Drawn-out white-collar crime cases leave all sides in legal limbo
Dismissal rates down, but slow prosecution, lax deals clash with calls for justice
It’s an interesting quirk of the criminal justice system.
Steal a six-pack of beer or some steaks from a grocery store, and you are almost guaranteed to pay more in court fees than the items you pilfered were worth. But skim thousands of dollars bit by bit from a public agency or private individual, and your worst punishment is likely to be an order to pay back the money — or only part of it — over time.
Prosecutors and defense attorneys alike say white-collar crimes such as fraud, forgery and embezzlement are headaches because they require more time and expertise than other cases for a variety of reasons, not the least of which is their complexity. The cases more often involve following a paper trail than finding a smoking gun, and an accountant’s expertise can be needed to identify a crime and prove a case.
And the fact that incarcerating white-collar criminals makes it almost impossible for them to pay back their victims means the cases often are resolved through plea deals that require probation, often unsupervised, and restitution. Even so, money paid back by white-collar thieves is not always for the full amount taken.
A survey of felony fraud and embezzlement cases in the judicial district covering Santa Fe, Rio Arriba and Los Alamos counties for the past three years reveals that former District Attorney Angela “Spence” Pacheco had a tendency to dismiss fraud and embezzlement cases. She dropped about 60 percent of them in 2014.
That figure declined to about 35 percent in 2015, the last year Pacheco was district attorney. The dismissal rate plummeted to about 15 percent under interim District Attorney Jennifer Padgett, who ran the office for most of 2016 and has remained on staff under Marco Serna. He was elected district attorney last fall and took office in January.
But the improved statistics don’t mean cases are being resolved. In many instances, they linger in legal limbo, somewhere between being charged in Magistrate Court and being refiled and prosecuted in District Court.
Serna says he’s working to clear a backlog of more than 50 white-collar theft cases, most about a year old, that he inherited when he took office. But he says he’s limited in what he can do because he has only one attorney on staff equipped to handle them.
He said he’s made it a priority to review cases that might be reaching the point where the statute of limitations for them to be prosecuted will expire, “so they don’t fall through the cracks.”
Serna acknowledged that failures to prosecute whitecollar crimes are a sore spot.
“It’s frustrating for the community,” he said. “They are like, ‘Why aren’t these people being put in jail?’ ”
Even plea bargains don’t always satisfy calls for justice. They often contain conditional discharge provisions, meaning offenders won’t end up with a felony record if they comply with the terms of the deal. This usually means paying back the money they stole. That can send a confusing message to the community and may even embolden would-be criminals.
That is why, he said, he’s changed the plea policy in his office, directing assistant district attorneys to only make deals that require offenders to pay back the money they stole “dollar for dollar.”
“I want to make sure people know that if you are going to embezzle $30,000, you are going to have to pay it back in full,” he said. “I’m pushing for full restitution.”
Still, a number of notable cases in Santa Fe, Los Alamos and Rio Arriba counties remain pending for periods long enough to suggest that justice delayed is indeed justice denied.
In December 2015, Santa Fe police opened an investigation into allegations that Dian Zeemin and her partner, Joseph Rosko, had stolen $340,000 from a World War II veteran in his 90s. The veteran, Dennis Ferk, hired them in 2010 to look after his financial affairs.
The couple are accused of obtaining about a dozen credit cards in Ferk’s name and that of his late wife, cashing in some of his insurance polices and trying to take a loan out on his home.
A year later, police arrested Zeemin and Rosko. But Rosko’s case has been delayed by efforts to determine whether he’s fit to stand trial. Charges against Zeemin were briefly dismissed on a technicality before being refiled in April.
The case against her, which alleges crimes committed between 2010 and 2015, is pending. Jury selection is scheduled for November.
“It’s not been a good experience, to be honest,” said Gilbert Martinez who now has power of attorney over Ferk’s affairs and acts as a liaison between him and prosecutors. “… As I told [prosecutors who worked on the case], I need justice. This happened to a World War II veteran. Not to mention he has a handicapped daughter and [the defendants] physically and emotionally and financially abused the Ferks.”
