Police Say Feds Investigating Fraud Operation with Possible Terrorist Ties
CONROE, Texas (AP) - A routine traffic stop in the small town of Montgomery has led to the discovery of a baby formula fraud operation that may be helping fund terrorist activity, police officials investigating the case said Thursday.
Montgomery police Lt. Michael White said the FBI, U.S. Customs Service and U.S. Department of Agriculture are involved in the investigation, which may span several states.
The investigation began early Saturday after police stopped four people in a rented van, clocked at 91 mph in downtown Montgomery. Two of the occupants had outstanding warrants for marijuana possession and speeding, police said.
Officers found the van fully stocked with hundreds of cans of Enfamil. The infant formula usually sells for around $10 per can, but officers found receipts in the van showing each can was purchased for less than a dollar.
A further investigation, aided by U.S. Customs agents, led authorities to believe the suspects altered bar codes on the cans to buy them cheaply at stores such as Wal-Mart and Brookshire Brothers, then resold them elsewhere to turn a profit that may have been used to fund terrorist operations abroad, police said.
Police told the Conroe Courier for its Thursday editions that terrorists obtain U.S. currency from certain store owners and operators who derive millions in profits from the resale of stolen or fraudulently purchased items, like formula. They would not comment directly on the link in this case.
"There is a very, very strong connection with what's going on here in relation to money going over to Middle Eastern countries to fund terrorist groups over there," White said. "We're just a little, bitty town here. You'd never think something like that would happen."
U.S. Customs Service spokeswoman Judy Turner in Houston said she could not confirm whether the agency was investigating the operation.
"The only thing that I will confirm is that the Montgomery Police Department shared information about what they found in that traffic stop with the U.S. Customs Service and possibly other federal agencies," Turner said.
Turner said the agency did handle a major investigation in Dallas regarding baby formula in the late 1990s. In that case, at least $4 million worth of formula was stolen from stores, repackaged in counterfeit cartons and sold across state lines, she said.
"We did link the money going to countries such as Egypt and Jordan," Turner said. "That's as far as we got."
Two of the van's occupants, 17-year-old Rutilio Barrera of McAllen and 28-year-old Monica Mozeyen of Houston, were arrested.
Barrera was taken in on felony drug charges out of Corpus Christi and Mozeyen was sought for failing to appear at a hearing over a Department of Public Safety speeding ticket out of Harris County, police said.
Barrera was taken back to Corpus Christi while Mozeyen was released after posting bond, police said.
Police Chief J.R. "Jackie" McDonald said the department would pursue whatever charges it could against Barrera and Mozeyen.
The other two occupants of the van, one juvenile female and another adult woman, were released for lack of any specific charges to hold them, McDonald said.
White said Montgomery police have fielded inquiries into the case from law enforcement authorities in Los Angeles, Phoenix and across Texas.