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Letter could offer insight into Lobo basketball program’s missing funds

Copyright © 2016 Albuquerque Journal

A previously undisclosed confession letter the University of New Mexico says it received in December from then-men’s basketball staffer Cody Hopkins explains how, and why, thousands of dollars of UNM money disappeared.

Cody Hopkins, former director of basketball operations for UNM, has been accused of embezzlement.

Cody Hopkins, former director of basketball operations for UNM, has been accused of embezzlement.

The letter directly references $3,000, although Hopkins is accused of embezzling $63,000 from the UNM basketball team.

The unsigned letter, purportedly written by Hopkins, describes a “downward spiral” that involved “dangerous levels of drinking” and taking UNM funds for personal use, with the intention of paying the money back.

A UNM police report mentions the letter and suggests that it prompted the school’s lengthy internal audit that led to Hopkins’ being accused of embezzlement, including unreconciled cash ATM withdrawals of more than $53,000 from July to December 2015.

The Journal, after noting mention of the letter in the police report, obtained a copy of it last week through an Inspection of Public Records Act request.

UNM officials have never mentioned it in their public remarks on Hopkins, and the letter was not referenced in the 41-page internal audit report made public in May.

In fact, the letter, which neither Hopkins nor his attorney has confirmed he wrote, was not given to the auditors as part of their investigation.

MORE: Click here to see the letter UNM says Cody Hopkins wrote in December regarding allegedly embezzled team funds

At a news conference in May, announcing the audit results, neither UNM athletic director Paul Krebs nor Lobos head coach Craig Neal mentioned the letter when asked specifically if they knew what the money might have been used for or how the school became aware of the missing money.

Both said they wouldn’t speculate as to what the money may have been used for, and Neal said only that he reported the matter to his bosses the moment he learned of situation in December, but he wouldn’t say how he discovered the issue.

“This is an isolated act of one individual,” Krebs said in May. “… Cody was immediately placed on leave of absence when it was discovered it was more than just somebody who was (behind on bookkeeping).”

The audit, police report and the letter have all been forwarded to the District Attorney’s Office, which said the case is “under review” for potential criminal charges.

Hopkins has referred all inquiries to his Albuquerque attorney Paul Kennedy, who has declined to comment on the case.

In the letter, the author says that changes in the business office helped his behavior go unnoticed and that he began to “rob Peter to pay Paul.” It said the only way he could escape the reality of his mistakes was “drink more, party more, and run.”

The letter also describes how he eventually started “the process of getting help. … I know I am in trouble and I now know I cannot fix this on my own.”

The letter concludes with an apology for having “broken your trust and your families’ love for my well being.”

No discipline

Hopkins, the 33-year-old former operations director who now lives in Texas, had been entrusted with access to the finances to help run the multimillion-dollar Lobo basketball operation. He was placed on paid leave in December when discrepancies in his use of the team’s purchasing card were first noticed. Whether the discrepancies were first brought to the administration’s attention because of the letter or in another way remains unclear.

Hopkins’ contract expired at the end of March, and he was never officially disciplined or fired from the school.

The UNM police report indicates that police were first told of the case in March but didn’t start their criminal investigation until the audit was completed in May. The police report written in June says Hopkins hand-delivered the letter to Neal in December and the head coach then gave it to former UNM Chief Financial Officer Mike Marcelli. He then contacted Manu Patel, director of UNM’s Internal Audit Department, “and the investigation was initiated,” the police report said.

In a statement Marcelli gave police in May, which is also included in the police report, he mentions the meeting with Patel in December alerting the audit department of the potential embezzlement but does not say he ever told the auditors of the letter.

According to UNM, the letter itself was not given to internal auditors for their investigation because “the audit process evaluates the events, and not the motivation of any individuals involved,” said UNM spokeswoman Cinnamon Blair. She said the audit “process had already been initiated” when the letter was brought forward by the athletics department, which appears to contradict the sequence of events described in the police report.

The audit report explains at length how much money was missing, why it was missing, how it could have happened and who else at UNM should have noticed and stopped it from happening.

It does not include any mention of Hopkins’ battle with alcohol, his admission that he had misused funds or his desperate attempts to stay out of casinos – all of which are in the letter.

Lost wallet

The letter opens with a paragraph saying the author lost his wallet on vacation – and “while extremely intoxicated I used money from the P-Card. My rational (sic) was that when I found my wallet, I could just use my personal money from the expenses we had coming up.”

He found his wallet but drained his account after “being up nearly 24 hours drinking,” the letter said. “I returned home very sick and was certain I would be fired later that week. I deposited half the money, and never heard a word from anyone. This totaled a little over $3,000 of funds that were not mine and around $5,000 of my own money.”

A “P-card” is essentially a credit card UNM issues to departments around campus, including athletics. Some cards, especially those used by employees who travel frequently, such as in athletics, permit cash withdrawals.

Even if paid back, using a university “P-card” for personal reasons – cash or otherwise – is against policy.

Although the audit focused on misuse of funds from July through December 2015, it also mentions that UNM was aware of $39,546 in cash withdrawals on the card Hopkins made in fiscal year 2015, which ended June 30. Of that amount, Hopkins reimbursed $13,772. That cash activity was not red-flagged and did not lead to any restrictions on his P-card.

Other than the lost wallet reference, nowhere else in the letter is there mention of specific use of the P-card, though it does reference drinking leading to various problems snowballing at work.

The letter says high turnover in the athletics business office “led to this go unnoticed (sic).” It later says, “I began to rob Peter to pay Paul by paying cash for things that we needed (in the basketball office) as often as possible. I never once turned in a receipt that was not true.”

The audit report accuses Hopkins of falsifying documents and forgery.

UNM has not specifically asked Hopkins for any money back, but said in an email from UNM athletics spokesman Frank Mercogliano that the DA’s Office is “aware that we are interested in restitution.”

Other employees

UNM told the Journal in June that no other employees committed any potential criminal activities. But it said that two employees – Bruce Cherrin, chief procurement officer for the university’s purchasing department, and Kaley Espindola, human resources administrator in the athletics department – had been disciplined for their roles in not identifying the issue sooner. It also said that a third employee had a chance to appeal potential discipline.

That employee, Yvonne Otts, Director of Business Operations, has since been given a letter of reprimand.

The Journal learned that Otts and former deputy athletics director Tim Cass met regularly with Hopkins in the months during which the audit says Hopkins embezzled the money, but those meetings never led to the P-card use being flagged.

The Journal reported in June that Cass was still on the school’s payroll as a consultant after the school initially announced that he had left last fall. Cass, who did not respond to attempts for comment before that article was published, emailed a Journal reporter expressing disappointment after the article appeared in print.

In the email, Cass said: “I had NO knowledge of Cody’s p-card details. None. … In addition, I did not meet regularly with Cody on P-Card. Till this day, I have No knowledge of Cody’s p-card details.”

On June 30, Mercogliano told the Journal that Cass, Otts and Hopkins “did try to meet monthly” and that the meetings “covered a variety of topics from budgets to arena availability to daily team schedules. P-Card would have been discussed in the context of those meetings, but they were not meetings specifically about that topic.”