Pacifico’s main line on plates affixed to switches, the complaint states.

Edgar Arias, whose role appeared to be one of the most significant in the scheme, was indicted on two counts of third-degree felony theft of property greater than $20k but less than $100k. Terrell Pankey was indicted on the same two counts.

Benjamin Delarosa also been charged with one count of third-degree felony theft, but his second charge, a state jail felony, accuses him of stealing more than $1,500 but less than $20k.

Raquel Zapata has only been charged with the third-degree felony theft, punishable by two to 10 years in prison and a fine not to exceed $10k, while Ernesto Valero has been charged only with the state jail felony theft, punishable by 180 days to two years in jail and an optional fine up to $10k.

Zapata and Delarosa have retained Gonzalo Rios as their defense attorney. Valero has retained Andrew Graves. Neither Arias or Pankey have an attorney listed on their records.

Bryan Clayton will prosecute all of the cases.