Ex-city commissioner convicted in Valley insurance scam

Oscar Elizondo
Oscar Elizondo

A former Rio Grande Valley official faces up to 10 years in prison after his conviction in a scheme to defraud Blue Cross Blue Shield of Texas.

Oscar Elizondo, 47, conspired to submit more than $1.7 million in fraudulent insurance claims for high-priced pain patches and scar creams, federal prosecutors said.

Elizondo was a marketer for Penitas Family Pharmacy in the Hidalgo County town of Penitas, where he targeted employers that carried employee health insurance through Blue Cross, including the Pharr and Point Isabel Independent School District.

The former Pharr city commissioner — who resigned last year after his arrest on charges of drunken driving and illegal possession of a firearm — offered meals, drinks, and promises of free prescription pain patches and scar creams to entice employees to turn over their insurance information.

The San Antonio Express-News reported that Elizondo’s co-conspirators used the insurance information to submit fraudulent claims for treatments that employees never received.

Other employees were sent to a doctor who received kickbacks, including cash, loans, and prescription drugs. Elizondo also set up a temporary office for the doctor in a vacant office and a rented recreational vehicle where they solicited employees to write fraudulent prescriptions, prosecutors said.

Elizondo faces up to 10 years in federal prison and a $250,000 maximum fine. Sentencing is scheduled for early next year by U.S. District Judge Randy Crane. Meantime, Elizondo remains free on bond.

Two years ago, federal authorities launched the Rio Grande Valley Public Corruption Task Force to break up rampant corruption, ranging from drug smuggling and vote stealing to courthouse bribery and healthcare fraud.

In 2013, 83 public officials were convicted of federal crimes in South Texas — more than in any other region of the country.


  1. Have a corruption story that no one did anything about stopping it. Sent all info to state agency -State Comptrollers Office, who told me twice they were too busy on other cases but would get around to my complaint. Never did. NIW years later, same agency tells me they have (had) no authority over municipal courts. Municipal court judge charged $250 On what should have been a $20 dismissal fee. City manager knew about violation of state law but did nothing about it. Have plenty of evidence, names of people overcharged; letter from court charging $250 to person that should have paid $20.
    Story needs to be told of corrupt small town. Also police personnel sleeping while getting $35 -$40 an hour overtime paid with federal funds.


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