Five men charged with stealing 'millions of dollars' in crude oil from New Mexico pipelines

Five men have been charged for committing a “large-scale conspiracy” to steal oil from New Mexico pipelines and resell it in Texas earlier this year, federal authorities said Monday.

According to the Department of Justice, at least one of the suspects was providing funding to a Mexican cartel.

Maxwell Jensen, Thomas Rees, Christopher Ortega, German Ortiz-Santillano and Christian Jesus Contreras Varela are in federal custody and charged with interstate transportation of stolen property and aiding and abetting. The men face 10 to 15 years in prison, if convicted.

Contreras Varela, a Mexican national, faces additional charges for being an immigrant in possession of a firearm.

The DOJ said in a news release that the group stole “millions of dollars” worth of crude oil throughout the scheme but did not give a total amount.

Rees attorney declined to comment. Jensen’s, Contreras Varela’s and Ortiz-Santillano’s attorneys were not available to comment.

Ortega’s attorney, Andrew Ottaway, said that he has received calls asking if Ortega was previously affiliated with a gang and said his client is past that.

“When you’re a kid, you do dumb things but now he’s got a wife and kids and he’s put that all behind him,” Ottaway said. He didn’t address the current allegations against Ortega.

Jensen, 25, and his father, James Jensen, 68, were charged in May with conspiring to financially support a Mexican cartel — Cartel de Jalisco Nueva Generación — which was designated a foreign terrorist organization in February.

The Jensens, according to a DOJ release, allegedly operated Arroyo Terminals, a Texas oil company, and “aided and abetted the fraudulent entry of approximately 2,881 shipments of the oil in violation of the Tariff Act.”

At the time of the Jensens’ initial arrest, federal authorities seized four tank barges with crude oil and three commercial tanker trucks, according to the news release. An indictment stated that the United States will seek a $300 million judgment against the Jensens upon conviction.

“Cases like this highlight the often-dangerous relationships between alleged unscrupulous U.S. businesses and terrorist organizations,” said Special Agent in Charge Craig Larrabee of Immigration and Customs Enforcement’s Homeland Security Investigations San Antonio.

Stolen oil in NM

The FBI launched an investigation into the oil scheme on June 18 after receiving a tip from a confidential source that a group was planning to siphon oil from a pipeline facility in New Mexico, store it at a yard in Carlsbad and then resell it in Texas, according to an affidavit filed in U.S. District Court for the state of New Mexico.

The source told agents that the men would store the stolen oil at a pipe yard in Carlsbad, the affidavit states. The source said over 600 barrels of oil were brought in to the location every day and FBI agents surveilled a hauling truck and three 500-barrel tanks regularly parked there.

“At current crude oil prices, 600 barrels is valued at $39,000,” according to the affidavit.

The FBI said surveillance operations documented over 20 transports of oil from New Mexico to Texas over a four-week period.

In late July, federal agents followed the hauling truck to a Plains All American Pipeline site and siphoned oil from one of the pipelines, the affidavit states. The FBI said a Plains All American company employee helped the suspects siphon oil and “may be complicit in the scheme.”

It was later discovered that Ortiz-Santillano was an employee for Plains All American Pipeline and gave the men access to pipeline points, the affidavit states. Three days later, the FBI said two crude oil hauling vehicles were seen filling one of the 500-barrel tanks.

Federal agents followed the vehicle toward West Texas, where the suspects emptied the tanks into a Lease Automatic Custody Transfer — an automated system that measures and transfers oil to pipelines.

Federal agents used tracker data and found that the hauling truck had made 23 trips to Plains All American Pipeline sites from July 31 to Aug. 18, the affidavit states. FBI agents said each trip involved stolen oil.

Phone calls between Jensen and Rees revealed Rees ran the Carlsbad yard under the business name “Hound Dog Energy” and the company had received 25% of the profits from the stolen oil, the affidavit states.

The FBI source told federal agents Rees told him “sometimes we get 700 barrels a day,” and admitted to forging fraudulent load tickets to hide the stolen oil.