RMA board takes no action against executive director over $3.2 million trolley scam

The Camino Real Regional Mobility Authority board took no action Friday against its executive director, Raymond Telles, in the wake of a more than $3 million dollar email phishing scam related to the City of El Paso’s Streetcar project.

Friday’s meeting started with comments from both El Paso Mayor Oscar Leeser and City Rep. Cortney Niland. Both expressed their concerns about the current arrangement.

“Our goal is to recover 100 percent of the money,” Leeser told the CRRMA board. “It’s not about finger pointing. It’s about how we move forward.”

Niland complimented Telles for the work he’s done handling more than a billion dollars in funding, but stated “there is some reform we need to identify.”

Following a two hour and 15 minute executive session, board member Joe Wardy read a four-part statement unanimously approved by the board: “The CRRMA has the full faith and confidence of our staff and the City of El Paso as our fiscal agent. We direct our staff to work with the City on the investigation to maximize our chances of additional recovery of funds. We direct our staff to investigate changes in policies and procedures to ensure protection of CRRMA assets. We will continue ongoing discussions with City staff to include the relative role and responsibilities with the financial oversight of RMA funds.”

Leeser jokingly seconded the motion. Telles, who it appears will not be disciplined, spoke with the media for the first time after the meeting.

“I think it’s a really positive step forward,” Telles said. “I’m looking forward to working with the City again.”

When ABC-7 asked Telles how he felt about the scam, he said, “It’s just awful, it’s something nobody wants to happen.”

Telles went on to tell ABC-7, “I think it’s all good. This is the RMA and City of El Paso coming together to figure out a way to move this thing forward. I think it’s a really positive step forward, I’m looking forward to working with the City again.”

ABC-7 asked Telles if he needs help, perhaps, an additional employee at the CRRMA or more oversight from the city. “Everybody needs help, right? What I think (the scam) has done is highlight and it’s going to force us to look internally and ask: ‘is this the best approach?'”

CRRMA board chair Susan Melendez said Telles has done a good job.

“We’ve directed our staff to work closely with the City on make sure there’s policies and procedures in place, so these types of things don’t happen again,” said Susan Melendez, chair of the CRRMA board. “what I’m very grateful for is Mayor Leeser came to visit with us as well as Rep. Niland. I think that’s dialog that needs to take place. We’re both going to work together and move forward. That’s the important thing, to move forward.”

The City has released a handful of emails related to the phishing scam that resulted in the misdirection $3.2 million in funds, most of it related to the streetcar project.

The City said it redacted the names of its employee and that of the Camino Real Regional Mobility Authority’s due to the ongoing investigation, although the CRRMA has only one employee, which is Telles.

The first misdirected payment happened September 28, 2016 and involved $2.9 million in state funds for a project managed by the Camino Real Regional Mobility Authority (CRRMA), city officials said.

The second misdirected payment happened October 4, 2016 and involved $312,000 earmarked for city projects. The City has recovered $1.9 million and the investigation continues, city officials said.

The City has called the phishing scam “sophisticated.”

According to a timeline released by the City, on August 22, 2016, a fake vendor posing as “The Granite Construction Company,” a real company, exchanged a series of emails with the CRRMA.
During this exchange, the impostor allegedly submitted false checking account information that replaced the legitimate checking account information for Paso Del Norte Trackworks, city officials said.

A discrepancy in the vendor names was caught by a City purchasing department employee who brought it up to the attention of the CRRMA. According to the City’s timeline, the CRRMA employee told the purchasing department employee the vendor was just changing its checking account and to process the change.

Melendez said it isn’t unusual for vendors to change account numbers.

“People do change banks, they sometimes change there name so those things do happen. In this case, remember this was a criminal element that created this fraudulent activity,” Melendez said.

The City is the CRRMA’s fiscal agent, meaning it handles all purchasing and financial matters.