TEXARKANA, Texas (KETK) – A Texarkana doctor pleaded guilty Wednesday to a federal tax fraud violation, according to Eastern District of Texas Acting U.S. Attorney Nicholas J. Ganjei.
According to information presented in court, 68-year-old Rafael Otero was the majority owner of Magnolia Alzheimer’s Assisted Living facility in Texarkana and his son, Antonio Otero, was the administrator.
The Oteros obtained a loan insured by the U.S. Department of Housing and Urban Development. Instead of paying the loan, prosecutors say the Oteros took hundreds of thousands of dollars from Magnolia. Dr. Otero allegedly got more than $150,000 from Magnolia in unauthorized compensation and other payments.
Otero pleaded guilty to an information charging him with defrauding the U.S. Department of Housing and Urban Development.
“Dr. Otero, and his son Antonio Otero, exploited a HUD-insured mortgage program designed to provide affordable housing for those suffering from diseases like Alzheimer’s,” Ganjei said. “While they left the HUD-insured mortgage unpaid, the Oteros took hundreds of thousands of dollars.”
Ganjei said that their actions ultimately cost American taxpayers $3.6 million.
Antonio Otero took even more money, using it to pay for the following:
- $3,952 worth of camera equipment
- $3,247 watch
- $2,520 in landscaping for his personal residence
- $27,408 personal mortgage payment
- $12,750 down payment on a personal vehicle
- $1,540 tickets to the Dallas Cowboys
- $13,000 as a gift to someone for cosmetic surgery
Prosecutors say that when Otero learned his son was stealing money, he did not report him or remove him from the position. They said Antonio stole an additional $62,000 after his father learned of his theft.
Otero could face up to one year in federal prison. Antonio pleaded guilty to equity skimming on Oct. 28, 2019, and was sentenced on June 2, 2020 to 46 months in prison.
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