Longform

Snitch Vs. Snitch

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After De La Garza was arrested, Arroyo was allowed to return to the U.S. As De La Garza had arranged, Arroyo was arrested and indicted on nine counts of drug smuggling. Represented at the time by Schaffer, Arroyo was acquitted of four counts and convicted of five; he appealed all five convictions. After a district court granted him a new trial, and the Fifth Circuit upheld that decision, the Department of Justice dropped its case against him.

Despite his legal victory, Arroyo ended up spending two years in jail -- the same amount of time De La Garza spent in a Colombian prison. When both were again free men, it was payback time.

As Dan De La Garza sits in his attorney's plush office, the cellular phone that he wears in a holster rarely stops ringing. The massive, balding businessman seems mildly annoyed by the interruptions as he tells what it was like to spend almost two years of hell in a Colombian prison. Between calls, he recounts various forms of torture: hanging upside down for hours at a time, being sprayed with ice-cold water from a high-pressure hose, and beatings that left him with seven broken ribs.

It is an understatement to say that De La Garza has come a long way in the 11 years since his release. "Can you say 'rebirth'?" he asks.

"You can do pretty much whatever you want to do when you have to start your life over," he says. What he decided to do, with the help of friends, was to buy foreclosed office buildings from the Resolution Trust Corporation and sell them at a profit. From there, he branched into the health-care industry.

De La Garza and two of his brothers, Michael and Shawn, control three companies: DLG Financial, Health Trust, and Synergies. Through those companies, they own medical office buildings and operate managed-care companies in Houston, Dallas, Shreveport and Albuquerque. Last year, De La Garza told federal authorities that he earned approximately $150,000 a year in addition to an annual bonus between $50,000 and $100,000. His home in The Woodlands is valued at $800,000. His net worth has been estimated at $10 million, though he says it's lower now. His attorneys say all of that money is legitimate.

In fact, in many ways, De La Garza and his family now seem downright respectable. In 1992, his brother Mike ran for state representative in the Democratic primary, taking 43 percent of the vote against incumbent Kevin Bailey. In September 1995, De La Garza himself was quoted in a USA Today story noting that Hispanic CEOs were fighting to preserve federal affirmative-action policies.

That's not to say that De La Garza remained squeaky-clean; in fact, a case can be made that he's merely moved up in the world of shady deals, into the more lucrative realm of white-collar crime. In January 1995, a federal court in Houston fined DLG Financial $600,000 after finding that the company had violated the U.S. Bank Control Act in 1990, when it failed to get prior approval from the Federal Reserve for the purchase of $1 million in promissory notes from NCNB-Texas through International Bancorporation.

The Federal Reserve board of directors held that DLG's offense was not merely a technical violation, but part of the business's regular heavy-handed practices. "De La Garza, continuing a pattern that started in December 1990, sought to control the bank's management by forcing it to engage in questionable mortgage pool transactions with related interests," wrote Assistant Attorney General Frank W. Hunger. "He threatened the management with foreclosure of the stock [of International Bancorporation], implicitly threatening their jobs if they did not accept his offer."

De La Garza does not seem fazed by the sanction. He dismisses the fine as a mere slap on the wrist, noting that his company still made $1.4 million on the deal. He considers the penalty little more than the price of doing business.

But another questionable business deal still dogs him. In 1993, De La Garza and another man were indicted in Travis County for misapplying $9 million in insurance company assets. De La Garza's co-defendant turned state's evidence, and De La Garza was convicted and sentenced to five years in prison. He is now appealing that conviction.

Around the same time as De La Garza was indicted in that case, federal investigators were luring him into an unrelated trap -- one constructed with the help of his old nemesis Arroyo.

Unlike De La Garza, Arroyo didn't prosper after his release from jail. On October 6, 1989, less than two years after he'd been set free, Houston police arrested him for delivery of less than 28 grams of cocaine. Three months later, he was turned loose after Harris County assistant district attorney Ira Jones filed a motion to dismiss. On the dismissal form, to indicate the reason for dropping the charge, Jones checked a box marked "Other." Arroyo had cut a deal to become an informant for the DEA.

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Steve McVicker