Embezzlement case against former top tax official in court
SANTA FE, N.M. (AP) — Prosecutors on Monday began presenting evidence tied to embezzlement charges against the former top-ranked taxation official for New Mexico as a judge decides whether to move forward to trial.
State prosecutors have accused former Taxation and Revenue Department Secretary Demesia Padilla of advocating to end a tax penalty against a client of her former private accounting firm. At the court hearing, record-keepers from private banks testified as prosecutors sought to enter a variety of financial records as evidence.
Defense attorney Paul Kennedy repeatedly challenged the relevance of the documents. Padilla and her attorney declined to enter a plea.
Padilla, the state’s top tax official for five years under Republican Gov. Susana Martinez, resigned in 2016 after a law enforcement raid on tax department offices. Complaints to a fraud hotline at the state auditor’s office and unsigned letters from state employees prompted the investigation.
The attorney general’s office alleges that Padilla advocated for Harold’s Grading & Trucking — a client of the accounting firm where Padilla once worked. Those and other actions resulted in a reduction of Padilla’s own tax liability, state prosecutors say.
She also is accused of making unauthorized transfers totaling $25,360 from the trucking firm’s bank to her credit card account. Criminal charges include computer access with intent to defraud, along with several misdemeanor charges linked to state ethics laws.
The allegations against Padilla are the latest in a string of high-profile corruption cases in state government in recent years.
Former Democratic state Sen. Phil Griego is serving prison time for convictions on fraud, bribery, perjury, embezzlement and felony ethical violations after using his position as a lawmaker to profit from the sale of a state-owned building in Santa Fe.
Republican Dianna Duran resigned as secretary of state in 2015 amid revelations she used campaign funds to fuel a gambling addiction. That led to her conviction on felony counts of embezzlement and money laundering.
New Mexico voters are deciding in next week’s election whether to create an independent statewide ethics commission to change the way ethical violations against public officials are initially reported and evaluated.
That would take some decisions out of the hands of partisan elected officials. Reports of wrongdoing by politicians and government appointees are handled by elected officials overseeing the offices of the secretary of state, attorney general and district attorneys, along with ethics committees of the Legislature.
The state also accuses Padilla of accessing tax records of former personal clients on numerous occasions and of failing to disclose real or potential conflicts of interest in her role at the taxation department.
The evidentiary hearing is unfolding with early voting underway to determine who will succeed Martinez as governor. She cannot run for a consecutive third term.
Republican gubernatorial candidate Steve Pearce and Democratic rival Michelle Lujan Grisham — both sitting members of Congress — have traded largely unsubstantiated accusations that the other used their positions in government for personal enrichment.