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Saturday, October 11, 2008

Ex-Metro Court Official Pleads Guilty to Fraud

By Scott Sandlin And Mike Gallagher
Journal Staff Writer
       Former Metropolitan Court administrator Toby Martinez admitted Friday taking more than $2 million in public money through inflated invoices and cash payments from construction funds for the new $83 million Metro courthouse in Downtown Albuquerque.
    Martinez entered the ceremonial courtroom at U.S. District Court at high noon with his wife, Sandra Mata Martinez. Flanked by attorneys Brian Pori and Erlinda Ocampo Johnson, he pleaded guilty to conspiracy and mail fraud before U.S. Magistrate Judge Carmen Garza.
    The conspiracy described in his plea agreement essentially tracks the indictment in the case, including allegations that former New Mexico Senate President Pro-Tem Manny Aragon took cash payments from various players for a piece of the action.
    Prosecutors allege that the conspiracy involving more than half a dozen people siphoned off $4.2 million of pubic funds related to the courthouse project.
    Martinez says, for instance, that he knew Aragon was getting cash payments from Marc Schiff, a principal in the architectural firm Design Collaborative Southwest, which had the contract to design the courthouse.
    "I personally observed Schiff make a delivery of bulk cash to Senator Aragon," Martinez said in the plea document. The cash delivery, Martinez says in the document, "was not made in return for any legitimate professional services provided by Senator Aragon, but instead constituted (his) share of criminally derived proceeds."
    Aragon has pleaded not guilty and lined up a retired chief justice of the state Supreme Court to testify on his behalf about legal fees.
    In an agreement with prosecutors inked just minutes before it was entered, Martinez acknowledged a series of fraudulent deals, the biggest of which was an inflated price tag on the video arraignment system. He said he had set up a shell company in his wife's name "for the sole purpose of receiving proceeds of the inflated audio-visual billings."
    Martinez could face up to five years on the conspiracy count and up to 20 years on each of the two counts of mail fraud, but prosecutors agreed to make recommendations on his behalf at sentencing based on his trial testimony against other defendants in the case.
    Under terms of his plea, Martinez gives up his right to appeal the conviction, though he could appeal a sentence he thought too harsh. He also agrees to forfeit $600,000 in mail fraud proceeds invested in Solid Gold Hotel and Resort in Tennessee, a 2005 Lexus, and real estate and bank accounts that have already been attached by the government.
    Martinez's plea does not resolve charges against his wife, nor will it have any effect on the scheduled Oct. 28 trial date of the other defendants, according to assistant U.S. attorneys Jonathon Gerson and Paula Burnett. Gerson said the only likely effect would be to lengthen the trial by as much as a week because Martinez could be expected to undergo extensive cross-examination by counsel for the remaining defendants.
    The indictment, now in its fifth iteration, names the Martinezes, Aragon, engineer and P2RS principal Raul Parra and construction manager Mike Murphy in alleged schemes involving the courthouse.
    "Martinez was a central figure in the conspiracy," U.S. Attorney Greg Fouratt said Friday, adding that the plea marks "a good day for New Mexico."
    The plea could create a domino effect with other defendants, but that will play out in the days and weeks to come.
    Three others had previously pleaded guilty: Schiff, former Albuquerque Mayor Ken Schultz and subcontractor Manuel Guara. They all await sentencing after they testify.
    Aragon's attorney, Ray Twohig, who was in the courtroom for Martinez's plea, said he will evaluate whether to seek a delay.
    "There are a lot of ripples on the pond right now," he said.
    Murphy's attorney Jason Bowles said he looks forward to cross-examining Martinez on his expected testimony.
    "Toby Martinez was debriefed twice by the FBI and never once implicated my client," he said.