A Miami businessman has been sentenced to nearly four years in prison for defrauding the U.S. government’s Export-Import Bank of more than $24 million through bogus loans, the U.S. Department of Justice announced this week.

Guillermo Mondino, owner of Miami-based foreign export company Texon Inc., pleaded guilty last year to one count of conspiracy to commit mail fraud and one count of money laundering, and was sentenced this week. In addition to his sentence, Mondino will repay $16 million.

Here’s how his scheme worked, according to federal court documents:

Between 2003 and 2009, Texon helped foreign buyers obtain as many as 24 private loans to purchase U.S. goods, using falsified documents and invoices to claim government guarantees from the Export-Import Bank.

The Export-Import Bank is an independent federal agency that provides financing mechanisms to help foreign buyers purchase goods and services from U.S. companies.

In the case of Texon, which specializes in exporting heavy equipment and machinery, the Export-Import Bank provided $24 million in loan guarantees to private banks that lent money to buyers in Latin American and Caribbean countries. When those buyers defaulted on the loans, the Export-Import Bank had to pick up the tab.

In one case, Mondino helped a buyer based in the Dominican Republic create false loan documents and invoices in order to receive more than $100,000 in loans that eventually went into default, court records show.

The U.S. government has already lost $12.5 million from the scheme, and there is another $9 million in federally guaranteed loans that are likely to default when payments come due in the future, court records show.

Rather than use the loan proceeds to purchase equipment, the foreign buyers often received cash payments from Mondino and his co-conspirators, contrary to loan requirements. In some cases, the goods that foreign buyers listed on their loan applications were never shipped. In other cases, less expensive goods were shipped.

Mondino, a 48-year-old born in Argentina, sent about $6.4 million in loan proceeds to co-conspirators in Latin America and elsewhere. About $2.5 million went to Texon, a company founded in 1980. Mondino kept about $170,000 for himself, court documents show.

The scheme involved a long list of co-conspirators including foreign borrowers, suppliers, shippers, accountants and Texon’s office manager. According to court documents, Mondino’s sister and father also participated in the scheme.

As part of Mondino’s plea agreement, he must forfeit $2.7 million and pay an additional $13.3 million in restitution after his release from prison. Mondino had faced up to 14 years in prison.

“He was facing up to 168 months. The government proposed 87 months,” said Mondino’s lawyer Forrest Sygman. “He was sentenced to 46 months.”

Mondino will surrender to the authorities in January and will be admitted to a low-security facility or halfway house, Sygman said. His sentence will be followed by three years of supervised release.

Who’s keeping an eye on the dollars at the Ex-Im Bank?

According to federal prosecutors, court documents, and a plea agreement, Guillermo O. Mondino, 48, of Miami, FL was the owner of Texon Inc., an exporting company located in Miami.

When an article begins with According to federal prosecutors, court documents, and a plea agreement, you have to figure that things just aren’t going to end well, and, in this case, your intuition is on the mark. 

In order to obtain about $25 million in loans, Mondino and others allegedly conspired to defraud the Export-Import Bank of the United States (“Ex-Im Bank”) by submitting false and fraudulent information to the Ex-Im Bank. In furtherance of that conspiracy, Mondino prepared or instructed others to prepare false documents.

Export Business

A visit to Texon’s website informs us that :

México, Perú, Colombia, Argentina, Republica Dominicana, Jamaica, El Salvador, Guatemala, Costa Rica Panamá

Texon, Inc. is proud of the ability to deliver a complete package of products and services to our customers and, while the product and its value is very important, we are equally proud of our obsession with the details involved in getting the products to our customers quickly and efficiently.

Our headquarters are located in Miami, Florida and we have local agents in Colombia, Paraguay, Republica Dominicana, Costa Rica, Guatemala, Belize, El Salvador, Peru y Panama.

The Ex-Im Bank

While we’re busy visiting websites and learning all sorts of fabulous information, why don’t we stop by the Ex-Im Bank’s site and learn something about that organization:

The Export-Import Bank of the United States (Ex-Im Bank) is the official export credit agency of the United States. Ex-Im Bank’s mission is to assist in financing the export of U.S. goods and services to international markets.
Ex-Im Bank enables U.S. companies — large and small — to turn export opportunities into real sales that help to maintain and create U.S. jobs and contribute to a stronger national economy.
Ex-Im Bank does not compete with private sector lenders but provides export financing products that fill gaps in trade financing. We assume credit and country risks that the private sector is unable or unwilling to accept. We also help to level the playing field for U.S. exporters by matching the financing that other governments provide to their exporters.
Ex-Im Bank provides working capital guarantees (pre-export financing); export credit insurance; and loan guarantees and direct loans (buyer financing). No transaction is too large or too small. On average, 85% of our transactions directly benefit U.S. small businesses.
With more than 77 years of experience, Ex-Im Bank has supported more than $456 billion of U.S. exports, primarily to developing markets worldwide.

Frankly, it seems like a perfect match: Mondino is in the export business; the Ex-Im Bank facilitates loans to U.S. exporters.  What could go wrong?  Apparently, a lot!

The Conspiracy

For starters, Mondino and his co-conspirators allegedly planned to tell the Ex-Im Bank that the proceeds of the sought loans would be used to purchase U.S. goods for foreign buyers; however, in contravention of the lending program requirements, the conspirators didn’t use the funds as promised. In some cases, Mondino provided loan proceeds to borrowers in cash rather than shipping purchased U.S. goods to the borrowers. It was further alleged that Mondino commingled the loan proceeds with personal and other monies, and transferred loan proceeds to bank accounts controlled by co-conspirators. 

Federal prosecutors alleged that Texon and its related entities retained approximately $2.5 million of the loan proceeds, and that Mondino retained approximately $170,000 of the loan proceeds for his own benefit and use. Also according to plea documents, on Sept. 8, 2008, Mondino transmitted by wire approximately $217,647 of criminally derived money from a Texon bank account in Miami to the bank account of a freight forwarder in Laredo, TX.

Guilty Plea

On June 23, 2011, Mondino pleaded guilty in U.S. District Court in Washington, DC to one count of conspiracy to defraud the United States and to commit mail fraud, and one count of money laundering. Mondino faced a maximum sentence of 15 years in prison and a $500,000 fine. According to his plea agreement, Mondino  agreed to pay more than $2.7 million in forfeiture and to pay restitution in full as of the date of sentencing of more than $12.5 million.

On November 1, 2011, Mondino, 48, was sentenced to 46 months in prison, three years of supervised release, and was ordered to pay $13.3 million in restitution and $2.7 million in forfeiture.