Attorney General’s Office executes search warrant at UNM’s Lobo Club

December 6, 2018

ALBUQUERQUE — Agents from the state Attorney General’s Office executed a search warrant at the University of New Mexico’s Lobo Club on Tuesday morning, seizing documents and other information specific to the organization’s financial dealings during the administration of former athletic director Paul Krebs.

At issue, according to the warrant, is the Lobo Club’s management of luxury suites in The Pit — UNM’s famed basketball arena and the athletic department’s cash cow. In July 2017, the university announced the athletic department had not collected $432,000 from the rentals of 24 suites since those amenities were added during the facility’s remodeling in 2010.

The athletic department has attempted to collect the money since then.

The Lobo Club is a nonprofit, 501(c)3 tax-exempt organization that operates independently of the UNM athletic department and has separate organizational structures, though the two entities are often seen as linked. Specifically, the club’s primary purpose is to raise funds to cover athletics scholarships, promote ticket sales to athletic events and generate revenue through club memberships.

Special agents from the Attorney General’s Office seized extensive financial records in the raid of the Lobo Club offices on UNM’s South Campus, searching for bank statements and spreadsheets, along with internal memos and phone records that spanned 7½ years, from Jan. 1, 2010, through June 2017, a timeframe that includes a large chunk of Krebs’ tenure with the Lobos.

David Carl, a spokesman for the Attorney General’s Office, confirmed the move Wednesday, adding agents “are continuing our highly active investigation into financial transactions at UNM and we will provide the public with updates as we are able.”

According to the search warrant, Attorney General Hector Balderas’ agents took documents pertaining to courtesy cars, Lobo Club donor information, bank reconciliations from 2014 and 2015, documents from the sale of luxury suites in The Pit, finance committee minutes and audio recordings from finance meetings.

Investigators are believed to have been searching for information that advances the attorney general’s probe regarding a 2015 golfing excursion to Scotland for boosters and athletics personnel, as well as dealings with the sale and revenue from luxury suites in The Pit.

Agents seized computer hard drives and electronic databases that enclosed encrypted information, including passwords for hidden material, according to the warrant.

Balderas’ office launched a formal investigation into the Lobo Club and Krebs last year and appears to be building a case against Krebs for violation of the state’s government conduct law — one that, in the past, Balderas has suggested could lead to criminal charges. In October, his office seized the former athletic director’s credit card records while Krebs was employed by UNM.

Gene Gallegos, Krebs’ attorney, could not be reached for comment Wednesday night.

According to the search warrant, the attorney general’s initial investigation revealed Krebs had created an exclusive relationship with certain donors who were late on payments for luxury suites in The Pit and also found he directed the Lobo Club to refrain from contacting leaseholders whose payments had not been received.

Krebs distributed UNM event tickets to suite holders with delinquent accounts, with the understanding they would not withhold larger donations to the athletic department, according to the search warrant.

In a statement released by current athletic director Eddie Nuñez, the Lobo Club said it was not the subject of the investigation “but fully cooperated by providing any and all materials requested that would be helpful to their search.”

According to the warrant, the Attorney General’s Office interviewed several current and former employees with ties to the Lobo Club, who said the club had no involvement in the ill-fated Scotland trip that ultimately led to Krebs’ resignation last year. The club’s only involvement was paying the initial deposit to Anthony Travel Inc., the travel agency that assembled the Scotland package at Krebs’ direction.

The warrant shows how the Lobo Club issued a check for $49,500 on Oct. 30, 2014, to cover 25 percent of the Scotland golf trip for 24 individual packages at a cost of $10,299 per person. That included spots for Krebs and then-men’s basketball coach Craig Neal, according to the warrant.

Balderas’ investigation claims that the athletic department didn’t fill all 24 spots. It issued a refund check in the amount of $13,625 to the Lobo Club, the warrant said.

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