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We continue to accomplish many goals and strive to meet a high quality level of service. I am highlighting a few accomplishments recently achieved during my administration: Medicaid Fraud and Elder Abuse Division Prosecutors in the Medicaid Fraud and Elder Abuse Division were recently successful in prosecuting a Las Cruces Medicaid provider and four individual defendants for Medicaid fraud. Counseling and Mediation, LLC, and Arcilia Holguin, the owner of Counseling and Mediation, were indicted in April 2010 on various counts of Medicaid Fraud, Fraud, and other related charges. Testimony elicited at trial demonstrated that Ms. Holguin and several employees were failing to provide the services they had contracted with Medicaid to provide, altering documentation to make it look like they were providing an appropriate service and billing outrageous amounts of time for providing certain services. The state showed that numerous employees, supervisors and Ms. Holguin were aware of and often directed the fraudulent activity at Counseling and Mediation. The state showed that Ms. Holguin and Counseling and Mediation, LLC, overbilled Medicaid in the amount of $218,132.38, as a result of the successful prosecution. The corporation is also potentially subject to $500,000 worth of fines for the felony convictions, under Section 30-44-7 (G) of the Medicaid Fraud statute. The four defendants in this case received a guilty verdict on all counts. The first defendant pled guilty to Medicaid Fraud and must pay restitution. A second defendant was found guilty at trial in June 2011, on one count of Fraud over $20,000 (second degree felony) and one count of Medicaid Fraud - Excessive Claims (fourth degree felony). He was sentenced on November 4, 2011 and received 14 months in State prison, 3 years supervised probation, and restitution. Arcilia Holguin and Counseling and Mediation Services, LLC, were tried on November 4, 2011 and were both found guilty on all the counts submitted to the jury. Sentencing for these defendants has not yet been scheduled. Border Violence Division Human Trafficking Cases: BVD successfully convicted the first human trafficker charged under the New Mexico statute. We also have two additional cases awaiting trials and another three cases which will proceed with federal prosecution. Currently the BVD has at 4 additional human trafficking cases open that were recently charged. Money Laundering: BVD continues to work with attorneys general from AZ, CA and TX as a member of the Southwest Border Anti-Money Laundering Alliance (SWBAMLA) in order to
enhance and better coordinate investigations and prosecutions of money laundering as well as crimes related to the trafficking of narcotics, weapons and human beings along the border. We have established the New Mexico Anti-Money Laundering Alliance consisting of New Mexico state, local and federal officials to provide New Mexico law enforcement and prosecutors with resources to effectively investigate and prosecute cases involving money laundering. International Extradition Cases: A fugitive was successfully extradited from Mexico (July, 2011). In another case, the Office of International Affairs/Department of Justice approved our request (September, 2011) for a Provisional Arrest Warrant and has submitted the request to Mexico. This fugitive is wanted to stand trial in New Mexico, for murder, kidnapping and related charges in three separate State cases. Most recently, (November,2011), an extradited felon who raped his twelve year-olddaughter , plead no contest to Criminal Sexual Contact of a Minor Under the Age of 13, a second Degree Felony (7 other counts were dismissed). The Defendant was sentenced to 15 years with 6 years suspended and will be on supervised parole for no less than 5 years and his supervised parole can run for the felon’s lifetime. This sentence will affect his immigration & naturalization status as there is a mandatory deportation. Within 10 days of his release date, the defendant must register as a sex offender and must not initiate any contact with the victim. After his nine year term is served in the NMDOC, he will be deported, and not allowed to enter the US. If he does so, he will have to serve-out the remaining six years left on his sentence. Government Accountability Division Jerome Block, Jr. pled guilty to violations of NM's campaign reporting laws, embezzlement, conspiracy to violate the election laws, fraudulent use of a state credit card and other charges, in both the 2009 case and the new case filed in September, 2011. An expensive and lengthy impeachment process was avoided. Mr. Block, Jr. must pay restitution for all public funds misused, is in a court-run drug treatment program, and will not face sentencing until that is completed. He faces 4.5 years imprisonment. Due to Mr. Block, Jr.'s acceptance of all responsibility for the campaign reporting violations, the charges against his father, Jerome Block, Sr., have been dismissed. Former Secretary of State Rebecca Vigil-Giron, along with Elizabeth Kupfer, Joseph Kupfer, and Armando Gutierrez, are charged with fifty felonies relating to a $6 Million HAVA media campaign. The AGO signed a Joint Powers Agreement with the Second Judicial District Attorney's Office to hire a contract special prosecutor, with the AGO paying the costs. Mr. Joseph Campbell, a former Deputy DA in the First Judicial District, was awarded the contract and has taken over the case. In December, 2010, two of the defendants were indicted in federal court on three counts of tax evasion. A superseding federal indictment filed in July, 2011, added a third state defendant, and charges of theft, money laundering, obstruction of justice,
