Thursday, March 29, 2007
Four Indicted in Courthouse Conspiracy
By Sue Major Holmes/
Former Senate President Pro Tem Manny Aragon and three other people have been indicted in a conspiracy, mail fraud and money laundering case that authorities say cost New Mexico taxpayers $4.2 million.
The case involves a scheme to defraud the state in the construction of a new Bernalillo County Metropolitan Court, said acting U.S. Attorney Larry Gomez and state Attorney General Gary King.
The Legislature approved bond financing, which is being paid back by court and traffic fees for the $82 million court building and parking garage. The project, completed in 2004, was supervised by the court administration.
Aragon; former metro court administrator Toby Martinez; Raul Parra, a partner in Albuquerque engineering firm P2RS; and software consultant Sandra Mata Martinez, wife of Toby Martinez, have been indicted.
Three other people architect Marc Schiff; Ken Schultz, a lobbyist and former Albuquerque mayor; and subcontractor Manuel Guara entered into plea agreements, the government said.
Assistant U.S. Attorney Jonathon Gerson said the investigation has been under way for more than a year and the 26-count indictment was handed up Thursday. The plea agreements were done earlier but were unsealed Thursday.
The indictment said the roles of Aragon and Toby Martinez were central because of their authority over the expenditure of public funds. Aragon did not immediately return a message seeking comment left Thursday by The Associated Press.
The corruption probe became part of the controversy over the firing of former U.S. Attorney David Iglesias.
Iglesias, one of eight U.S. attorneys fired late last year, has said he was dismissed for political reasons after resisting pressure from New Mexico Republicans, Sen. Pete Domenici and Rep. Heather Wilson, to rush indictments in the corruption probe before the 2006 November elections.
Gerson said Thursday: "We handled this as we would have handled any other case. We handled this matter professionally without attention being paid to outside influence.''
Aragon, Parra and the Martinezes conspired to submit and approve false invoices for payment and to make excessive requests for payment, the indictment alleges.
The defendants also were accused of money laundering. The indictment alleges various defendants opened bank accounts designed to disquise proceeds received from other members of the scheme.
The 24-page indictment lists numerous checks in various amounts in 2003, 2004 and 2005 as part of the scheme.
It also alleges the defendants subverted the metro court's procurement process by making inflated contract and contract modification proposals, and seeking appropriations from the state Legislature to pay for the false invoices and inflated contracts.
The indictment said Toby Martinez, court administrator until 2003, tried to get legislation for the courthouse through the 1997 and 1998 sessions of the Legislature while Aragon was president pro tem.
A bill passed during a special session in 1998 allowed the New Mexico Finance Authority to issue up to $46.5 million in revenue bonds for the structure.
In 1999, the metro court judges hired Design Collaborative Southwest, with Schiff as senior partner, as architects on the building. In 2002, the judges hired Integrated Control Systems to install audio-visual equipment and it hired Datacom Inc., owned by Guara, as a subcontractor. Sandra Martinez was hired for software consulting.
Under the scheme, Schiff would submit false invoices and excessive requests for payments, while Toby Martinez and others would authorize the payments, the indictment said.
Schiff would make cash payments to Aragon, not for legitimate services but as the proceeds of "jointly undertaken criminal activity,'' the indictment said.
He also made cash payments to Schultz, who would keep some of the money and pass along the rest to Toby Martinez, the indictment said.
It also alleges Toby Martinez, Parra and Aragon subverted the procurement process by including millions of dollars in fraud in contract proposals and modifications in the installation of audio-visual equipment. Parra kept some proceeds and passed the rest to Aragon and the Martinezes, it said.
Read the Press Release (PDF)
Read the indictments and the plea agreements at the U.S. Dept. of Justice District of New Mexico Web site
Indictment, United States v. Martinez, et al. - 07-615-JC filed 3-29-07 Plea Agreement, United States v. Schiff - 07-252-JC filed 2-18-07 Plea Agreement, United States v. Schultz - 07-518-JC filed 3-20-07 Plea Agreement, United States v. Guara - 07-575-JC filed 3-27-07
Manny Aragon, under indictment, has had long political career
A look at the political career of Manny Aragon, who was indicted Thursday in an alleged scheme to defraud the government in the building of the Bernalillo County Metropolitan Courthouse:
1974, Aragon is elected to the state Senate to represent Albuquerque's South Valley.
1988, Aragon succeeds Ike Smalley as Senate president pro tem.
1998, Aragon announces he has taken a job as a consultant for Wackenhut Corrections Corp., amid criticism from both Democrats and Republicans about a possible conflict of interest.
1999, Aragon resigns his Wackenhut job.
January 2001, Aragon loses his pro tem job to Sen. Richard Romero, D-Albuquerque.
November 2001, Aragon returns to a leadership position as majority floor leader.
July 2004, Aragon resigns from the Senate to become president of New Mexico Highlands University in Las Vegas. He had been selected president in late June.
June 2006, Highlands regents place Aragon on leave after faculty leaders and others complain he excluded them from decision-making and punished those who spoke out.
July 22, 2006, regents approve contract buyout that will pay Aragon $200,000.
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