June 28, 2018

Former Tax and Revenue Secretary charged with embezzlement

The New Mexico Attorney General filed embezzlement and other charges against a former Tax and Revenue Department (TRD) secretary Thursday. She had previously resigned amid questions about possible preferential treatment of a former client.

A spokesman for Attorney General Hector Balderas confirmed that special agents with the AG’s office filed nine criminal charges against former Tax and Revenue Department Secretary Demesia Padilla.

This is a developing story and may be updated with more information.

Update: Added information from the criminal complaint

At the time of publication, the criminal complaint against Padilla was not yet available through online court records.

James Hallinan, a spokesman for Balderas, said Padilla was charged with, “Engaging in an Official Act for Personal Financial Gain, Embezzlement over $20,000.00, Computer Access with Intent to Defraud or Embezzle and five counts of violating Ethical Principles of Public Service.”

Through a records request, NM Political Report obtained the criminal complaint which alleges Padilla embezzled  more than $25,000 from a former client when she worked as a certified public accountant, before she was a cabinet secretary. Padilla is also being charged with five violations of the Governmental Conduct Act. The complaint also contains extensive information from interviews with Padilla’s former employees, alleging the former secretary tried to give preferential treatment to a former client and tried to cover up wrongdoing.

Padilla resigned in December 2016, after Balderas’ office issued a search warrant for both Padilla’s personal and professional records. That search warrant was one of many pieces of the Padilla scandal, which began with an audit from then-State Auditor Tim Keller. In 2015, Keller, now the Mayor of Albuquerque, said an audit showed Padilla gave preferential treatment to a former client, later revealed to be Albuquerque business Harold’s Trucking. Keller sent the case to Balderas. Balderas’ office would not comment on any specifics of the charges.

“Although the OAG cannot comment on this pending criminal matter beyond the publicly filed documents, Attorney General Balderas remains committed to ensuring that any public official who misuses their office is held accountable to taxpayers and New Mexican families,” Hallinan said.

Before Gov. Susana Martinez appointed her as Tax and Revenue Department Secretary, Padilla worked for Harold’s Trucking as a certified public accountant. According to the AG’s search warrant, Padilla was fired from the company after an employee discovered multiple payments being transferred to Padilla’s personal credit card.

The Office of the State Auditor also found that Padilla, as secretary, tried to get tax fees waived for Harold’s Trucking, explaining that it was her negligence as a CPA that resulted in lost documents.

Hallinan said the AG’s office will file additional information and request a preliminary hearing.