obstruction of a federal audit, income tax evasion and conspiracy, based on the same facts as the State case. The federal charges are a result of the 2.5 year collaboration between the AGO, the FBI, the IRS, and the United States Attorney's Office. Consumer Protection Division In June 2009, the New Mexico Attorney General filed suit against Cash Loans Now and American Cash Loans, small loan lenders from Illinois who make loans in New Mexico at the rate of 1147% to 1500% APR. This case was filed under the New Mexico Unfair Practices Act and the New Mexico common law claiming that these loans were substantively unconscionable and that the marketing and loan origination practices of the companies were procedurally unconscionable. In December 2010, the First Judicial District Court, Honorable Judge Sarah Singleton, ruled that several of the Defendants’ marketing and loan origination practices were unconscionable and violated New Mexico law. For example, the Court found that these companies repeatedly solicited borrowers with open or active loans to rollover their loan obligations and increase their debt or take out a new loan –thus keeping the borrower in a cycle of debt. The companies would quote an understated daily rate of interest to the borrower when marketing the loan to make the loans seem less expensive. These companies also did not disclose that payment on these high cost loans went to interest only for a substantial portion of the loan term. The Court found that the lenders’ marketing practices were procedurally unconscionable taking into consideration the borrower’s lack of meaningful choice and sophistication and the presence of deceptive practices. The Court has now enjoined these lenders from continuing the unconscionable loan origination and marketing practices. While we also asked the Court to find that the loans were unconscionable on their face because of the toxic combination of exorbitant interest rates and prolonged repayment terms, and although the Court found these loans to be shocking, the Court denied this second claim largely because she thought the issue was more appropriate for legislative resolution. Consumer intake calls continue to increase –the division received more than 20,300 calls from consumers in FY 2011. There were 2,975 new written complaints filed and a total of 3,249 complaints closed. The Consumer Protection Division recovered over $3 million for consumers in fiscal year 2011. The Consumer Division continues to monitor the endless number of scams that are increasingly plaguing consumers. Through community education, outreach, scam alerts to consumers and media and a counterfeit check database, the Attorney General and staff provide consumers the information they need to help avoid becoming victims of a scam or identity theft. Staff presented 51 community outreach and education events to New Mexicans throughout the state on consumer protection issues.
Water, Environment and Utilities Division The Water, Environment and Utilities Division (WEU) filed suit against the United States Department of Interior to strike down the 2008 Operating Agreement for the Rio Grande Project which the Attorney General contends illegally takes water that should be allocated to New Mexico farmers and allocates it to farmers in the State of Texas. Prior to filing suit, the Attorney General requested and received an appropriation from the Legislature to bring the lawsuit. WEU successfully settled the groundwater natural resource damage claims against Freeport McMoran Inc. for $13 million. The Attorney General intervened in the PNM rate case where PNM was seeking a rate increase of approximately $165 million, including an increase of 25% for residential customers. In negotiations the company agreed to limit the increase to 10%, saving customers millions of dollars each year. Prosecutions Division and Special Investigations Division/Internet Crimes Against Children Unit The DWI Resource Prosecutor successfully prosecuted several challenging DWI cases. Cases include State v. Vigil (police officer defendant), State v. Nieto (attorney defendant), and State v. Ortega (prosecution office relative). Pending trials and appeals include State v. Alfred Lovato (defendant is passenger in Fierro vehicular homicide), State v. Abraham Baca (former state police officer), and State v. Alsop (defendant was drinking with local government attorney on night he was arrested for DWI-case presently with Court of Appeals). The Internet Crimes Against Children (ICAC) subdivision has increased the number of felony ICAC prosecutions from a handful in 2007 (4) to more than 22 felony prosecutions from August 2010 to 2011. AGO ICAC is ensuring that more offenders are being held accountable for their criminal behavior. In one of many two week operations, the ICAC task force executed 22 unrelated federal and state search warrants throughout the state; seizing computers and computer-related evidence related to child pornography offenses. Eight individuals were arrested for violating federal and state child pornography laws as part of operation. Over the last fiscal year, the ICAC task force has conducted 559 investigations, made 97 arrests, and completed 1,685 forensic exams throughout the state. The ICAC Task Force now has eight forensic labs located throughout the state. Labs are staffed with certified forensic examiners.
