SANTA FE, N.M. (AP) — A former accountant for the New Mexico Finance Authority has pleaded guilty to fraud and tax evasion for stealing $59,000 from the agency that’s embroiled in a scandal over a fake financial audit.
The Taxation and Revenue Department announced Friday that Valerie Sandoval of Bernalillo pleaded guilty to the charges and was sentenced earlier this week to five years of probation. Sandoval also must pay $59,000 in restitution and $3,500 in taxes.
The department said Sandoval took money from the NMFA between August and December 2009, and deposited it in a friend’s bank account.
Police began investigating the crimes in January 2010, and the district attorney filed charges against Sandoval in September 2011.
The theft by Sandoval occurred long before the audit scandal that’s currently unfolding at the authority. However, Sandoval worked in the accounting operation under the authority’s former controller, Greg Campbell, who’s been blamed by top management for faking an audit this year.
Campbell left the authority in June, and the fraudulent audit was publicly disclosed last week by the state auditor’s office and NMFA officials.
Authority CEO Rick May said it appeared there’s no connection between Sandoval’s activities and what happened with the controller and the fake audit.
New Mexico’s securities regulator is investigating the forged audit and whether there was fraud against investors, who may have bought bonds based on false information that the authority’s finances had been audited
National credit rating agencies have said they’re considering whether to downgrade the authority’s bond ratings because of concerns about a lack of financial oversight within the organization. A drop in bond ratings will increase the cost to New Mexico taxpayers for governments to finance capital improvement projects.
The Finance Authority issues bonds and provides low-cost financing for capital projects by certain state agencies, cities, counties, schools and other New Mexico governmental organizations. The authority was created by the Legislature and receives a share of tax revenues for its financing. The authority’s workers and management are not state employees, but there is government oversight of its operations. The authority is governed by a 12-member board and a majority of the members are the governor’s appointees and members of the governor’s administration.
May was secretary of the Department of Finance and Administration under Gov. Susana Martinez from January 2011 until last August, when he stepped down to become the authority’s chief executive officer.
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