The owner of a Rio-Hondo based crude oil purchasing company charged in connection with a federal investigation into a scheme to smuggle crude oil into the country pleaded not guilty, federal court records show.

Arroyo Terminals owner James Jensen was arrested alongside his wife, Kelly, on April 27.

Two of their sons, Maxwell and Zachary, were also arrested in connection with the investigation.

READ MORE: 4 people, including Arroyo Terminals owner, indicted in scheme to smuggle crude oil into the country

The indictment against the four individuals accuses them of smuggling 2,881 shipments of crude oil into the country since May 2022.

“James Jensen conspired with his wife Kelly Jensen and two of his sons, Maxwell and Zachary Jensen, to launder proceeds from sales of illegally imported crude oil,” a warrant filed for James Jensen’s arrests states. "The payments for this crude oil were directed to businesses in Mexico that operate only through the permission of Mexican criminal organization. James Jensen was aware that the payments he made were going to these Mexican criminal organizations.”

In the warrant, authorities allege that over $47 million went from businesses run by James and Kelly Jensen to “Mexican businesses.”

James and Kelly both entered not guilty pleas and waived appearing at their arraignments that were scheduled for Thursday. 

James and Maxwell are facing federal charges of money laundering and smuggling of goods. Kelly and Zachary are facing federal money laundering charges.

Maxwell and Zachary also pleaded not guilty to their charges. Records show Zachary was released on bond. Maxwell has a court hearing set for Friday morning to discuss being released from federal custody, where he’s being held without a bond. 

Federal court records indicate James and Jelly made bond payments in the amount of $20,000 and $10,000, respectively.