The AGO ICAC unit, along with statewide task force members, continue to provide training on internet safety and prevention throughout the state reaching over 8,000 participants. Litigation Division Lawyers in the Litigation Division have successfully prosecuted several actions against professional licensees including dentists, real estate appraisers, pharmacists, counselors, therapists, and police officers who have violated either the laws of the State of New Mexico or the regulations of the licensing board to whom they ultimately answer. The Division has also expended significant time and resources to protect the multimillion dollar annual payments made to the State of New Mexico by large tobacco manufacturers such as Phillip Morris and Lorilard. The Division is representing the State Investment Council in its effort to recover funds paid to undisclosed third party placement agents, such as Marc Correra, in connection with hundreds of millions of dollars of State investments. Criminal Appeals Division The highlight of the year was the preparation of the briefs and the appearance of Gary King for oral argument before the United States Supreme Court in Bullcoming v. New Mexico. In this case, two merits briefs were filed, amicus filings were solicited and coordinated, and the preparation for the oral argument in March 2011 involved the UNM School of Law, NAAG and the Heritage Foundation. James Grayson, Victoria Wilson, Ann Harvey, and Margaret McLean participated in Bullcoming. Although the 5-4 opinion reversed the decision of the New Mexico Supreme Court, the work of this division was critical to presenting the position of a majority of the states. During the past year, a non-exhaustive listing of activities includes: 222 opinions issued by the New Mexico Supreme Court and the New Mexico Court of Appeals involving the criminal appeals division; 237 pleadings filed (answer briefs, briefs in chief and petitions for writ of certiorari); 141 memoranda in opposition, reply briefs, responses to certiorari petitions, responses to interlocutory appeal applications, and miscellaneous merit filings; and 26 oral arguments in the New Mexico Court of Appeals, New Mexico Supreme Court, Tenth Circuit Court of Appeals, and United States Supreme Court.
FY13 BUDGET REQUEST
P625 Legal Services $15,676,100 $10,672,200 General Fund $5,003,900 Consumer Protection Fund Balance 158 Perm FTE and 1 Term FTE are appropriated to the Legal Services Program. Budget request includes a 3% vacancy rate applied to Personal Services and Employee Benefits, equivalent to 5 vacant positions.
P626 Medicaid Fraud $1,972,800 $485,100 General Fund (25% State Share of Expenditures) $1,455,300 Federal Revenues (75% Federal Share of Expenditures) $32,400 Program Income for Revenue Collected on Behalf of the US Department of Health and Human Services. 21 Perm FTE are appropriated to the Medicaid Fraud Program Budget request includes a 5% vacancy rate applied to Personal Services and Employee Benefits, equivalent to 1 vacant position.
Total AGO Budget Request $17,648,900 $11,157,300 General Fund $1,455,300 Federal Revenue $5,003,900 Consumer Protection Fund Balance $32,400 Medicaid Fraud Program Income
ADDITIONAL FY12 BUDGET ADJUSTMENT AUTHORITY
Language The legal services program of the attorney general may request budget increases up to five hundred thousand dollars ($500,000) from other state funds to provide funding for the joint powers agreement with the Second Judicial District Attorney’s Office for expenses relating to the prosecutions of Rebecca Vigil-Giron, Armando Gutierrez, Elizabeth Kupfer, and Joseph Carl Kupfer. Justification The AGO signed a Joint Powers Agreement with the Second Judicial District Attorney's Office to hire a contract special prosecutor, with the AGO paying the costs.
