Former NM taxman charged with tax fraud

Ex-employee allegedly issued refunds into his accounts

A former New Mexico Taxation and Revenue Department employee was indicted in federal court last week in connection with a yearslong tax fraud scheme that allegedly raked in more than half a million dollars.

Authorities say 45-year-old George Martinez of Albuquerque used his position as supervisor of the Questionable Refund Unit between 2011 and 2018 to deposit fraudulent refunds of his own.

Court records allege that Martinez used taxpayer information — sometimes of dead people — to issue tax refunds into bank accounts he controlled, stealing nearly $700,000 over several years.

In all, Martinez is charged with 42 counts of wire fraud, six counts of money laundering and 42 counts of identity theft. Martinez faces a minimum of two years and a maximum of 22 years behind bars, if convicted.

Devon Fooks, an attorney for Martinez, declined to comment.

Acting U.S. Attorney for New Mexico Fred J. Federici III said in a news release Wednesday announcing the indictment, “When officials who are responsible for collecting taxes corruptly manipulate the system for their own benefit, it undermines the public’s confidence in all aspects of government. Fraud involving the tax system … deprives the State of needed revenues and increases the tax burden on all law-abiding

New Mexicans.”

Charlie Moore, a spokesman for the Taxation and Revenue Department, said Martinez, who worked for the department since 2002, was investigated internally in 2018 by the tax fraud division before the case was referred to the FBI. Martinez was placed on leave after the internal investigation began, and he left the department later that year.

“This department will not tolerate any employee abusing their position for personal gain. We will pursue those who attempt to take advantage of the state and the citizens of New Mexico,” Taxation and Revenue Secretary Stephanie Schardin Clarke said in a statement.

According to an indictment filed in U.S. District Court:

Starting in May 2011, Martinez, who was responsible for processing and reviewing questionable tax refunds, fraudulently directed refunds to “at least” six bank accounts he controlled.

Martinez did this by copying already processed returns, or creating new returns, using taxpayer information and routing the money to another account. In some instances, Martinez

used this scheme to steal nearly $60,000 in a month and almost $40,000 in a single day.

Moore said the department has since strengthened its internal controls by changing access privileges and updating procedures. Meanwhile, he said officials continually monitor daily business activity for “abnormalities and suspicious transactions.”

“The methods bad actors use to gain access to financial systems are constantly evolving. Our department continually evaluates potential threats to keep state and taxpayer assets secure,” Schardin Clarke said.