LAREDO, Texas — A Texas trucking company owner is facing federal charges in connection with an alleged scheme that used 57 drivers without authorization to haul domestic freight, allowing the carrier to save nearly $300,000 in labor costs while completing more than 1,000 trips.
Armando Martinez Varela, 56, of Laredo, owned VMS Transport LLC, an interstate trucking company operating near the U.S.-Mexico border.
According to a Nov. 10 announcement from the U.S. Department of Justice, Martinez Varela recruited drivers admitted to the United States under B-1 nonimmigrant status to transport freight between locations within the U.S., work that their immigration status did not authorize.
Federal prosecutors allege that between Feb. 20 and May 15, 2026, company records documented 1,044 domestic freight trips involving 57 B-1 drivers.
The drivers allegedly picked up trailers in Laredo and delivered shipments to destinations throughout the country.
Lower driver pay, substantial savings
According to the indictment, VMS Transport paid the B-1 drivers between 25 and 50 cents per mile, compared with approximately 70 cents per mile paid to authorized drivers performing similar work.
Federal authorities estimate the arrangement saved the company $299,606 in labor costs during the nearly three-month period.
The alleged pay disparity raises questions about the competitive impact of using drivers who lack authorization to perform domestic transportation work.
Carriers that comply with federal employment and immigration requirements must compete for many of the same freight opportunities while bearing the costs associated with legally authorized operations.
Prosecutors also allege that Martinez Varela arranged housing for the drivers between assignments rather than having them return to Mexico.
What B-1 drivers can — and cannot — haul
The allegations highlight an important distinction in federal regulations governing cross-border trucking: Drivers admitted to the United States under B-1 nonimmigrant status may legally transport qualifying international freight, but they are not authorized to haul shipments that move solely between domestic locations.
The practice of transporting freight between two points within the same country is known as cabotage.
In an April 29, 2026, trade information notice, U.S. Customs and Border Protection (CBP) clarified that B-1 drivers may transport qualifying shipments entering or leaving the United States as part of international commerce.
However, those drivers are prohibited from picking up a domestic shipment at one U.S. location and delivering it to another.
The agency further clarified the rules in an Oct. 5 bulletin, explaining that there is no general 100-mile restriction on qualifying international freight movements and no blanket 24-hour limit on a B-1 driver’s presence in the country.
Owner faces up to 10 years in prison
Martinez Varela faces charges involving employment of unauthorized workers, encouraging or inducing unlawful entry or residence, harboring unauthorized noncitizens and making materially false statements to federal investigators.
If convicted, he faces up to 10 years in federal prison and a possible $250,000 fine, according to the Justice Department.
HSI conducted the investigation, and Assistant U.S. Attorney Christine A. Cortez is prosecuting the case.
The charges remain allegations. An indictment is not evidence of guilt, and Martinez Varela is presumed innocent unless proven guilty in court.
Linda Garner-Bunch has been with The Trucker since 2020, picking up the reins as managing editor in 2022. Linda has nearly 40 years of experience in the publishing industry, covering topics from the trucking and automotive industry to employment, real estate, home decor, crafts, cooking, weddings, high school sports — you name it, she’s written about it. She is also an experienced photographer, designer and copy editor who has a heartfelt love for the trucking industry, from the driver’s seat to the C-suite.
