Plea reached over fake audit

By Barry Massey
The Associated Press

SANTA FE — The former controller of the New Mexico Finance Authority is expected to plead guilty Thursday to charges of forgery and securities fraud for faking the agency’s financial audit that was distributed to bond investors earlier this year, a state official confirmed to The Associated Press.

Under an agreement reached with prosecutors, ex-controller Greg Campbell is to plead to two counts of forgery and one count of securities fraud, said Bernice Geiger, a spokesman for the state Regulation and Licensing Department, which includes securities regulators.

Campbell faces up to six years in prison for the felonies, but a judge will determine his sentence.

He was scheduled to appear in state district court Thursday afternoon on the plea agreement, which becomes final only after his pleas are accepted by District Judge Stephen Pfeffer.

Cambell’s lawyer did not immediately return a telephone call to his office Thursday about the plea agreement.

Campbell had served as controller from 2007 until he left in June. In that position, he was in charge of the authority’s accounting operations.

The authority provides low-cost financing for capital improvements by cities, counties, schools and other New Mexico governments.

The fake audit scandal has prompted a management shake-up of the authority and calls by legislators for stronger oversight. The authority operates independently from any state agency and functions like a bank for governmental infrastructure.

Campbell was indicated in September on four counts of forgery and eight counts of securities fraud.

Under the agreement with prosecutors, Campbell is to plead guilty to forgery for falsifying the agency’s financial statements to make it appear they had been audited by an outside accounting firm and distributing the forged document to a lawyer handling the authority’s bond package. The securities fraud charge is for misrepresenting the authority audit and financial statements to an investment firm that purchased the agency’s bonds in March.

Campbell’s motives remain unclear, and there’s been no evidence released by investigators to indicate any money is missing.