Copyright © 2021 Albuquerque Journal
Five years before a massive embezzlement scheme at Ayudando Guardians Inc. was exposed publicly, the firm’s tax accountant warned of what he believed to be signs of “illegalities” in the company’s books.
But Ayudando President Susan K. Harris and her husband, William Harris, entered a confidentiality agreement with the accountant to keep him from “telling anyone else about the crimes,” according to a court filing by the U.S. Attorney’s Office. In return, the accountant was paid in full for his services, $11,403, in May 2012.
The Harris couple, along with her son and business partner, were finally arrested in 2017 and brought to justice. By then, they had made off with more than $11 million in client funds over a 10-year-period.
The pact with the accountant in 2012, federal prosecutors say, was an effort by the defendants to keep their scheme secret and allowed the siphoning of nearly 1,000 client accounts to continue unimpeded for years.
“Millions of dollars of victims’ money would have been saved if Bill (Harris) would have spoken up right then (in 2012),” said assistant U.S. attorney Jeremy Peña last week. Harris, 60, an Ayudando guardian representative, was sentenced to the maximum 15 years in prison.
Susan Harris, 74, described by Peña as the architect of the criminal enterprise, received a 47-year prison sentence.
The two fled New Mexico in March 2020 to avoid the original sentencing hearing in the case. When they were captured weeks later in Shawnee, Oklahoma, Susan and William Harris had just $400 in their possession. They were living under assumed names with their pet Chihuahua.
With their funds depleted, many former clients of the Albuquerque-based firm are now destitute or homeless, said U.S. District Judge Martha Vázquez last week at the sentencing.
And it’s unclear whether they will ever be repaid.
That’s because the defendants spent their clients’ funds on a lavish lifestyle that included expensive cars, upscale homes, and $300,000 for a private luxury box at the Pit, where the catering tab reached up to $5,000 per basketball game, the judge stated.
In the years after the accountant’s concerns were silenced, the Harris couple and Sharon Moore, the chief financial officer for Ayudando, spent more than $100,000 on celebrity Caribbean cruises and vacations to Hawaii.
“There were no investments. The money is gone,” says a pre-sentence memorandum filed by the U.S. Attorney’s Office in New Mexico.
The company’s clients included military veterans, those with intellectual or physical infirmities, mental illness, or individuals who just needed help handling their finances.
“The depth of the betrayal is almost unfathomable,” Peña said during last week’s sentencing hearing.
While the Ayudando principals were living it up, their clients struggled because they weren’t getting the care or the monetary allowances they needed.
“The defendants Susan and William Harris courted hundreds of vulnerable victims and promised to help them,” Peña said. “Instead, they picked them clean.”
Details of the confidentiality agreement with the accountant came into focus at last week’s sentencing hearing.
In 2012, according to the prosecutors’ memorandum, Albuquerque tax accountant Timothy P. Taylor “realized that Defendant (Susan Harris) was using the business as a family ATM.”
Taylor wrote a letter to Ayudando’s attorney “laying out his concerns,” Vázquez said in court last week, and the parties entered a confidentiality agreement.
“Instead of ceasing their illegal activities,” the Harris couple paid off the accountant, and “the defendants were able to keep their conspiracy alive for several more years,” Vázquez said.
Ayudando, one of the largest guardianship firms in New Mexico, opened in 2004 to represent clients in court-appointed guardianships and conservatorships and administered government benefits, such as disability payments, for other clients.
The nonprofit firm also acted as a fiduciary for private-pay clients with trust or savings accounts and was on contract with the New Mexico Office of Guardianship to handle cases of low-income individuals.
Vázquez said Thursday that the illegal activities began in about November 2006, according to an investigation by the Internal Revenue Service, the FBI and other federal agencies.
In the summer of 2016, several Ayudando employees alerted law enforcement authorities after noticing discrepancies in client accounts. A yearlong criminal investigation ultimately led to a 33-count indictment of Susan Harris and her business partner, Sharon Moore, Harris’ husband and her adult son, Craig Young, who also worked at the firm.
By September 2017, Ayudando was no more.
Federal prosecutors, in their pre-sentence filing, cited a May 10, 2012, letter to Ayudando’s attorney, Corbin Hildebrandt of Albuquerque, from accountant Taylor.
In the letter, Taylor wrote that “Susan Harris flouted non-profit disclosure laws, paid the family inflated salaries, paid for personal cars with business funds, used the business American Express cards as personal cards, made hefty and improper ‘loans’ from the business to herself and her family, and denied him access to the records of the American Express account or to certain corporate accounts,” according the prosecutors.
Neither Taylor nor Hildebrandt returned Journal requests for comment last week. Neither has been charged in the case.
In a “mutual separation agreement” signed the day after Taylor’s letter, the tax accountant “agreed to turn over his records to the business attorney and agreed not to make any ‘disparaging statements,’ ‘criticism,’ or ‘critical comments’ ” about the Harris couple or Ayudando Guardians, the prosecutors wrote. Susan Harris agreed to pay the accountant’s $11,403 bill for services “without further question.”
“Following that acrimonious separation, Susan Harris adjusted the name on the American Express business account so that the physical cards no longer stated, ‘Ayudando Guardians’ on their faces – but otherwise made no detectable change to her client fund extraction scheme,” Peña and assistant U.S. Attorney Brandon Fyffe wrote in their filing.
Taylor’s letter, attached as an exhibit in the court file, refers to a May 9, 2012, “cease-and-desist” letter from Ayudando attorney Hildebrandt.
“It was absurd,” Taylor told the attorney, “to describe a cease and desist letter, and a statement of prosecutorial action should I not abide by … your demand letter.”
If the case came before a judge, Taylor wrote to Hildebrandt, discovery “will, in fact, reveal behavior by your clients, that is illegal, and quite probably within those illegalities, criminally illegal.”
The Harrises, he wrote, “have no regard for the law … they just don’t period.”
Taylor went on to say, “You must know, of course, that there is more … your client’s (sic) are at risk for, which is why you want me to cease and desist.”
If the matter ended up in court, Taylor wrote, that action would disclose information the general public would be allowed to know … “and that the entity is clearly being treated like a personal ATM … and no more than that.”
Taylor’s letter ended with a somewhat conciliatory tone.
“However, there ‘is’ much good, in how Susan’s employees handle the indigent, ‘period.’ It’s not that those that are helped would get similar or lesser needed care than with others, they just would not get any care. Unfortunately as a result of this, Susan believes, she’s too big for the Office of Guardianship to close her down, because there is no place to place these people.”
He added, “However it is clear that there are many other areas, in which within specific circumstances, that Ayudando could be shut down anyway and I really do not wish to have that happen.”
The mutual agreement that resulted required confidentiality except if either side were subpoenaed or ordered by a judge to discuss the matter.
If asked, the parties were to say only that their business relationship was dissolved.