A year and a half after a preliminary probe from the State Auditor’s office concluded that Demesia Padilla used her state position to benefit her former private client, the Taxation and Revenue Department secretary resigned from office this month after nearly six years on the job.

The revelations of an ongoing investigation by Attorney General Hector Balderas revealed far more potential misconduct from Padilla.

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First, TRD employees interviewed corroborated previous reports and evidence that Padilla, as head of the department that taxes New Mexicans, did insert herself into the audit of a company she previously did accounting work for.

But a search warrant affidavit filed by Attorney General Special Agent Ed Griego revealed that Padilla may have also embezzled money from the client, Harold’s Grading and Trucking—more than $25,000 in all.

Padilla told investigators that this money, which was transferred directly to her personal banking account between 2011 and 2013, was owed to her by Harold’s Trucking from previous work. But owners and officers of the Bernalillo-based company told investigators that Padilla did accounting for them through February 2013, when they fired her after discovering the $25,000 in payments.

In the search warrant affidavit, the Attorney General’s Office asked to seize Padilla and her husband’s tax returns to determine whether they paid taxes on these payments.

Padilla’s job as head of a state tax agency also bars her from doing accounting work for businesses. And even her previous state government job on the Gaming Control Board, where she served from 2007-2010, barred her from doing private accounting work, as the Santa Fe New Mexican reported.

Padilla’s unethical and possibly illegal activity doesn’t end with her relationship with Harold’s Grading and Trucking.

Investigators also found $128,000 in “unexplained income” in her bank account, roughly $48,000 of which was tracked back to QC Holdings Inc., a payday lending company.

A lawyer from that company told the Santa Fe New Mexican that the payments were rent for property that Padilla owns. But Attorney General investigators did not find Padilla’s name associated with any of the New Mexico properties leased to QC Holdings.

When Griego interviewed Padilla in December as part of the investigation, her attorney Paul Kennedy cut her off from answering questions about the QC Holdings payments and ended the interview.

While the search warrant affidavit made details of the Padilla investigation widely known, the Attorney General’s Office is so far staying tight-lipped about it. The state office denied NM Political Report’s public records request for other documents related to the case, including other search warrant requests and transcripts and audio from the interview with Padilla.

In the meantime, TRD Deputy Secretary John Monforte is helming the state agency. At a tax policy conference this month, Monforte reflected on the scandal of his now former boss.

“On one hand, there is Demesia Padilla, a woman that I know that I want to give sort of deference to,” he explained. “On the other end of that is Secretary Padilla as a state officer. And in that light, at the very least, the appearance of impropriety at the very least has a great cost.”