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New Mexico State Auditor Investigates Prison Contracts

On November 12, 2010, New Mexico State Auditor Hector Balderas revealed that his office was investigating whether a former state prison employee violated rules when awarding construction and maintenance contracts to three vendors between 2007 and 2010. Balderas said New Mexico Department of Corrections (DOC) Secretary Joe Williams contacted him after questionable contracts and transactions were discovered, and asked him to fully investigate the situation.

“We think there was about $10 million worth of business done during this high risk period,” said Balderas. “What we’re concerned with right now is bid rigging, possible collusion from a former state employee and potential extensive billing. The competitive bidding process might have been bypassed or manipulated.”

According to Balderas, the contracts involved work on roofs, water systems and perhaps security cameras as well as basic maintenance in and around state prisons.Williams said at least one former DOC employee may have violated the rules in regard to contracts involving three companies. “We want an objective evaluation of the matter, which is why we contacted the state auditor,” he said.

As it turned out, Williams was right. The audit results, released in June 2011, implicated former DOC facility manager Lauri Chapman in a bribery scandal involving contractor Omni Development Corporation. Omni received over $4 million in DOC contracts from February 2007 to April 2009, when Chapman was accepting bribes from the company.
Omni was the sole provider for the DOC’s roofing services under an arrangement instituted by Chapman that allowed her to award contracts without competitive bidding. In return, Chapman accepted dozens of cash, check, online and credit card payments from Omni.

The State Auditor’s office found irregularities in the contracts overseen by Chapman, including $3.7 million in questionable costs claimed by Omni and two other companies, Advantage Asphalt and HEI, Inc. Chapman also provided a confidential state email to Omni regarding questions about the firm’s work.

“During this fiscal crisis, I am appalled that New Mexico’s taxpayers were victimized and that adequate protections did not exist to prevent these abuses from occurring,” Balderas stated.

The FBI was made aware of the audit findings, which led to a criminal prosecution. In July 2011, Chapman pleaded guilty to 30 federal charges related to the bribery scheme; she agreed to forfeit $237,080 and faces up to 10 years in prison when she is sentenced in October. See: United States v. Chapman, U.S.D.C. (D. NM), Case No. 1:11-cr-00904-JB.

Meanwhile, Omni continues to contract with the DOC, though the company’s owner, Anthony Moya, who helped the FBI collar Chapman, received an 18-month prison sentence in an unrelated embezzlement case. He was released after 9 months due to his cooperation in the DOC bribery investigation.

Sources: www.krqe.com, Albuquerque Journal, www.newmexicowatchdog.org

Related legal case

United States v. Chapman


 

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