Lazaro De La Garza ran Pancho Villa's Department of the Hacienda before he moved to New York to handle munitions supplies for the Division of North. Together with Sommerfeld and three uncles of Francisco Madero (Alberto, Alfonso and Ernesto) De La Garza faithfully supplied Villa until the summer of 1915. By then, Villa had lost at Celaya and Leon. Together with Sommerfeld, De La Garza cobbled together a large munitions contract for 15 million cartridges. Then Villa could not pay anymore. Sommerfeld and his German backers decided to sell of the contract to the highest bidders. Some of the deliveries went to Obregon in the fall of 1915. The rest went to France in the winter of 1915 and through 1916. Since German agents could not appear connected to this deal, De La Garza handled the entire administration of the contract. Since neither Villa nor the Germans had tight control over De La Garza, he got sticky fingers.
As soon as the French had signed the delivery contract in October 1915, De La Garza sued the Western Cartridge Company for the return of his deposit of $65,000 ($1.37 million in today’s value). Franklin Olin, the head of Western Cartridge, “refunded” the money to him without much hesitation. However, the down payment belonged to the Madero brothers who, in turn, owed that amount to the División Del Norte, then under the leadership of Pancho Villa. De La Garza was unsure what to do with the money. He kept it in his account for three months. Nobody claimed it. He carefully evaluated the ownership of the funds. He paid $5,000 ($105,000 in today’s value) to Sommerfeld at the end of December, the remainder of his commission. By the summer of 1916, the contract had made De La Garza $65,000 deposit money (paid by Villa and the Maderos) and $75,000 commissions ($1.6 million in today’s value) from the French. De La Garza had some minor expenses for legal fees and the administration of the contract. He made somewhere around $140,000 ($3 Million in today’s value) in total through this arrangement.
Immediately after the contract came to its conclusion in the summer of 1916, De La Garza moved himself and his family, including his brother, Vidal, to Los Angeles. There, he bought a $100,000 ($200,000 if one believes the Los Angeles Times) mansion with cash and settled down. His wife, Esther, brought over $93,000 (close to $2 million in today’s value) with her in cash from Torreón. It is likely that this money represented earnings and other cash assets from his investments in Mexico. Most of his property had been expropriated by Carranza, who by the fall of 1915 had full control over Chihuahua and Torreón. As a Villista, De La Garza could expect no mercy and no reimbursement. He officially “retired” from the Revolution when he moved to Los Angeles. Retirement treated De La Garza well: He settled in his mansion in a well-to-do foothills neighborhood and lived lavishly on the interest of his “savings,” a whopping $5 million in today’s money. The revolution had made him an even richer man than he already was in 1911.
It did not take long for Villa and the Madero brothers to catch on to the fact that De La Garza had made off with the deposit. Alberto Madero sued him in Los Angeles in June 1916. The case dragged on until 1918, when it was dismissed. The dismissal was based on a technicality, namely that Pancho Villa was an enemy of the United States (since the attack on Columbus) and, therefore, could not recover any money north of the border. Villa was furious. He sent De La Garza a letter in 1919, asking him to work for him again and that everything would be forgiven. While he did not ask De La Garza to come to Mexico for a meeting, ultimately, that would have been what Villa intended. Then, he could arrest and execute his former treasurer.
However, De La Garza was no dummy. He wrote to his friend, Leon Canova, that he would stay as far away from Villa as he could. His friend agreed. Canova had smuggled Eduardo Iturbide out of Mexico in 1914. Villa had pursued the then-American consul all the way to the American border but could not arrest and execute Iturbide. An irate Villa had publicly vowed to kill Canova if he ever set foot into Mexico again. “I think you are right in regard to General Villa,” Canova mused, “and that your safest line is to keep clear of him… If I could meet Villa at a time when he was in good humor I would not hesitate to do so – BUT, I think that if the meeting occurred when he was in one of his rages, he would order me to be shot forthwith. I imagine he would follow the same line of conduct with you. So, in a case of this kind it is best to ‘watch your step.’”
De La Garza was holed up in his mansion, fearing for his life. He had outfoxed el General. When Villa realized that he could not touch De La Garza, he threatened to kidnap twelve Americans that he would trade for the merchant. Neither did the kidnappings happen, nor did Villa get to have his revenge. Villa died in 1923 from an assassin’s bullets in Hidalgo de Parral, Mexico. His brother, Hipólito, kept up the pressure and sued De La Garza into the 1930s. A court in Ciudad Juarez finally convicted De La Garza in 1933 and issued a warrant for his arrest. De La Garza defended himself with all means at his disposal all the way to the Mexican Supreme Court, which overturned the conviction. He cited needs for “personal security” with the Mexican government, which gave him permission to carry a concealed weapon during his journey to the Mexican capital. Undoubtedly, the embattled businessman feared for his life.
While De La Garza succeeded in keeping the stolen money, he paid a hefty, non-material price for his crime. Alberto Madero and Hipólito Villa ruined De La Garza’s reputation with continued lawsuits and negative press coverage. Headlines in Mexico such as “The man who robbed 10 Million Dollars from Pancho Villa” branded the former financial agent a traitor to the revolution. His reputation was forever tainted. Later in life, he tried to re-establish a meaningful business in Mexico, but his effort came to nothing. Not even a network of American politicians and financiers, including President Harding, Vice President and incumbent President Coolidge could help him overcome the reputation of a swindler who had sold out his country. Lázaro De La Garza died in Torreón in August of 1939.