NMFA holding emergency meeting Thursday in wake of arrests
Posted at: 08/09/2012 10:50 AM
| Updated at: 08/09/2012 3:19 PM
By: The Associated Press and KOB.com Staff
The New Mexico Finance Authority will hold an emergency meeting Thursday to discuss the aftermath of a scandal that could cost New Mexicans millions.
KOB will be at the meeting and will bring you any developments.
The emergency meeting comes one day after the arrests of current NMFA COO John Duff and former New Mexico Finance Authority controller Gregory Campbell in connection with an allegedly forged audit.
Campbell has been charged with eight counts of securities fraud, four counts of forgery and one count each of racketeering and conspiracy to commit racketeering in connection with the fake audit.
Duff, who was Campbell's immediate supervisor, also has been charged with allegedly conspiring to engage in a pattern of racketeering activity by fraudulently misrepresenting the financial statements of the NMFA to ratings agencies, investors, bond buyers, and the State of New Mexico, according to the criminal complaint. The state's top securities regulator says it has no reason to believe the New Mexico Finance Authority is in fiscal trouble at this point.
The Securities Division of New Mexico's Regulation and Licensing Department declined to speculate Wednesday on the motives of COO John Duff and former controller Greg Campbell.
Among the charges in the criminal complaint is that the two men agreed to an accounting change that made the authority's revenue appear greater than what it actually was in 2011.
The criminal complaint also alleges that Campbell, with the explicit knowledge and permission of Duff, misrepresented approximately $40 million in the financial statements for NMFA for 2010 and 2011.
Instead of reporting a loss of $40 million in revenues, they are accused of concealing that loss by fraudulently reporting it under grant expenses.
The $40 million is believed to have been given over to the state to help cover budget shortfalls.
The finance authority's governing board members say it's uncertain whether any money is missing until a forensic audit of the agency is completed.
State Regulation and Licensing Department Superintendent J. Dee Dennis Jr. says the actions of the two have "risked the credit rating of New Mexico."
Stay with KOB as we continue to cover this story.