Krebs embezzlement trial now up to jurors

Paul Krebs told jurors Thursday that the University of New Mexico lost no money as a result of the ill-fated 2015 Scotland golfing trip and that he acted “in good faith” to benefit the athletic program.

“I don’t believe I did anything wrong,” Krebs, UNM’s former athletics director, testified in his own defense. “I did not convert any UNM funds to my own purpose. Everything I did was done in good faith.”

Jurors began deliberations Thursday on the fourth day of Krebs’ trial on two counts of felony embezzlement before 2nd Judicial District Judge Cindy Leos.

Prosecutors allege that on two occasions Krebs used public funds to pay expenses for the Scotland trip. Participants included himself, family members, former men’s basketball coach Craig Neal and three donors with no university affiliation.

Much of the prosecution’s argument centered on Krebs’ alleged violations of university policies by transferring money from UNM Foundation and athletics department funds.

“How many times have you heard the word policy come out of these prosecutors’ mouths,” Krebs’ attorney, Paul Kennedy, told jurors Thursday. “Policies are not law.”

Kennedy argued that the Scotland trip was a “legitimate athletic department purpose” and that Krebs had discretion to use the funds to pay for trip expenses.

Krebs did not commit embezzlement because he did not benefit financially from the transactions, Kennedy said in closing arguments.

“UNM is not out one cent,” he said. “That’s not embezzlement.”

Prosecutors with the New Mexico Attorney General’s Office responded that Krebs committed embezzlement by using UNM funds for purposes not intended by the university.

“Mr. Krebs used UNM property, the property of another, for his own purpose rather than the purpose authorized by the owner,” Assistant Attorney General John Duran told jurors.

UNM policies define the allowed uses of university funds, Duran said in his closing arguments.

“The purpose authorized by the owner is policy,” he said.

Krebs said repeatedly during his testimony that he had not read UNM’s policy manual and relied on staff to keep him abreast of policy issues.

Prosecutors also said in closing arguments that Krebs made no effort to compensate the university until after reporters began publishing news reports about the trip in 2017.

Krebs made an anonymous donation of $25,000 to the UNM Foundation to cover costs associated with the Scotland trip. He later acknowledged making the donation himself.

Krebs was the only witness for the defense and spent more than three hours on the stand Thursday. Krebs said he made the donation after UNM leaders became upset by media reports about the trip.

“In my experience, universities don’t react particularly well” to adverse publicity, Krebs told jurors. UNM leaders “were very concerned about the stories in the media” and were anxious to “make the story go away,” he said.

Prosecutors allege that Krebs directed staff to waive the $8,100 cost of the “ground package” for each of three large donors who agreed to pay their own airfare to Scotland.

He also allegedly directed a payment of $13,625 from an athletic department “contingency fund” to reimburse the Lobo Club, the nonprofit fundraising arm of the athletic department.