Secretary of state accused of fraud, money laundering

By Deborah Baker / Journal Staff Writer UPDATED: Friday, August 28, 2015 at 11:09 pm

PUBLISHED: Friday, August 28, 2015 at 4:13 pm

Secretary of State Dianna Duran during an interview in her office in Santa Fe on Tuesday, August 19, 2014. (Eddie Moore/Albuquerque Journal)

Copyright © 2015 Albuquerque Journal

SANTA FE – Secretary of State Dianna Duran was charged Friday in state District Court with fraud, embezzlement, money laundering and other crimes related to allegedly converting thousands of dollars in campaign contributions to her personal use in 2013 and 2014.

At the same time, it appears she was frequenting casinos across the state and withdrawing hundreds of thousands of dollars at them from accounts in her name.

1

BALDERAS: AG alleging 64 violations

Democratic Attorney General Hector Balderas alleged 64 violations in a criminal complaint and information that said Duran shifted money between campaign and personal accounts and withdrew sums at eight casinos.

Duran is a Republican in her second term; she was elected in 2010 and re-elected last year. The secretary of state, who oversees elections and campaign finance, has the role of state government ethics regulator.

The complaint says Duran violated “the ethical principles of public service” by converting intended campaign contributions to her own use.

Duran’s lawyer, Erlinda Johnson, issued a statement saying “we have identified some serious potential violations of law by the New Mexico Attorney General’s Office, in conducting the investigation.

“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. We ask the public to not jump to conclusions and we look forward to addressing the allegations in Court,” she said.

Preliminary hearing

Balderas’ office did not provide any information beyond what was in the filed documents.

“Our office will proceed transparently by way of preliminary hearing,” Balderas’ spokesman,

James Hallinan, said in a statement. “Through that process, all facts supporting these allegations will be presented.”

The alleged crimes – ranging from petty misdemeanors to third-degree felonies – mainly occurred in 2013 and 2014.

They also include violations of campaign laws, tampering with public records, conspiracy and a Governmental Conduct Act violation, according to the complaint.

Republican Gov. Susana Martinez said she had spoken to Balderas about the charges.

“These allegations are deeply troubling and concerning, and all relevant state agencies have and will continue to assist the attorney general throughout the process,” she said. “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.”

Confidential tip

According to the complaint, the AG’s office in July 2014 received a confidential tip that numerous cash deposits were made into Duran’s bank accounts that “appeared to be

incongruent when compared to known sources of income.”

An investigation revealed a pattern of large amounts of cash and campaign contributions deposited into personal and campaign accounts, the subsequent transfer of funds between the accounts, and “large debits for cash expenditures” at casinos throughout the state, the complaint said.

According to the complaint, Duran withdrew a total of $147,641 in 2013 and $282,807 in 2014 at Buffalo Thunder Casino, Camel Rock Casino, Casino Apache, Inn of the Mountain Gods, Ohkay Casino, Ruidoso Downs, San Felipe Casino and Sandia Casino from her personal accounts.

The largest chunks of the withdrawals, totaling $95,700 in 2013 and $150,256 in 2014, were at Sandia Casino.

The complaint outlines more than a dozen alleged incidents of misappropriation and misreporting of campaign contributions.

In one instance, for example, a $500 check to her campaign from lobbying firm Shoats and Weaks Inc., given after the November 2014 election, was allegedly put into Duran’s personal checking account as part of a deposit to cover an overdrawn balance.

Some other examples from the complaint:

·         In the earliest of the alleged incidents, the complaint says Duran wrote a $600 check in March 2010 to Sean Davis of Tularosa and listed it on her campaign expenditures as being for “Equipment & work on campaign.” Davis told investigators he hadn’t worked on the campaign, didn’t get the money and didn’t endorse the check.

·         In November 2014, a check was issued from Duran’s campaign account to her husband, Leo Barraza, for $2,850 for “reimbursement,” according to the complaint, but was not reported on her campaign expenditure report. The check was deposited in their joint checking account the same day a withdrawal of $4,500 was debited from the account at Sandia Casino. “Without the deposit of $2,850.00, the withdrawal at Sandia Casino could not have been realized without overdrawing the account,” the complaint said.

·         The complaint says a $5,200 contribution from oil and gas company Mack Energy Corporation in August 2014 was reported as a $2,900 contribution on Duran’s campaign finance reports. The effect of the misreported contribution was to keep the total reported contributions from the company to Duran that year at $10,400, rather than the $12,700 it actually gave, according to the complaint. The $10,400 figure is the maximum a statewide candidate can take from a contributor.

Officials at odds

There has been a rift in recent months between Duran and the Democratic attorney general over campaign finance reporting and enforcement.

The two formed a task force in February to study the issue. It met twice, and Balderas issued final recommendations on his own, including mandatory fines for violating the Campaign Reporting Act. He also said he was concerned about lack of enforcement in the Secretary of State’s office.

