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This story has been updated: Wednesday, October 15, 2008 at 10:17 a.m.
Updated: Aragon Pleads Guilty
Wednesday, October 15, 2008
Only Aragon, Murphy Set for Trial in Court Corruption Case
By Scott Sandlin And Mike Gallagher
Journal Staff Writer
Two more defendants in the Metropolitan Court construction scandal marched into federal court and pleaded guilty Tuesday, leaving just two members of the alleged conspiracy facing trial later this month.
The accumulation of guilty pleas from people who admit involvement in the scheme to siphon off $4.2 million from the project and agree to testify for the prosecution adds to the legal difficulties facing the biggest name defendant left in the case — former state Sen. Manny Aragon.
Aragon and a former construction manager, Michael Murphy, are scheduled to go to trial later this month.
Prosecutors cleared a major hurdle last Friday when former Court Administrator Toby Martinez agreed to plead guilty and turn state's witness.
On Tuesday morning his wife, Sandra Mata Martinez, entered a guilty plea to a felony charge that she knew her husband was involved in something illegal and helped him hide it.
By afternoon, contractor Raul Parra headed to the courthouse to admit skimming $3.3 million from the Metro Court audiovisual contract, of which he personally pocketed $700,000.
He faces a maximum of 71 months in prison based on his plea to one count of conspiracy and two counts of mail fraud.
The federal indictment alleges most of the money skimmed from courthouse job was from the audiovisual contract with another $900,000 raked off in a separate scheme involving architectural fees.
Project architect Marc Schiff, former Albuquerque Mayor Ken Schultz and the audiovisual subcontractor, Manuel Guara, had pleaded guilty earlier.
Schiff and Toby Martinez have said in court documents they would testify about the involvement of Aragon, who allegedly was paid off by others for his role in getting state money for various aspects of the construction project.
$600,000 transfer
Parra's plea and statement presents additional problems for Aragon's defense, which is that he was paid for legal and consulting services.
Parra said he transferred more than $600,000 to Aragon from proceeds of the scheme. He said that while Aragon had done legal work for him, the former state senator "did not provide anywhere close to $600,000 worth of legal services."
U.S. Attorney Greg Fouratt said Parra's agreement to cooperate against the remaining defendants was "an important consideration" for the agreement.
"The factual allegations are that Mr. Parra dealt directly with Senator Aragon in stealing $3.3 million from the citizens of New Mexico," Fouratt said after the plea was entered.
Parra's attorney, Robert Gorence, had no comment after the plea hearing. He is expected to argue for a shorter prison term for Parra when a sentencing date is scheduled.
Inflated invoices
The government charged Parra was a key player in the scheme to grab money out of the audiovisual contract through inflated invoices submitted by a subcontractor Parra recruited.
The subcontractor, Datcom, would submit false invoices to the general contractor on the audiovisual work, and Martinez would approve the invoices. The money would then get paid to Datcom, which transferred the funds to Parra.
According to the indictment, Parra then distributed the money to Aragon and to a company called Smart Solutions, which had been organized under the name of Sandra Martinez.
The charge against Murphy involves an allegation that he accepted $20,000 to sign off on the inflated invoices after Toby Martinez was fired for reasons unrelated to the courthouse construction project.
Both Parra's and Sandra Martinez's guilty pleas were taken by U.S. District Judge Bruce Black — sitting in for Judge William "Chip" Johnson, who was out of town.
Supposed casino
According to Sandra Martinez, her husband and Parra were sinking some of their ill-gotten gains into a casino investment in Tunica, Miss.
A trip in connection with that investment in January 2004 led Sandra Martinez to conclude the source of the money was not legitimate.
Sandra Martinez said in her plea agreement that Toby Martinez told her in August 2003 that he wanted the corporation in her name so he could still work as a consultant if he got a state position.
"After Smart Solutions was created, Toby would regularly ask me to sign blank checks and other documents," Sandra Martinez said in the plea. "At first I did so without suspicion."
"As I learned more about the nature of the investment and the amount of money involved ($600,000), it became very clear to me that the original purpose of Smart Solutions that Toby had articulated to me was not accurate," the factual basis says.
Her suspicions were confirmed.
"It was clear to me that large sums of money were passing through Smart Solutions accounts; I knew that this money came from checks that Toby was picking up from Mr. Parra on a regular basis; and I knew that the value of any professional services that Toby was providing to Mr. Parra did not approximate the payments," she said in the statement.
Mark Fine, Sandra Martinez's attorney, said she faces 12 months to 18 months under federal sentencing guidelines.
"I'm confident and hopeful I can keep her out of prison," he said. "She really doesn't deserve that at all."
He said the money discussed in the factual basis for the plea never actually went into a casino.
"Toby and Raul were trying to get a casino started, and it never got off the ground," he said.
Fine said he believes the Martinezes are happy to be done with this part of the case. He said his client, a former court employee, continues to work cleaning houses.