Former Tax and Rev secretary found guilty of embezzlement

Jun. 19—ALBUQUERQUE, N.M. — A onetime state Cabinet secretary who resigned her position in former Gov. Susana Martinez's administration in the midst of an investigation was convicted of two second-degree felonies on Friday.

A jury found former Taxation and Revenue Secretary Demesia Padilla, 61, guilty of embezzlement over $20,000 and computer access with intent to defraud or embezzle over $20,000 following a trial in 13th Judicial District Court.

Attorney General Hector Balderas, whose office led the investigation and prosecution, announced the verdicts Friday evening.

Authorities say that, between 2011 and 2013, Padilla stole more than $25,000 from a Bernalillo business, Harold's Grading and Trucking, while she was Cabinet secretary. To do so, Padilla linked her personal credit card to the business' checking account.

"Small businesses are undoubtedly the lifeblood of New Mexico's economy and should not be stifled by internal corruption," Balderas said in a statement. "We are pleased to secure justice for the significant economic harm to the victims, and we will hold any person in a position of power accountable for unlawful conduct."

Padilla will be sentenced at a later date. She faces up to nine years on each of the counts. Her attorney could not be reached by phone Friday evening.

The verdict is just the latest chapter in an ongoing saga that began in February 2015 with a call to the state auditor's fraud hotline alleging that Padilla had tried to improperly influence the department's tax audit of a former client. Then-Auditor Tim Keller launched an investigation, which was eventually handed off to the Attorney General's office.

Padilla, one of the original members of Martinez's Cabinet, resigned the position in December 2016, a day after AG investigators raided the agency in search of tax documents connected with Padilla and her husband. Roughly 18 months later, she was charged with embezzlement and public corruption.

She was accused of using her position to push for favorable tax treatment. Authorities alleged that she sought to remove penalties against a Bernalillo trucking company that had been a client of her accounting firm and that she took money from the trucking company through unauthorized fund transfers.

But, in 2019, state District Judge Mary Marlowe Sommer in Santa Fe dismissed the five ethics charges she was facing, finding that prosecutors cannot use broad language in the Governmental Conduct Act as a "kitchen-sink" approach to filing charges. The charges she was eventually convicted on were refiled in the 13th Judicial District due to jurisdiction issues.

The AG's Office appealed the dismissal of the ethics charges, but the state Court of Appeals refused to reinstate them, finding last year that two sections of the Governmental Conduct Act are too vague for criminal charges. Those parts of the law require public officials to act in a way that justifies the "confidence placed in them by the people," and for them to make reasonable efforts to avoid undue influence and abuse of office.

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Journal city editor Martin Salazar contributed to this report.