Wednesday, July 16, 2008
Ruiz Gets Four Years in Insurance Scheme
By Scott Sandlin
Journal Staff Writer
Demanding charitable contributions from insurance companies has landed former state Deputy Insurance Superintendent Joe Ruiz in federal prison for four years.
The sentence includes $102,000 in restitution and a $100 penalty for each of the 30 public corruption counts on which he was convicted. It's also more than either of two former state treasurers received in connection with far bolder kickback schemes.
But prosecutors made it clear that Ruiz's insistence on his innocence, coupled with less-than-candid answers at trial and in talking to the FBI, have virtually inoculated his former boss, then-Insurance Superintendent Eric Serna, from potentially being prosecuted for the same series of incidents. Serna has not been charged.
"I'm sorry for many things. I'm sorry I ever met Eric Serna. I'm sorry I took his offer of employment. I'm sorry I took his word that everything I did was legal," Ruiz said.
First Assistant U.S. Attorney Steve Yarbrough said Ruiz attorneys Tim Padilla and Thomas Tabet had approached the government about cooperating after Ruiz was convicted, but prosecutors turned down the offer.
"The first step in dealing with a cooperator is to acknowledge guilt. The second is to tell the truth. Mr. Ruiz did neither," he said.
Yarbrough asked for a sentence comparable to that of other public officials, but more than probation. Former state Treasurer Michael Montoya, who pleaded guilty to extortion, cooperated with the FBI and testified against other defendants, was sentenced to 40 months in federal prison. Former Treasurer Robert Vigil, who was convicted of one count of attempted extortion, received 37 months in prison.
Yarbrough said Ruiz's acts sent "a message around the country that if you wanted to do business in New Mexico, you could either pay the extortion a government official required, or accept being at a disadvantage to companies willing to make such payments."
Ruiz testified at trial that when he found insurance companies with unlicensed adjusters, he offered them the option of making donations to charities, with Serna's full knowledge and at his direction. The charities were Con Alma Foundation, which Serna had founded, and a foundation that bought and distributed bilingual children's books written by Ruiz.
After a jury convicted Ruiz in January, he wrote U.S. District Judge William "Chip" Johnson to complain, in boldface type, that "the jury shot the messenger." Johnson said the letter indicated a lack of respect for the jury's diligence.
"When I wrote the letter, the words came from my heart. Maybe not my head, but my heart," Ruiz said as he stood before the judge.
Ruiz, 67, grew up poor and rose through the ranks to become a vice president at PNM and constituent service director for then-Rep. Bill Richardson and Sen. Jeff Bingaman. He said he has prayed to St. Francis, the patron saint of Santa Fe, since his indictment, and asked Johnson for a sentence that would let him see his granddaughters and continue his lifetime of public service.
Johnson said that in his analysis, giving Ruiz probation would "undermine the intent of the law."
Two attorneys in the Insurance Division and a private attorney for an insurance company, the judge noted, testified about telling Ruiz he could not have companies substitute charitable gifts for fines, but he ignored their advice.
Although Ruiz didn't personally pocket much money — $1,500 — Johnson noted that Ruiz used his position to divert monies to charities in which he or his boss had an interest.
"I am shocked and saddened because I still maintain I only did what I was told to do with the assurance that it was legal and that previous superintendents had done (the same)," he said after the sentencing. He said all the contributions had gone for bilingual books in schools that needed them.
U.S. Attorney Greg Fouratt said the case sends "an unmistakable message to current and future public servants around New Mexico: The people trust you to do the people's business, not to pick the people's pockets.
"Mr. Ruiz shook down insurance companies and diverted the money that should have gone to the taxpayers to places of his own choosing. However you slice it, however you spin it, that is theft," Fouratt said.