Case News Release
January 16, 2014: Peter Jacob Tello, 42, of Lubbock, was sentenced to prison for 4 years for motor fuel tax fraud. Tello pled guilty to Engaging in Organized Crime for participating in a continuing scheme with other individuals to steal diesel fuel, to Engaging in a Motor Fuel Transaction without a License, and to Transporting Motor Fuel without Shipping Documents. Tello was ordered to pay $5,180 in restitution to Arctic Glacier, the victim of the organized crime case, and fined a total of $1,000. The University of Texas System Police-Permian Basin assisted the Comptroller's Criminal Investigation Division with the investigation. Tello's cases, cause numbers A-42,765, -64, and -63, respectively, were prosecuted in Ector County.
Motor Fuels Tax Investigations
Motor fuel taxes are set by the Legislature and collected by the Comptroller of Public Accounts. Crimes and penalties related to the motor fuels tax are described in Tax Code Chapter 162, Subchapter E. These crimes range from misdemeanors to second-degree felonies, the punishment range for which is 2 to 20 years in prison.
- selling or delivering dyed diesel fuel (fuel which is untaxed because it is not intended for use on public highways) for the operation of a motor vehicle on a public highway (a third-degree felony);
- blending fuel to expand its volume and thus evade motor fuels taxes (a second-degree felony);
- failing to remit any motor fuel tax funds collected. (a second-degree felony);
- destroying required books and records (a third-degree felony); and
- making false entries in required books and records (a third-degree felony).
Other Consequences in Addition to Criminal Punishment
The Comptroller's office may cancel or refuse to issue or reissue a Chapter 162 license to any applicant who has violated or failed to comply with a provision of this chapter or a rule issued by the Comptroller (see Tax Code §162.005). In some cases, this can occur without prior notice (see Tax Code §162.006).
Motor Fuels Tax Prosecutions
Motor fuels offenses can be prosecuted in the county in which they occur or in Travis County (see Tax Code §162.407). Local prosecutors prosecute motor fuels misdemeanors in the county in which they occurred.
Motor Fuels Tax Crime: How It Hurts Texas
Motor fuels tax provides the fourth-largest source of state tax revenue. In fiscal 2013, Texas motor fuels tax collections totaled $3.2 billion. This revenue is then allocated to:
- public education