Two years after an embezzlement scandal rocked Española City Hall, the accused are ready to stand trial.
Former finance director Josie Lujan, payroll specialist Trudy Gallegos, and Española Police officers Vince Crespin, Marvin Armijo and Gabe Gonzales all face criminal charges stemming from the alleged embezzlement of about $100,000 from city coffers, court records state.
Each defendant pleaded not guilty except Gallegos, who accepted a plea deal, online court records show.
Gallegos pleaded guilty last November to one count of racketeering, a second-degree felony; one count of committing an official act for personal financial gain, a fourth-degree felony; and one count of tax evasion, a second-degree felony, the plea agreement states. Gallegos, who worked for the city from 2007 to 2009, also agreed to pay $89,256 in restitution — $84,054 to the city and $5,202 to the state, records show. She could face up to 12 years in jail for those charges.
Crespin and Armijo could each face 10.5 years in prison if convicted of two felony charges of racketeering and larceny, according to court records. Gonzales faces two larceny charges and a racketeering charge for which he could spend 12.5 years in prison. Lujan faces three counts of embezzlement, three counts of computer access with intent to defraud, three counts of tax evasion, a count of racketeering and a misdemeanor charge under the state Public Officers and Employees Act. She could face a 32.5-year sentence under state law.
At a hearing last week, a jury trial for Crespin, Armijo and Gonzales was set for Aug. 15, Gonzales’ attorney Andras Szantho said. An online court database shows the trial will be held in state District Court in Tierra Amarilla.
Szantho said Gallegos will be a key witness in the case. He said he has yet to speak with her to determine what she is going to say in her testimony.
In the plea agreement, Gallegos admits she and Lujan received city funds via unauthorized checks they printed through the city’s accounting software. The agreement also states the two provided Crespin, Armijo and Gonzales with extra money via their paychecks.
Both Szantho and Armijo’s attorney, Willie Maez, argued the city is the one to blame for the financial mishandling.
“I think it’s pretty obvious that the city’s finances and accounting was totally messed up,” Szantho said.
Maez said there was no oversight over the city’s money.
“(Prosecutors) have a serious problem with their case,” he said. “The city is the one at fault.”
Both attorneys say their clients are innocent and unknowingly received the extra money.
Szantho said police officers’ paychecks aren’t a flat amount every two weeks but can vary based on how much overtime an officer works, meaning Gonzales wouldn’t necessarily have noticed if he was receiving extra money to which he was not entitled.
“Every check is different,” he said. “There are huge swings (in the amount).”
Szantho said the officers returned the money in 2009 once they were informed they weren’t entitled to it.
In order to convict the three officers, Maez said there would have to be probable cause to believe those payments were made with their knowledge and consent.
Gallegos’ plea agreement states the officers “were not entitled to receive the disbursed monies and knew they had received the monies by fraudulent means.”
Armijo is currently working for the Santa Clara Tribal Police Department, Maez said. Szantho said his client is currently working in Los Alamos, but didn’t know what he is doing.
While Lujan’s charges are combined in the same case at the three officers, Lujan’s attorney Cindy Turcotte said her client’s trial date had not been set because the judge didn’t give her a notice for the pre-trial hearing. A notice of the hearing was posted May 4 to the state’s online court records database.
All eight judges in the First Judicial District either recused themselves or were challenged because of possible conflicts of interest, according to the database and Maez.
Judge Thomas Hynes, the presiding judge in Aztec in the 11th Judicial District, will oversee the trial, records show.
A call to Deputy District Attorney JoHanna Cox, the prosecutor in charge of the case, was not returned.
City Investigation
The city has yet to determine the exact amount of money allegedly stolen or exactly how it was stolen. State Auditor Hector Balderas tasked the city’s Finance Department with sorting through five years of payroll and other finance records to reconcile recorded expenditures with money in, or missing from, the city’s bank accounts.
A call to the State Auditor’s Office was not returned.
Former administrative services director Ron Archuleta said last month his staff was assembling payroll documents to be scanned into an audit system, which detects irregularities, in order to determine how much loss occurred. He said his staff still had to conduct an accounts payable audit.
Archuleta resigned May 16 with city staff still working on the audits.
City Manager James Lujan said he would oversee the city’s finances after Archuleta resigned, but Mayor Alice Lucero said Lujan had appointed accountant Joyce Sandoval as Archuleta’s interim replacement.
Lucero said she was pleased to hear the trial had been scheduled. She said she would like to attend the hearing to see what happened.