NM Supreme Court upholds ruling vacating former tax secretary’s felony convictions

SANTA FE — The long, complex legal drama involving former New Mexico tax secretary Demesia Padilla appears to finally be over.

The state Supreme Court on Tuesday upheld a 2023 Court of Appeals ruling that vacated Padilla’s two felony convictions on technical grounds.

Attorney General Raúl Torrez’s office had appealed the Court of Appeals ruling, arguing a state statute of limitations should have been paused while charges against Padilla were refiled in a different judicial district.

But the Supreme Court, in a unanimous decision, rejected that argument and directed a lower court judge to vacate the felony convictions.

The two convictions stemmed from a public corruption investigation into the actions of Padilla, who was one of former Gov. Susana Martinez’s initial Cabinet appointees as secretary of the Taxation and Revenue Department.

Specifically, state investigators alleged Padilla embezzled more than $25,000 from Harold’s Grading & Trucking, a company that had been a client of her accounting firm, through unauthorized fund transfers and later used her state government position to try to prevent the company from being audited.

The investigation into Padilla’s actions was launched by then-state Auditor Tim Keller, who is now Albuquerque’s mayor, and was eventually referred to the attorney general’s office.

After several years of legal wrangling, Padilla was convicted in 2021 of embezzlement and computer access with intent to defraud or embezzle, which are both felony offenses. She was subsequently sentenced to five years of probation but no prison time.

But those convictions were vacated after Padilla’s attorney, Paul Kennedy, filed an appeal, arguing charges were filed in Sandoval County after a statute of limitations had already expired. The charges in question were initially filed in Santa Fe County, but were dismissed in 2019 by a judge who ruled they should have been filed in the county where the alleged crimes occurred.

In a Tuesday interview, Kennedy said Padilla was grateful to have the convictions vacated and plans to apply to get her certified public accountant license reinstated.

“She’s relieved it’s finally over,” Kennedy told the Journal.

Meanwhile, New Mexico Department of Justice spokeswoman Lauren Rodriguez said the agency would abide by the ruling of the state’s highest court.

“While this administration was not involved in the original prosecution, we worked through our Solicitor General’s Division to uphold the convictions that were ultimately reached by a jury,” Rodriguez said in a statement. “We respect the New Mexico Supreme Court’s opinion, and its careful consideration of the legal questions presented.”

The Padilla case also played a key role in a separate Supreme Court ruling that found parts of the state’s Governmental Conduct Act, an anti-corruption law, are too vague to support criminal charges.