Lawyer found guilty of scamming more than $1 million from Colombian drug lords


The Washington Post

Jamie Balagia's RV advertising his law firm.

From a cramped prison cell in Bogota, Colombia, the American attorney and his private investigator went over the shadowy deal with their client once more.

They didn't speak any Spanish, at least not well enough to communicate with the accused Colombian drug lord sitting on his prison cot, and so the investigator, Chuck Morgan, brought his wife to help translate at the December 2015 meeting. The prisoner, Segundo Villota Segura, was fighting extradition to the United States. He considered by U.S. authorities to be part of one of the most formidable cocaine-running enterprises in the world, with connections to the Sinaloa cartel and violent Mexican gangs.

His attorney was Jamie Balagia, better known in Texas as the "DWI Dude."

As his nickname suggested, Balagia normally represented people arrested with DWIs or marijuana possession. International drug trafficking conspiracy was new.

The details of the transaction were simple, Balagia and Morgan explained: Segura would pay them a couple million, and in exchange, they would use the money to bribe influential U.S. officials to make Segura's drug case disappear. Segura had already paid a significant portion, according to court filings, and now he wanted to know where the money had gone.

Segura asked, Who were these alleged "U.S. officials" that Balagia and Morgan claimed to be bribing? What are their names?

The FBI special agent who received a copy of the secret recording of this conversation was intrigued by what he heard next, as he would later testify in federal court: We can't tell you their names, Balagia and Morgan told the alleged drug trafficker.

"Now Segundo, you know I would never expose anyone," Morgan told him, the Dallas Morning News reported. "When we get into this, it gets very messy. As you know, the lawyer has to stay very, very clean."

Segura, satisfied for the moment, apparently grew suspicious later. Pulled from a hidden camera in his prison cell, he provided a tape of the meeting to U.S. prosecutors - and in turn, busted the Americans claiming to help him.

On Tuesday, a jury found Balagia, 62, guilty of defrauding Segura and two other convicted Colombian drug traffickers out of hundreds of thousands of dollars after claiming to be well-connected to U.S. officials who could dismiss the drug trafficking cases if the Colombians paid enough money. It was all a ruse, federal prosecutors said. There were no bribes, and there were no influential U.S. officials waiting on money.

With help from another Colombian attorney, Balagia and Morgan made up the whole scheme, prosecutors said.

"This defendant and his group were running a scam on drug dealers - some of the biggest drug dealers in the world," U.S. Attorney Joe Brown said in a statement. "Fortunately for him, these drug dealers chose to turn him into the FBI rather than handle it any other way."

Morgan and the Colombian attorney serving as an intermediary, Bibiana "Bibi" Correa Perea, previously pleaded guilty to the scheme and were sentenced to 72 months and 84 months in prison, respectively. Balagia, convicted of conspiracies to commit money laundering and wire fraud and obstruction of justice, among other charges, faces up to 30 years in prison.

The Texas DWI Dude's path to La Picota prison in Bogota in 2015 snakes an unusual path. Balagia spent roughly a dozen years as a police officer in Austin before becoming an attorney and launching a small, successful law firm in Texas Hill Country. He drove an RV that served as a giant advertisement for his law firm, decorated with marijuana leaves and announcing, "BUSTED? CALL THE DUDE!" His picture showed an imposing figure: broad-shouldered with a long snow-white beard and long, graying hair.

Once, he ran for Texas attorney general on the Libertarian ticket on a platform of legalizing marijuana and improving police accountability. He lost badly in 2014 to Republican Ken Paxton, who has spent the last four years under indictment on felony securities fraud charges.

Sometime that same year, Balagia got involved with the Colombians.

Perea, an extradition lawyer based in Colombia, sought to find an American lawyer to aid Segura, her client, and contacted Morgan. She knew Morgan reportedly had a "long history of working with U.S. law enforcement agencies," including the Drug Enforcement Administration and the FBI, Perea's attorney wrote in court filings. Morgan, described as a private investigator in documents, in turn recommended Balagia.

But FBI Special Agent Jason Rennie testified that they weren't interested in helping their clients.

Together, the group convinced three Colombian drug suspects that they could get their cases dismissed or a win them a favorable plea deal through bribery, Rennie said. Two of the men were extradited to Texas and locked up in Collin County, while Segura remained in Bogota.

In July 2014, Hermes Alirio Casanova Ordóñez, known as "Megatron," agreed to pay Balagia and the others $700,000, and ultimately coughed up about half. Held in the Collin County Jail, he didn't understand why he wasn't freed after agreeing to extradition and paying the money, the Morning News reported from the trial. Balagia reportedly told him he needed to pay more.

The group convinced Segura to pay $1.2 million and ultimately swindled more than $900,000 from him, according to the indictment. And lastly, in September 2016, the group targeted Segura's brother, Aldemar Villota Segura, in the Collin County Jail. They asked for another $1.2 million - "so that the money could get to the right people to get him off the charge," Balagia said then, according to the indictment.

But the FBI was already onto him by then. Rennie said an undercover agent started working as Balagia's "bookkeeper." The undercover agent asked Balagia if he was concerned that Aldemar Villota Segura's payments would come from his narcotics operation. It "would be no issue," Balagia assured him, Rennie testified.

The FBI started tracking all of the payments in Balagia's bank account since September 2014. All over the country, largely in the northeast, anonymous people were depositing thousands of dollars into Balagia's bank accounts at regular intervals - believed to be Perea's associates, according to the indictment. On one occasion, Balagia drove to a mall parking lot in Katy, Tex., to pick up a bag of about $120,000 cash from a person identified only as "Coco."

Trying to explain away that payment to the Internal Revenue Service, Balagia suggested the money just fell in his lap: "The person that delivered the money only provided the name Coco and then walked away with no other information," he claimed, according to court documents.

Balagia's defense attorneys, however, argued that the Texas lawyer was following Morgan's lead - and that in fact, Morgan was secretly working with the U.S. government, the Morning News reported. They claimed Morgan's past reported experience as a government informant indicated he was still doing undercover work.

But federal prosecutors said Morgan's long-ago government work was irrelevant: Morgan certainly had no authorization on behalf of U.S. authorities to be offering fake bribes to Colombian drug suspects now, they told the court, according to the Morning News.

The jury didn't buy the defense either.

"It is important for the American justice system that we prosecute those who represent that the justice system is for sale," Brown, the U.S. attorney, said in his statement. "The Colombians, and criminals in every other country that we deal with, need to understand things don't work that way in the United States."

Balagia will be sentenced at a later date. His defense attorneys indicated to the Morning News that they intend to appeal the conviction.

-- Meagan Flynn, The Washington Post