ALBUQUERQUE, N.M. (KRQE) - It was crooked politics at its worst and it involved millions of stolen dollars. Nearly a decade ago, high-ranking government officials and respected businessmen engaged in a high stakes game of bribery, kickbacks and fraud. When the treachery finally unraveled, the suspects were hauled into federal court for what is likely the most significant criminal case in New Mexico history.
You don't have to look very far for the scene of the crime. It's across the street from the U.S. District Courthouse in Albuquerque. Between 1999 and 2004 a corrupt gang of thieves siphoned more than $4.3 million from the construction of the Metropolitan Court Building.
"This I think was the largest amount of money and the biggest conspiracy that I have ever seen in New Mexico related to the misuse of public funds," says former New Mexico Attorney General Gary King.
"The Court Administrator, the architect, the legislator, everybody that was in the project, had gotten together to steal," Metro Judge Pro Tem Kevin Fitzwater said. Judge Fitzwater served on the Metro Court Building Committee at the time. "They betrayed our trust. We didn't know they were all going to sit around the kitchen table and wink at each other and steal," Judge Fitzwater said.
The "Gang of Eight"
The cast of characters reads like a who's who of New Mexico politics and business. At the top was State Senator Manny Aragon:
- Once one of the most powerful politicians in the state, Manny Aragon lined his pockets with kickbacks and bribes. He was indicted on federal corruption charges in 2007. "I have pled not guilty to these charges and I have one other statement to make and that is I am completely innocent of these charges," Aragon said after leaving court at his federal arraignment. But 18 months later Aragon sang a different tune. After changing his plea to guilty he was sentenced to 67 months in a federal penitentiary and fined $87,316. The U.S. Attorney at the time called Senator Aragon the 'Godfather of Public Corruption.'
- Metro Court Administrator Toby Martinez was the mastermind behind the scheme. He pleaded guilty to bilking taxpayers out of millions and was sent to prison for 67 months.
- Contractor Raul Parra paid bribes and submitted phony invoices. Following his guilty plea Parra was fined $10,000 and ordered to serve 46 months behind bars.
- Metro Court Architect Marc Schiff paid kickbacks and filed false invoices. Following his guilty plea Schiff was ordered to serve a year in a federal penitentiary.
- Ex-Albuquerque Mayor Ken Schultz was the gang's bagman. He delivered bundles of cash to Manny Aragon and was caught bragging about his political connections on an undercover FBI recording. Schultz pled guilty and drew five years' probation and a $3000 fine.
- Toby Martinez's wife, Sandra, set up a bogus company so her husband could launder his ill-gotten gains. For her crimes Sandra Martinez was sentenced to 5 years' probation.
- Construction Manager Michael Murphy pocketed a $20,000 check and was ordered to serve a 2-year probation term.
- Technology subcontractor Manuel Guara submitted inflated invoices and was sentenced to 3 years' probation.
"I think people were shocked when they saw the scheme. The amount of public money that was taken was really significant," former A.G. Gary King said.
"This case was about greed," U.S. District Court Judge William Johnson tells News 13. Judge Johnson presided over most of the corruption cases. "It was about eight individual defendants who abused positions of power and trust to obtain personal financial gain at the expense of the taxpayers," Judge Johnson said.
But prison, probation and fines were only part of the sentences. Collectively, the "Gang of Eight" fleeced taxpayers out of more than $4.3 million. At sentencing each of the defendants were ordered to pay back the money they stole.
"Restitution is part of a judgment from the court that the judge hands down," says former U.S. Attorney Damon Martinez. "It's part of the price that the defendant has to pay in a wrongful act that he or she committed," Martinez says.
Payments Received, Payments Owed
A spokeswoman for the U.S. Attorney's Office in Albuquerque said the amount of restitution paid by defendants is not a matter of public record. However, the U.S. District Court Clerk's Office and the U.S. Probation Office provided News 13 with an accounting of the restitution payments received from the Metro Court defendants as of November 3, 2017:
- Michael Murphy was ordered to pay $20,000 in restitution. That money has been paid.
- Manuel Guara's $100,000 restitution has been paid.
- Raul Parra has also paid his court ordered restitution of $601,532.
- Sandra Martinez's restitution order totaled $106,000. Martinez still owes the State of New Mexico $5,846.
- Manny Aragon is on the hook for $1,190,642. The former State Senator still owes $430,851 in restitution, and, the $87,316 fine.
- Marc Schiff's court ordered restitution was $678,015. The architect's unpaid balance is $446,719.
- Ken Schultz was ordered to re-pay the $591,370 he stole from taxpayers. Court records show the Ex-Mayor has paid $99,039.22 towards his court ordered restitution. Schultz's $3000 fine is unpaid.
- The biggest chunk of unpaid restitution belongs to former Metro Court Administrator Toby Martinez. Martinez, who is now out of prison, was ordered to re-pay $2,710,818. To date Martinez has paid back $15,913 and still owes the State of New Mexico $2,694,904.
The court ordered restitution for co-conspirators Ken Schultz, Manny Aragon, Toby Martinez and Marc Schiff includes $591,370 which is owed jointly.
"The total loss to the State of New Mexico was just over $4.3 million," Federal Judge Johnson says. "As of this interview a little over $1.9 million has been collected in restitution. Around 45 percent has been collected today," Judge Johnson said.
Under federal law, the Department of Justice has the power to collect restitution for up to 20 years. The U.S. Attorney's Financial Litigation Unit is responsible for collecting unpaid restitution.
"Whether they ever have an ability to pay is ... another issue. But the government can attempt to collect it for a lengthy period of time," Judge Johnson says.
Former U.S. Attorney Damon Martinez says it would be very difficult for a defendant to skip out on their court ordered restitution. "When (the Department of Justice) does investigations (they) try to be comprehensive and make sure that no stone goes unturned ... to find that money," Martinez tells News 13.
The Metro Courthouse construction project was completed in 2004. The 'Gang of Eight' was sentenced in 2009.
"Public trust is trust. That trust was betrayed in this case," Metro Court Pro Tem Judge Fitzwater says. "It was very important to show that those that betray it do pay the price. The justice that happens hundreds of times a day in every one of the (Metro) courtrooms is the legacy that I hope this building gives when it's run its life span. That black mark I'll always remember. But I hope at some point it is vastly dwarfed by the good that happens in this building," Judge Fitzwater said.