ALBUQUERQUE, N.M. — One of the longest-running corruption cases in New Mexico history marked a new phase Thursday when Vincent “Smiley” Gallegos, the former head of the Region III Housing Authority, pleaded no contest to four misdemeanors.
He had been charged with felony counts of fraud and embezzlement over $20,000, money laundering over $100,000 and conspiracy in 2009 in connection with mismanagement of bond funds for housing projects. Gallegos was named in two indictments, and Thursday’s hearing resolves them both.
Gallegos, 61, entered into the plea agreement before 2nd Judicial District Judge Ross Sanchez.
Assistant Attorney General Chris Lackmann has been trying to push the case to trial, but a variety of setbacks in the cases against a total of four defendants has stalled action repeatedly.
Gallegos is receiving a conditional discharge and one-year probation.
Gallegos’ attorney, Paul Kennedy, noted that Gallegos is also a defendant in two civil lawsuits seeking to recover money for the state.
The counts to which he entered a no contest plea include attempting to commit a felony – paying or receiving public money for services not rendered – in February and July 2006 and October and November 2005. Gallegos had met with boards on the same day and location and billed two different entities.
Lackmann said those counts center on double-billing for going to the same meeting.
The housing authority at the center of the civil and criminal cases was set up to buy and renovate homes and then resell them to low-income purchasers. Expenses were paid by $5 million in bonds sold to the State Investment Council.
But the money was misspent on everything from a fancy briefcase to salaries, retirement benefits, travel and liquor, according to audits by State Auditor Hector Balderas.
The housing authority defaulted on $2.5 million of the bonds in June 2006.
One of the cases filed by the Attorney General alleged fraud in connection with the sale of securities by Gallegos, a former Democratic state representative from Clovis, housing authority bond counsel Robert Strumor and the agency accountant, Dennis Kennedy.
The second group of indictments stems from a $300,000 loan to Gallegos while he was agency director. It alleged misappropriation or embezzlement by Gallegos and Kennedy and one count of tampering with evidence by former agency attorney David Hernandez.
Charges against the other defendants are still pending. The Attorney General’s Office has offered misdemeanor pleas to them as well, according to statements by Lackmann at a status conference in September.