A Texas trucking company owner has been indicted on federal charges from an alleged scheme to employ unauthorized foreign drivers to transport domestic freight across the U.S., saving his company nearly $300,000 in labor costs.
Armando Martinez Varela, 56, of Laredo, Texas, owned VMS Transport LLC, which prosecutors allege recruited drivers admitted into the U.S. under B-1 nonimmigrant visa status to perform domestic trucking work they were not authorized to undertake.
VMS Transport LLC records allegedly showed that 57 B-1 visa drivers completed 1,044 domestic transportation trips between Feb. 20 and May 15, according to an announcement on Tuesday from the U.S. Attorney’s Office for the Southern District of Texas.
The drivers picked up trailers in Laredo and delivered freight to destinations throughout the U.S., federal prosecutors said.
The indictment alleges Varela used the arrangement to substantially reduce the company’s labor expenses by paying the foreign drivers between 25 cents and 50 cents per mile, compared with approximately 70 cents per mile paid to authorized drivers performing similar work.
Federal authorities estimate the company saved approximately $299,606 in labor costs through the alleged arrangement.
VMS Transport LLC is a Laredo-based interstate trucking company operating 53 power units and employing 50 drivers. Federal records show the carrier underwent 90 roadside inspections during the 24-month period ending Nov. 9, resulting in 12 driver out-of-service violations and 10 vehicle out-of-service violations. Its driver out-of-service rate of 13.3% was nearly double the national average of 6.67%.
VMS Transport was also involved in two reportable crashes during that period, including one involving injuries. FMCSA records listed the carrier’s operating authority as active as of Nov. 9.
The case comes amid heightened federal attention to immigration compliance and the use of foreign drivers in U.S. trucking operations, particularly along the southern border.
Federal authorities have increasingly scrutinized the use of B-1 visas in trucking operations, including whether drivers entering the U.S. for international transportation are performing unauthorized domestic freight movements.
Varela faces charges involving the employment of unauthorized workers, encouraging or inducing unlawful entry or residence, harboring unauthorized immigrants and making materially false statements to federal investigators.
If convicted, he faces up to 10 years in federal prison and a possible maximum fine of $250,000, according to prosecutors.
Under federal rules, qualifying B-1 drivers may participate in international freight movements but generally cannot transport cargo picked up at one U.S. location and delivered to another U.S. destination when the movement is entirely domestic.
Prosecutors allege Varela recruited B-1 visa holders specifically to haul domestic freight after picking up trailers in Laredo.
The indictment also alleges Varela arranged housing for the drivers between assignments rather than having them return to Mexico.
The Justice Department’s announcement did not specify whether additional company officials or drivers face charges in connection with the alleged scheme.
It also did not identify the freight customers involved or the destinations served by the 1,044 domestic transportation trips.
Why it matters: The indictment against Armando Martinez Varela, owner of VMS Transport LLC, highlights federal scrutiny of trucking companies accused of using improperly authorized foreign drivers to reduce labor costs and compete with compliant carriers.
