West Texas oil theft scheme leads to six arrests, $12 million seized

Six people were arrested and more than $12 million in petroleum products, luxury goods, cars and cash were seized as part of an alleged multi-state oil theft ring, Texas law enforcement said Wednesday.

West Texas-based Vallee Oil and Gas, a wastewater disposal company, allegedly bought, moved and sold crude, and skimmed oil out of wastewater products, officials said. The operation involved thousands of barrels of illegal petroleum products across several states, according to court documents.

Six people, including executives with Vallee Oil, were arrested on Aug. 12 as part of “Operation Black Market Basin” on state charges including felony oil theft, money laundering and organized crime. More arrests are expected as the investigation continues, according to the Texas Department of Public Safety.

Oil theft is not a new phenomenon but has grown into a multi-billion dollar problem for the state’s drilling industry. A rise in cases led to major regulatory reforms last year, the creation of a Texas Railroad Commission task force and the tightening of regulations.

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As part of the recent operation, law enforcement officials seized 2,600 barrels of petroleum products worth an estimated $220,402; 60 cars, trucks and off-road vehicles worth more than $2.8 million; $786,215 in cash; 34 pieces of luxury watches and jewelry; and eight bank accounts with more than $8 million. 

“We will continue to vigorously prosecute those who steal oil; it’s the lifeblood of the Permian Basin,” said Sarah Stogner, Reeves County District Attorney. 

According to court documents, investigators launched an undercover operation in September 2025, sending Texas DPS officers and local sheriffs to make contact with the company. 

As part of the scheme, Vallee Oil allegedly paid the undercover agents and others to secure either stolen or unregulated crude from across Texas, New Mexico and Oklahoma, which Vallee would later process and sell, court records show.

The undercover agents were paid every two weeks and their checks often had memos that read: “rebate, for skim oil that was not obtained illegally,” according to court documents.

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Companies permitted to purchase and sell oil must document the amount they obtain and sell, and can only tap sources approved and monitored by the Railroad Commission, which oversees the state’s oil and gas industry. 

Vallee intentionally failed to do so, court documents allege.

Although officials with the Criminal Investigation Division of the Texas Department of Public Safety were first tipped off to the alleged oil theft scheme in 2023, the investigation and charges stemming from the August arrests are for crimes committed after the Texas penal codes around theft of oil were amended last year.

Among those arrested was Leandro Juarez Jr., Vallee Oil’s president and director, according to arrest warrants obtained by the Houston Chronicle. Juarez’s brother, Moses Juarez, and Christian Valdez, both Vallee Oil executives, were also arrested. Moses Juarez served in the Dallas Police Department for nearly 30 years, according to state records.

All three were charged in Reeves County with felony oil theft, money laundering and organized crime, according to court records.They face up to 99 years in prison for oil theft and money laundering. Organized crime charges could lead to life imprisonment in certain cases.

The Chronicle was unable to reach attorneys for Valdez and the Juarez brothers.

The other three people arrested were not named in court records obtained by the Houston Chronicle.