Mexican resident pleads guilty to double broker scheme

A Tijuana resident pleaded guilty in a federal court to four counts of wire fraud stemming from a double broker scheme to defraud interstate carriers and brokers operating in California.

On Oct. 6, Alexis Castillo Padilla pleaded guilty in the U.S. District Court for the Southern District of California. Castillo is accused of operating a double broker scheme.

According to the indictment filed in May 2019, Castillo falsely represented himself to be SIA Carriers, a legitimate interstate carrier in Spring Valley, Calif.  Identifying himself as being with SIA Carriers, Castillo established an account with Illinois-based broker Coyote Logistics.

After establishing the account, Castillo agreed to transport at least 122 loads of freight for Coyote. Castillo then posed as a shipper and hired brokers to retain other carriers to deliver the loads. He also posed as a broker and hired other carriers to deliver the loads.

Once the other carriers delivered the Coyote loads, Castillo provided proof of delivery to Coyote.

In total, Coyote paid Castillo nearly $250,000 during the double broker scheme.

Castillo kept most of those payments. He either did not pay or only paid a small part of the fee he owed to the other brokers and carriers. One broker was not paid more than $186,000 owed to it by Castillo.

Furthermore, Castillo knowingly used, without lawful authority, a means of identification of another person in the double broker scheme. Specifically, Castillo provided fraudulent corporate income tax return documents that named and contained the signature of one of his associates as the paid preparer. However, the associate did not know Castillo had used his name or signature.

Castillo was charged with four counts of wire fraud and one count of aggravated identity theft stemming from the double broker scheme. According to the U.S. Department of Transportation’s Office of Inspector General, Castillo orchestrated most of the scheme from Tijuana, Mexico. In March 2022, Castillo was arrested in Italy and subsequently extradited to the United States. He pleaded guilty to the four counts of wire fraud.

Sentencing is scheduled for Jan. 6, 2023. LL