FY13 BUDGET ADJUSTMENT AUTHORITY
Language The legal services program of the attorney general may request budget increases up to five hundred thousand dollars ($500,000) from other state funds to provide funding for the joint powers agreement with the Second Judicial District Attorney’s Office, for expenses relating to the prosecutions of Rebecca Vigil-Giron, Armando Gutierrez, Elizabeth Kupfer, and Joseph Carl Kupfer. Justification The AGO signed a Joint Powers Agreement with the Second Judicial District Attorney's Office to hire a contract special prosecutor, with the AGO paying the costs.
FY13 SPECIAL APPROPRIATION
Language One million five hundred thousand ($1,500,000) is appropriated from the general fund to the Attorney General’s Office to support interstate water conflicts for ongoing litigation involving the Rio Grande, and expected litigation arising on New Mexico’s other interstate rivers, including the Colorado River and its tributaries. Justification The State of NM through the Attorney General is involved in litigation against the US Bureau of Reclamation regarding the operation of the Rio Grande Project (Elephant Butte Reservoir, Caballo Reservoir, EIBD and EP#1). The state brought suit against the United States because it has abandoned the way it operated the project for the past century and has illegally changed the method of allocation of water to farmers in New Mexico and Texas. Water to which New Mexico farmers are entitled is illegally being denied to New Mexico farmers and delivered to farmers in Texas. This water litigation requires the AGO to use consulting services and additional outside resources for expert research, testimony and legal services as well as incurring substantial and necessary litigation-related expenses. In addition to this litigation on the Rio Grande, the Attorney General must be able to address ongoing legal threats involving other states on the Colorado River and its tributaries. Our present base budget does not account for these anticipated costs and our commitments to zealously represent NM in water litigation.
ADDITIONAL FUNDING FROM GRANTS AND AWARDS
The NM Attorney General has 8 active multi-year grants and awards. Funding totals $6,199,782 and 22 full-time employees (FTE) are authorized. Grants are not included in the budget request and are budgeted through budget adjustment requests. ARRA o o o Border Violence Initiative Award: $678,880 FTE: 4 Purpose: To develop a proactive law enforcement investigative capability for human trafficking and to continue and increase services for extradition and/or foreign prosecution of wanted persons committing state offenses located in foreign countries. Grant Period: 8/1/09 through 1/31/12
New Mexico Human Trafficking Task Force o Award: $215,000 o FTE: 1 o Purpose: To fund a special agent position to investigate human trafficking cases, provide expertise, technical support, and coordinate investigations with collaborative partners. o Grant Period: 10/1/10 through 9/30/12 Anti-Money Laundering o Award: $3,605,920 o FTE: 12 o Purpose: To hire law enforcement personnel in order to enhance and better coordinate investigations and prosecutions of money laundering as well as crimes related to the trafficking of narcotics, weapons and human beings along the border. o create a special agent position to investigate human trafficking cases o Grant Period: 9/1/10 through 8/31/13 o Source of Funds: Settlement Agreement between the Arizona Attorney General’s Office and Western Union as part of a money laundering lawsuit.
Internet Crimes Against Children o Award: $738,982 o FTE: 1 o Purpose: To investigate and prosecute internet crimes against children and to provide specialized training for law enforcement personnel throughout the state. o Grant Period: 7/1/09 through 3/31/12
Health Care Reform Grant o Amount: $125,000 o FTE: 1 o Purpose: To develop a service delivery model that provides a comprehensive array of services to support the academic, social and health needs of pregnant and parenting teens and their children. o Grant Period: 9/1/11 through 8/31/12
Methamphetamine Initiative o Award: $500,000 o FTE: 1 o Purpose: To provide outreach and education in order to protect children and prevent the uses of methamphetamine. o Grant Period: 3/11/09 through 3/10/12
Environmental Crimes Unit Outreach and Training Program o Award: $220,000 o FTE: 1 o Purpose: To create a special agent position to investigate environmental crimes. o Grant Period: 10/1/10 through 9/30/12 Traffic Safety o Award: $116,000 o FTE: 1 o Purpose: To fund a traffic safety resource prosecutor who specializes in DWI and other traffic safety related issues. o Grant Period: 10/28/11 through 9/30/12