NM secretary of state accused of embezzlement, money laundering involving campaign money

The office of New Mexico Attorney General Hector Balderas filed a complaint Thursday alleging Secretary of State Dianna Duran embezzled and laundered money intended for her campaign into a personal bank account of hers.

The 44-page complaint says AG’s office investigators conducted an investigation after receiving a confidential tip that numerous cash deposits had been made into Duran’s account that were inconsistent with her known sources of income.

The complaint alleges the crimes were committed between March 22, 2010 and Dec. 29, 2014.

The complaint charges her with 64 total counts – four counts of embezzlement, including one of amounts between $2,500 and $20,000. It also said she committed three counts of fraud, money laundering, conspiracy, multiple violations of the Campaign Practices Act, tampering with public records, identity theft and filing a false campaign report, among others.

“This behavior has been observed too often to be followed by the subsequent transfer of funds between financial institutions including personal and campaign accounts controlled by [Duran],” the complaint says. “This behavior often culminates in large debits for cash expenditures occurring at casinos throughout the State of New Mexico.”

In the complaint, data shows that Duran withdrew $430,447.96 from ATMs at various casinos throughout the state, including $282.806.96 in 2014 alone.

$245,955.96 was withdrawn from Sandia Casino alone over the two years from Duran’s accounts, according to the complaint.

However, she reported just $10,913 in gambling income between 2010 and 2013, according to the complaint.

She and her husband, Rosaleo “Leo” Barraza reported a total income of $471,958 between 2010 and 2013.

The complaint also points to multiple instances in which she allegedly transferred money from her campaign account to personal accounts.

A check issued from her campaign account to a Tularosa man named Sean Davis, which was “endorsed” by Davis and Duran, instead went to one of her personal counts, according to the campaign.

But AG’s Office investigators talked to Davis, who said he never received a check from her, nor did he sign one, which the complaint argues constitutes proof Duran falsified records, provided false information to her campaign expenditure accounts and committed fraud and identity theft.

Balderas, a Democrat, and Duran, a Republican, have gone back and forth over the past several months over the state’s campaign finance laws.

The two announced a joint task force to tackle the issue in February, but Duran later accused Balderas of submitting three late campaign finance reports.

James Hallinan, spokesman for the AG’s Office, released the following statement Friday:

“Today we filed an Information alleging 64 criminal violations by Secretary of State Dianna J. Duran including embezzlement, fraud, money laundering, violations of the Campaign Practice Act, tampering with public records, conspiracy, and a Governmental Conduct Act violation. Our office will proceed transparently by way of preliminary hearing. Through that process, all facts supporting these allegations will be presented. That is all the information that we are able to provide at this time.”

Erlinda Johnson, Duran’s attorney, issued the following statement to KOB Friday evening:

“We have just been served with the complaint and information filed by the State Attorney General’s Office.  We can say 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.  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.”

Gov. Susana Martinez also reacted Friday evening to the complaint:

“I have spoken to the Attorney General about the charges brought against the Secretary of State. These allegations are deeply troubling and concerning, and all relevant state agencies have and will continue to assist the Attorney General throughout the process. 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.”

A preliminary hearing will come next to determine what charges Duran would possibly face. Duran won a heated race against Maggie Toulouse Oliver last December, garnering 52 percent of the vote against Toulouse Oliver’s 48 percent.

This makes three New Mexico secretaries of state in a row who have faced legal troubles for their time in office.

Duran’s predecessor, Mary Herrera, faces two lawsuits after being accused of ordering employees to collect signatures for her failed 2010 re-election bid. Former Attorney General Gary King decided there wasn’t enough evidence to prosecute her.

The secretary of state before her, Rebecca Vigil Giron, was accused of embezzling federal voter education money. She was indicted in 2009, two years after she left office.

Charges against her were dropped in 2012 when a judge ruled her right to a speedy trial had been violated.

Editor’s note: This story previously stated Herrera faced criminal charges. Though Former AG King investigated whether or not she should face criminal charges, he decided there was not enough evidence to charge her.