Duran, in turn, accused Balderas of filing three late campaign finance reports a few years ago. She was wrong about two of them – which was blamed on a staffer – and Balderas said the errors pointed up flaws in her office’s operation.

Attorney general cuts ties with secretary of state's office - SFGate                       http://www.sfgate.com/news/crime/article/Attorney-general-cuts-ties-wit...

http://www.sfgate.com/news/crime/article/Attorney-general-cuts-ties-with-secretary-of-6540172.php

Updated 10:15 am, Wednesday, September 30, 2015

ALBUQUERQUE, N.M. (AP) — The

state attorney general's office says it will no longer provide Secretary of State Dianna Duran's office with legal advice or handle campaign finance complaints referred by Duran's office.

Attorney General Hector Balderas in a letter Tuesday said Duran's office would have to find alternative legal representation while the criminal case against Duran is pending, KOB-TV

reports (http://bit.ly/1OGeiRg). Duran is facing fraud, embezzlement and money laundering charges.

"Although not made lightly, I believe that the decision to discontinue our legal representation of the SOS while the criminal proceedings are pending will facilitate the operations of both our offices," the letter states.

The attorney general represents state entities in legal battles and handles campaign finance investigations referred by the secretary of state's office. Balderas returned 31 campaign finance civil complaints to Duran's office and recommended that the cases now be referred to district attorneys.

"In light of the ongoing criminal complaint, I believe the most prudent course is to return the 31 referred matters to the SOS," Balderas wrote. "Although I understand this may cause some inconvenience for your office, the (Campaign Reporting) Act authorizes the SOS to refer these and other civil matters for enforcement to the district attorneys, as well as to the OAG."

Attorney general cuts ties with secretary of state's office - SFGate                       http://www.sfgate.com/news/crime/article/Attorney-general-cuts-ties-wit...

The attorney general filed a 64-count complaint against Duran Aug. 28, alleging Duran funneled campaign donations into personal accounts and falsified campaign finance reports. She has also been accused of withdrawing large sums of money while at casinos around the state.

In a statement sent by Duran's spokesman, Ken Ortiz, Duran called the latest move by the attorney general's office political.

"The Attorney General has created a 'conflict of convenience.' Although he believes there is no conflict in prosecuting his own client, the Secretary of State, the Attorney General now believes he has a conflict with investigating other candidates and political committees who may be his political friends."

Information from: KOB-TV, http://www.kob.com

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Secretary of State Dianna Duran cuts her losses                                                                                                        http://www.currentargus.com/story/opinion/columnists/2015/10/27/secre...

Secretary of State Dianna Duran cuts her loss

(Photo: Courtesy Photo)

It had to have been a stressful time for Dianna Duran.

Almost week earlier, as New Mexico’s then Secretary of State, she had annou hearings on a batch of self-advertised “reforms” in the rules governing state e

The hearings would be public and were to take place on Friday, Oct. 23, even charges for such felonious conduct as embezzlement, money laundering and

Onlookers were baffled. How could anyone facing charges of such magnitude impeachment by the state House of Representatives--make bold to hold heari time when many New Mexicans had reasons to question her integrity?

Was this just a cheeky stunt of some sort? Or was it measure of how clueless never know the entire story. What we do know now is that there would be no h

least not in the tenure of Dianna Duran as New Mexico Secretary of State.

Around midnight on the evening of Thursday, Oct. 22, Duran dispatched a letter to Gov. Susanna Martinez submitting h State. The following morning, shortly after 8:30, she and her attorney Erlinda Johnson were in the courtroom of Judge T entered into a plea agreement on six of the 65 charges against her—two of which are felonies, four misdemeanors.

Prosecutors in the case, led by state Attorney General Hector Balderas, accepted the agreement, but the case is not ov

On Dec. 14 Duran and presumably attorney Erlinda Johnson will be back in Judge Ellington’s courtroom, where the form sentencing for the crimes to which she has pled guilty.

The two felony crimes could land her in prison, which she would like to avoid, of course. What’s more, Attorney Genera amenable to accepting a pardon in lieu of jail time.

Nonetheless it is within the judge’s authority to impose a prison term for Duran.

Lurking behind the criminal conduct to which Dianna Duran has confessed is a sickness that may have figured into her f agreement, the former secretary is required to seek professional help in coming to grips with an apparent predilection to campaign contributions she is accused of having illegally diverted to personal rather than political use were by all accou sizeable gambling losses at sundry local casinos.

As one wag coyly put it, “It’s as though the casinos became her banks for laundering money.

What we have here, of course, is a warning made familiar by gambling opponents and critics back in the 1980s when th with authorizing tribal casinos in New Mexico. Who knew that in time the affliction would so publicly visit itself on a high