E-mail Story
Print Friendly
Send E-mail
Reprint story
Journal North: Home | Sports | Opinion | Obits | Entertainment
Saturday, June 20, 2009
Housing Scandal Charges Filed
By Mike Gallagher And Scott Sandlin
Journal Staff Writers
A government scandal that has unfolded slowly over three years passed another milestone on Friday with the filing of indictments against a former state legislator, two attorneys and an accountant.
The charges filed in state District Court in Albuquerque against various defendants ranged from money laundering and fraud to evidence tampering.
The Region III Housing Authority was set up to buy and renovate homes, then sell them to low-income buyers. Housing authority expenses involved in the indictments were financed by $5 million in bonds the agency sold to the State Investment Council.
Audits found that some of that bond money was misspent on items such as salaries, retirement benefits, travel and booze. In the end, the agency was shut down and the State Investment Council wrote off most of the $5 million as a worthless investment.
The investigation that followed culminated with indictments filed Friday.
Two state grand jury panels in Albuquerque heard evidence involving the now-defunct agency and returned two sets of indictments.
One set charges former state Rep. Vincent "Smiley" Gallegos, D-Clovis, along with the housing authority's bond counsel, Robert Strumor, and the agency's accountant, Dennis Kennedy, with fraud or embezzlement, money laundering and conspiracy to commit fraud.
Several attorneys for the defendants denied the charges and criticized the indictments presented to the grand jury by the New Mexico Attorney General's Office.
Gallegos and Kennedy face seven counts, and Strumor is charged with five counts.
Those charges stem from a series of bank transactions involving the housing authority in 2003 and 2004. The bank transfers involve using money from bond sale proceeds for operating expenses.
The second group of indictments involves a $300,000 loan the agency made to Gallegos while he was director. Gallegos and Kennedy are charged with fraud or embezzlement, money laundering and conspiracy in connection with that loan.
Gallegos and Kennedy are charged with misappropriating or embezzling $300,000 from the state of New Mexico and/or the Bank of Albuquerque between Dec. 16, 2004, and Jan. 11, 2005.
That indictment also charges that there were four separate instances of money laundering.
The agency's former attorney, David N. Hernandez, is charged with one count of tampering with evidence. The grand jury charges that Hernandez, a former president of the State Bar, destroyed, changed or fabricated two invoices and a promissory note intending to prevent the apprehension, prosecution or conviction of a person.
The Region III Housing Authority was created for Bernalillo, Sandoval, Valencia and Torrance counties, but the agency has operated in other counties in recent years. After it was shut down, the authority's operations were transferred to the Middle Rio Grande Council of Governments.
Defense tees off
A spokesman for Attorney General Gary King, Phil Sisneros, said the office had no plans to comment.
Defense attorneys did have comments.
Gallegos' attorney, Paul Kennedy, said, "This is more complicated than many people realize and will go further than many people expect. I have every expectation that my client will be vindicated."
Strumor's attorney, Billy Blackburn, said, "This just proves the old adage that you could get a New Mexico grand jury to indict a ham sandwich."
"The bottom line is that Bob Strumor adamantly denies he did anything wrong,"
"The Dennis Kennedy indictments are a travesty of justice, because Mr. Kennedy did absolutely nothing criminal," said his attorney, Erlinda Ocampo Johnson.
"Over time, it will become clear this case is fueled by a purely political agenda," she said.
"David is totally innocent. We look forward to his day in court when we can show that," said Ryan Villa,an attorney for Hernandez.
You also can send comments via our comment form
|
|
