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Alfredo Navarro Hinojosa’s 40-some clubs thronged nightly with patrons on weekends, earning him more than $100 million over just three years; but there was a secret to his success the competition didn’t have, the feds say.
Hinojosa, 59, built his empire by allowing cocaine sales in his club bathrooms, which drew enormous crowds to his venues, giving him a key edge, according to prosecutors. Dealers sold as many as 200 baggies of cocaine each weekend, raking in hundreds of thousands of dollars, court records say.
After several delays, his trial is now under way in a Dallas federal courtroom before U.S. District Judge Sam Lindsay. The case is expected to go to a jury next week.
The Mexican immigrant turned nightclub king faces a lengthy prison term if he is convicted of managing a drug premises, conspiracy to manage a drug premises, conspiracy to structure transactions to evade reporting requirements, and conspiracy to possess with intent to distribute a controlled substance.
The case began almost a decade ago, when the investigation launched in 2012. Hinojosa was not arrested until December 2017. The trial, delayed by the COVID-19 pandemic, finally began in late September with Hinojosa and three others facing a jury. It was delayed again earlier this month when one of the defendants contracted the coronavirus and had to be quarantined.
Hinojosa initially agreed to plead guilty shortly after his arrest but then changed his mind and decided to go to trial, despite having already given federal authorities a confession, prosecutors said.
Hinojosa, who lives in Rockwall, met with FBI agents and a prosecutor in July 2017 and told them he knew about the drug sales at his clubs. He said he wanted it to be “discreet,” controlled and not in the open, court records show.
His attorney tried unsuccessfully to have those statements suppressed prior to trial.
Two former Dallas police officers are among those already convicted in the case after pleading guilty to lying to the FBI. Edward Villarreal of Carrollton and Craig Woods of Dallas were police officers for more than 20 years who handled security for the clubs.
Woods, a member of the police canine unit, retired in 2017. He received three years’ probation the following year and as of last year owned and operated a ranch.
Villarreal was scheduled to testify – like other former associates — against Hinojosa in the trial. He faces up to five years in prison when he’s sentenced later this year. Villarreal, who served as Hinojosa’s supervisor of security, resigned from the police department in 2015 while under investigation for a road rage incident.
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The former officers used their law enforcement jobs and connections to try to keep Hinojosa and his employees out of trouble, and they attempted to impede local and federal criminal investigations.
Wiretaps recorded them chatting about their illegal activity on behalf of Hinojosa, according to court records. Villarreal and Woods also falsified police reports about incidents at the clubs, including a bouncer’s savage beating of a patron, records show.
Hinojosa, for example, tipped off some of the defendants about being under investigation by the FBI, court records show.
Villarreal continued to update Hinojosa about the criminal investigation and about who was being followed. And he shared with him his thoughts about which Dallas City Council members he believed had spurred a grand jury investigation into the clubs, records show.
When the FBI later asked Villarreal if he had told anyone about the investigation, he lied and said no, court records show.
The nightclubs Hinojosa owned include Far West, Medusa, the OK Corral in Dallas and the OK Corral in Fort Worth. His businesses brought in about $107 million in revenue between 2014 and 2016, the indictment says.
Hinojosa and his managers didn’t sell drugs or accept money from the transactions, court records say.
But stopping the sales, Hinojosa allegedly said in secret recordings, would have meant less profit at his clubs.
“They want it [cocaine] right here. They don’t want to go looking downtown,” Hinojosa said, according to court records.
Hinojosa and the clubs’ managers handpicked dealers to sell cocaine in the bathrooms, authorities say.
A total of 18 defendants were indicted in the case.
Assistant U.S. Attorney P.J. Meitl has said in court filings that at least eight co-defendants have pleaded guilty and in doing so, explained how the drug sales were “not only allowed, but encouraged by Hinojosa and others.”
Several have been sent to prison, including Juan Antonio Lara, who supervised cocaine sales at the OK Corral and Far West nightclubs in Dallas. He pleaded guilty and got almost six years in prison, records show.
Jose Javier Mendoza-Martinez and Humberto Ovila-Cruz both pleaded guilty to selling cocaine in the clubs and received 30 months each in prison. And Mauricio Garcia-Mentado got 10 months for selling cocaine in the clubs, records show.
Prosecutors say Hinojosa also used shell companies and unusual cash deposits and transfers to launder money for Mexican bands that performed at his clubs and to hide his own profits from the IRS.
“Hinojosa needed a successful, large-scale cash business (such as the nightclubs) to serve as a vehicle for his money laundering activities,” Meitl said in a court filing.
Meitl argued that even though Hinojosa wasn’t charged with money laundering, evidence of it was related to the overall drug conspiracy and should be presented to the jury. Secret recordings were made in Hinojosa’s headquarters, in which he discussed laundering funds and cleaning money, authorities said.
But his attorney, Chris Lewis, has said his client did not commit money laundering, and he tried unsuccessfully to get such evidence barred from the trial.
“The government is seeking to introduce financial evidence that is unrelated to the charged offenses in order to show that defendant is guilty of a crime which the government has failed to indict,” Lewis said in a filing.
Hinojosa also has been indicted in a separate case, filed in 2019, for harboring an undocumented immigrant: his older brother who reportedly did work for him in some of his clubs. In that case, which remains pending, authorities say Hinojosa provided Agustin Hinojosa Navarro a place to live and a job and “encouraged him to hide from authorities.”
Navarro has a criminal record involving drugs and had previously been deported to Mexico, court records say.
Also in trial with Hinojosa are Cesar Mendez, Miguel Casas and Martin Salvador Rodriguez.
Mendez is accused of being involved in drug distribution. Casas and Rodriguez are charged with managing a drug premises and drug distribution.
Several have been sent to prison, including Juan Antonio Lara, who supervised cocaine sales at the OK Corral and Far West nightclubs in Dallas. He pleaded guilty and got almost six years in prison, records show.
Jose Javier Mendoza-Martinez and Humberto Ovila-Cruz both pleaded guilty to selling cocaine in the clubs and received 30 months each in prison. And Mauricio Garcia-Mentado got 10 months for selling cocaine in the clubs, records show.
Prosecutors say Hinojosa also used shell companies and unusual cash deposits and transfers to launder money for Mexican bands that performed at his clubs and to hide his own profits from the IRS.
“Hinojosa needed a successful, large-scale cash business (such as the nightclubs) to serve as a vehicle for his money laundering activities,” Meitl said in a court filing.
Meitl argued that even though Hinojosa wasn’t charged with money laundering, evidence of it was related to the overall drug conspiracy and should be presented to the jury. Secret recordings were made in Hinojosa’s headquarters, in which he discussed laundering funds and cleaning money, authorities said.
But his attorney, Chris Lewis, has said his client did not commit money laundering, and he tried unsuccessfully to get such evidence barred from the trial.
“The government is seeking to introduce financial evidence that is unrelated to the charged offenses in order to show that defendant is guilty of a crime which the government has failed to indict,” Lewis said in a filing.
Hinojosa also has been indicted in a separate case, filed in 2019, for harboring an undocumented immigrant: his older brother who reportedly did work for him in some of his clubs. In that case, which remains pending, authorities say Hinojosa provided Agustin Hinojosa Navarro a place to live and a job and “encouraged him to hide from authorities.”
Navarro has a criminal record involving drugs and had previously been deported to Mexico, court records say.
Also in trial with Hinojosa are Cesar Mendez, Miguel Casas and Martin Salvador Rodriguez.
Mendez is accused of being involved in drug distribution. Casas and Rodriguez are charged with managing a drug premises and drug distribution.