N.M. Fraternal Order of Police Probed For Embezzlement

April 15--SANTA FE -- A suspected embezzlement scheme at Santa Fe's Fraternal Order of Police has led to a criminal investigation and caused significant financial woes for the local lodge.

The FOP, the State Police and the District Attorney's Office have confirmed that there is an active investigation into financial wrongdoing alleged to have taken place at the FOP four or five years ago.

No charges have been filed. And it's unknown how many people may have been involved, how much money may been stolen or whether any law enforcement officers are being investigated.

The Journal has learned a former civilian employee of the FOP is being investigated for possible involvement. She told the Journal last week she's heard she may be a target but denies doing anything wrong.

The New Mexico Gaming Control Board has put conditions on the gaming license for the FOP, which relies on slots revenues and bar sales for its survival, and they include keeping the ex-employee away from gaming operations.

In any case, the nonprofit FOP is in a financial hole that members are struggling to climb out of.

FOP attorney Rosanna Vazquez said lodge board members were taking "drastic measures" as recently as two years ago just to stay afloat financially. Employees weren't being paid for weeks so the FOP could catch up on bills. A board member even took it upon himself to take FOP garbage to the dump because it couldn't afford trash service.

Operating costs are under control now. But the FOP has significant tax problems. The lodge is behind on paying property taxes going back to 2009. As of early this month, the total due is more than $42,000, according to a Santa Fe County Treasurer's Office tax statement.

Vazquez said the "taxes are killing them because of interest" and acknowledged that the property tax problems "have resulted from what happened" during the time when money started going missing.

Vazquez, who took over as attorney in 2010, does not know just how much money was taken or how FOP funds went missing. "It's difficult to ascertain how much money is involved," the attorney said.

Despite the property tax problems, the FOP has been able to hold on to its building off Airport Road in part because Vazquez, with the help of the DA's Office, has submitted documentation to the state Taxation and Revenue Department's Property Tax Division, letting them know that there is an active criminal investigation.

Vazquez and FOP second Vice President Adam Gallegos said the FOP has made payment arrangements on the amounts owed. "We've been in the hole for a long time," Gallegos said. "We've reached an agreement on the taxes, but it's going to take time for us to pay it all back."

Forms show losses

The FOP's financial disclosure forms -- such documents are required of all nonprofits -- show that the lodge's finances started getting out of hand around 2008. That year, the FOP's expenses of more than $313,000 far surpassed $200,137 in revenue. That $113,751 loss was on top of a negative revenue of $21,675 from the prior year, the FOP's Form 990 documents show.

Gallegos said it's important for the DA's Office to present indictments in this case, because it helps the FOP with insurance claims.

The timing of the FOP's revenue problems coincides with action taken against the lodge by the state Gaming Control Board. The FOP, like many fraternal organizations, has a license to operate slot machines.

The FOP's license was suspended by the board for about three months in 2008 "to assure that all gaming reports were in compliance and to train (a) new gaming manager and gaming accountant," according to the FOP's 2008 Form 990 disclosure.

That year, the gaming board and the FOP reached an administrative settlement agreement over alleged violations of gaming regulations. Those included "failing to exercise discretion and sound judgment in the operation of the activity authorized under the license" and "failing to follow, or to ensure that employees follow, the minimum internal controls."

After reaching a settlement agreement with the gaming board, the FOP has had its gaming license renewed annually, but with conditions directed at two employees.

The gaming board has ordered that the FOP "not allow Margaret Dubois or Benito Gonzales to be involved in gaming in any way, including maintaining custodial control of gaming documents," according to Gaming Control Board meeting minutes from October 2010 and 2011.

Gonzales is a former FOP gaming manager who is now the board president. Vazquez said Gonzales' name came up in the FOP's issues with the gaming board via a misunderstanding. The District Attorney's Office has confirmed that Gonzales is not a target of any criminal investigation

As for Dubois, the DA's Office would not comment on whether she's a suspect. But Dubois said last week she's long suspected that she's under investigation.

Reached Thursday, Dubois denied taking any FOP funds. "I kind of feel I'm being used as a scapegoat," Dubois said. "I've lost contact with everyone I worked with there."

Dubois was fired from her position as FOP secretary around 2009, more than 10 years after she first joined the organization. She said that, before being fired, she "tried to get down to the bottom of issues regarding the gaming" at FOP. "I tried to help," she said. "I was really in over my head."

Dubois said that a "lack of checks and balances within the organization" is what led to money going missing, but she didn't know how that happened, or who was responsible.

Vazquez said the fact that things got so bad for the FOP's finances disturbs members of the lodge, which provides assistance to sick officers and scholarships for Santa Fe area youngsters.

"It's a shock to anybody, member or not, that an organization like this FOP, that does so much good for the community, is having these kinds of issues," Vazquez said. "Nobody should have to deal with this kind of stuff."

Copyright 2012 - Albuquerque Journal, N.M.