NM secretary of state charged with fraud, embezzlement, money laundering

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Read the full criminal complaint against Dianna Duran here.

New Mexico’s attorney general formally accused Secretary of State Dianna Duran on Friday of fraud, embezzlement and money laundering in a 64-count criminal complaint alleging Duran improperly used campaign funds for personal gambling.

Dianna Duran

Courtesy photo

Dianna Duran

Attorney General Hector Balderas also alleges violations of campaign laws, tampering with public records, conspiracy and violations of the Governmental Conduct Act in the complaint, which was filed Friday in district court in Santa Fe.

In short, the statewide elected official whose office oversees the state’s campaign finance and reporting system is accused of criminally abusing that system.

The allegations center around Duran moving money between personal and campaign accounts and in some instances not reporting campaign donations. The complaint states that the transfer of funds “often culminates in large debits for cash expenditures occurring at casinos throughout the State of New Mexico.”

Duran’s attorney, Erlinda Ocampo Johnson, told NMPolitics.net that, “in reviewing the complaint, we have identified some serious potential violations of law by the New Mexico Attorney General’s Office in conducting the investigation.” She said the AG may not have followed the law on convening grand juries and obtaining subpoenas.

“Once these issues are fully researched and briefed, we will file a motion to dismiss the complaint,” Johnson said.

Details from the complaint

The complaint details allegations related to a number of bank transactions of a few hundred or thousand dollars apiece. But the alleged crimes relate to large amounts of money being debited from accounts Duran controlled at New Mexico casinos.

Duran and her husband reported income of $137,667 in 2013, the complaint states. That included $4,513 in “gambling income.” That year, according to the complaint, $147,641 was electronically debited from accounts controlled by Duran at several New Mexico casinos.

Then, in 2014, $282,806.96 was debited from accounts controlled by Duran at New Mexico casinos, according to the complaint.

This chart from the criminal complaint allegedly shows electronic debits at casinos from accounts controlled by Duran in 2013 and 2014.

This chart from the criminal complaint allegedly shows electronic debits at casinos from accounts controlled by Duran in 2013 and 2014.

As an example of the alleged criminal activity, the complaint states that Duran never reported a Dec. 22, 2014 campaign contribution of $500 given by the lobbying firm Shoats and Weaks Inc. several weeks after Duran was re-elected. Duran instead deposited the check into her personal account, according to the criminal complaint.

The company reported the contribution on a lobbyist reporting form. Lobbyist Marla Shoats told investigators she intended it as a campaign donation, the complaint states.

The check includes the acronym “CTE” — short for committee to elect — which makes clear it was intended as a donation, the complaint states.

The allegations go back to at least 2010, when Duran was a senator and running for secretary of state. That year, according to the complaint, Duran issued a $600 check from her campaign to Sean Davis of Tularosa. The check was endorsed “with a signature that appears to be Sean Davis and endorsed a second time” by Duran, according to the complaint. It was deposited in Duran’s personal account, the complaint states.

Davis told investigators he didn’t work for Duran’s campaign — though he did walk in a parade in Alamogordo for her sometime in 2010, according to the complaint. Davis said he was never paid. When showed the check, he said he did not endorse it, the complaint states.

‘We hope this is not a politically motivated case’

Johnson, Duran’s attorney, provided this response when asked to elaborate on the “serious potential violations of law” she alleges the AG’s Office may have committed during the investigation:

We’re in the process of researching the legal issues but I am aware that the AG’s office convened two separate grand juries (Bernalillo and Sandoval Counties) but charges were filed in Santa Fe. The grand jury statutes are clear that grand juries may investigate potential offenses that occur within the county over which they have jurisdiction, meaning within the county in which they sit. Also, a grand jury shall be convened by a district judge and shall charge it with duties and direct it as to any special inquiry into violations of law that he wishes it to make. NMSA § 31-6-9. There are questions about whether these two separate grand juries were convened by a district judge or at the behest of the Attorney General, in violation of the statute. Also, subpoenas for Ms. Duran’s banking information may not be in compliance with state law. Once these issues are fully researched and briefed, we will file a motion to dismiss the complaint.

“We hope this is not a politically motivated case and that the attorney general is not engaging in a selective prosecution of a political adversary,” Johnson told NMPolitics.net. “We ask the public to not jump to conclusions and we look forward to addressing the allegations in court.”

Duran is a Republican. Balderas is a Democrat.

The AG’s office said additional information beyond what’s in the complaint would come out in a pending preliminary hearing. “That is all the information that we are able to provide at this time,” AG spokesman James Hallinan told NMPolitics.net.

A spokesman in the Secretary of State’s Office did not immediately respond to a request for comment.

Duran, a former state senator, is in her second term as secretary of state and is not eligible to seek re-election next year. She’s the first Republican to hold the office since 1928.

Gov. Susana Martinez, a Republican, said she’s spoken with Balderas about the charges against Duran.

“These allegations are deeply troubling and concerning, and all relevant state agencies have and will continue to assist the attorney general throughout the process,” Martinez said in a statement to NMPolitics.net. “It’s important that New Mexicans understand that no one is above the law and that every New Mexican is treated equally under our system.”

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