It wasn’t an isolated breakdown in the system.
In July 2016, Carmella Chavez, then a manager at El Mirador Home Care, was fired from her job and charged with embezzlement. She allegedly spent $4,000 using a debit card belonging to one of her elderly clients.
The amount of money Chavez was accused of stealing, “more than $2,500 but less than $20,000,” meant the case was classified as a third-degree felony. Felony charges can’t be adjudicated in Magistrate Court, so cases that start there with a police report are dismissed and then refiled in District Court office by the district attorney’s staff.
The Magistrate Court case against Chavez was dismissed under this protocol in December 2016. But nine months later, the charges still have not been refiled, leaving the alleged victim without any attempt at justice or restitution.
That leaves Chavez, who has said she’s innocent, wondering if and when she’ll be called to answer for the crimes she’s accused of committing.
Serna said the prosecution of Chavez had to be put on hold when the assistant district attorney handling the case quit to take another job. Serna said he had only two prosecutors adept at such cases.
“We had to assign that to another attorney,” Serna said. “But we fully intend on going forward with that case.”
Cases involving theft from businesses don’t seem to move though the legal system any faster.
In April 2016, police arrested former Wells Fargo bank teller James Edwards on suspicion of embezzlement and forgery. He allegedly withdrew $8,000 from various customer accounts. Edwards even confessed, according to a police report.
A month later, the charges were dismissed in Magistrate Court. Now, a year and half later, the case against him still has not been refiled in District Court.
Serna said the attorney handling that case is on family leave. When he returns in October, the case will be presented to a grand jury, the district attorney said.
Similar pitfalls stall cases in the public sector.
In April, State Auditor Tim Keller concluded that Henrietta Trujillo, former finance director of Northern New Mexico College, might have stolen more than $200,000 from the school. In an audit of the college, Keller said Trujillo had essentially admitted in February to stealing $71,000 in cash and $135,000 in checks. Keller turned the investigation over to state police and Serna, but charges still haven’t been filed. The reason for this delay? Serna said an “admission letter” from a suspect is part of the evidence. But, he said, state police are still completing their report.
“As you can imagine, the forensic audit on that large of a school just took a little while,” Serna said. “That case most certainly will be taken to grand jury. We fully intend on prosecuting her. We just wanted to make sure we didn’t miss anything. It was a ton of information to go through.”
Jake Arnold, a supporter of the college, said he checks the court website daily to see if there has been any movement in the case.
“People up here are still curious,” Arnold said. “There was all this embezzlement. What was the resolution to that? And we haven’t seen anything. There is still a lot of mystery and confusion about what happened. We are talking about hundreds of thousands of dollars in this instance.”
Chief Public Defender Morgan Wood said it’s important to remember that defendants are innocent unless proven guilty. Being accused of a crime and in many cases losing one’s job as a result of the charge is wrenching, she said. So is waiting weeks, months or even years to see if you’ll be prosecuted or be able to clear your name, Wood said.
But between high dismissal rates, long adjudication times, lenient plea deals and painstakingly slow restitution plans, victims and the community can be left with the impression that whitecollar crime does indeed pay.
In June 2016, Thomas Gaylor was charged with embezzling more than $20,000 from La Asociación de Acequias Norteñas de Rio Arriba while acting as the organization’s treasurer. He pleaded guilty in March and was sentenced to three years’ probation and ordered to pay back the money. But a restitution plan wasn’t put in place until July, and as of mid-September, the organization hadn’t seen a cent, said its president, Medardo Sanchez.
“I’m not really happy. This case has been going on for a couple of years. … We don’t have a lot of money,” Sanchez said. “All of us are poor acequia people. He really set us back. Basically, the legal system is such that it pays to be a crook.”
District Attorney Marco Serna says he’s working to clear a backlog of more than 50 white-collar theft cases, most about a year old, that he inherited when he took office. But he says he’s limited in what he can do because he has only one attorney on staff equipped to handle them.