By Daniel Libit
The New Mexico Attorney General charged former University of New Mexico Athletic Director Paul Krebs on Wednesday with five criminal counts, including fraud and money laundering, as part of scheme to “pursue his private interest” with a 2015 Lobo booster golf trip to Scotland.
In a complaint filed Wednesday in state district court, the Attorney General accused Krebs of orchestrating a series of deceptive and illegal moves as part of organizing the golfing junket in coordination with the UNM Lobo Club.
When the trip failed to attract a sufficient number of attendees to cover the downpayment to UNM’s travel agency, the complaint states, Krebs tried to structure payments with public monies in a way that would circumvent UNM’s oversight procedures.
Krebs is alleged to have done this by directing that the trip be paid with a university credit card, through a series of incremental transactions below $10,000.
Krebs resigned from UNM in June 2017, following a series of scandals and public embarrassments for the department that occurred on his watch. The most damaging among them was the revelation that public money had been misappropriated for the overseas golfing junket two summers before. The Scotland Scandal, as it has come to be called, started out as Krebs’ misguided attempt to woo high-dollar donors and ultimately unfurled into a Nixonian melodrama.
“We are focused on the misuse of public tax dollars that should go to higher education opportunities for our students,” Attorney General Hector Balderas said in a statement. “We are prepared to present this important case at trial.”
A spokesman for the AG declined to comment on whether the office planned to bring more charges related to Lobo athletics.
Krebs’ trouble began in May 2017, when KRQE reported that UNM had spent $39,382 for him, men’s basketball coach Craig Neal, and Lobo Club Executive Director Kole McKamey to attend the Scotland golfing junket. Krebs insisted that the monies were spent for a legitimate work-related trip, even though he brought his wife, son and in-laws along.
But the story became only more disconcerting from there.
A few weeks after KRQE’s initial report, UNM interim President Chaouki Abdallah informed the TV station Krebs had subsequently told him that university money had also gone to pay the travel expenses of three Lobo boosters, implicating possible violation of state law. At the same time, Abdallah revealed that an anonymous donor had made a $25,000 gift to the university, which was intended to cover the school funds that had been spent on the three boosters.
It wasn’t until this past October, however, that the public finally learned that the anonymous donor was Krebs. This revelation came in a search warrant application by the AG, which reported some of the extreme lengths that the former Lobo boss took to obfuscate his identity as the donor. Citing emails, the AG claimed that Krebs had instructed his wife Marjori, a UNM professor, to write an anonymous letter and hand-deliver it to UNM Foundation Vice President Larry Ryan, in an effort to create a fictitious back story.
On May 23, 2017, Krebs issued a public statement about the donation, saying, “While it is two years after the fact, it is a situation that has been corrected.” In the charging document, the AG accuses Ryan and UNM Foundation lawyer Pat Allen of providing misleading and contradictory statements about the Krebs donation, as part of its criminal investigation.
“Mr. Ryan did say that he knew who the donor of the $25,000 was; however, he could not disclose that information to anyone,” the complaint said. Allen eventually provided a copy of Krebs’ credit card transaction for the donation, but redacted the name.
Following the disclosure, Krebs’s attorney Gene Gallegos, a former UNM regent, still insisted that his client had nothing to hide.
“It is not illegal, unethical or improper for Paul Krebs to make a donation to the University of New Mexico Foundation,” Gallegos told the Albuquerque Journal at the time.
The AG’s Office takes a dramatically different view of Krebs’ secret $25,000 payment, for which he received a tax deduction.
“The ‘donation’ was made using his already long established contacts and done after hours in a non-traditional manner,” the complaint states. “This conduct was not done in the advancement of the public interest, rather was done to pursue private interests.”
Krebs is not the first ex-Lobo staffer to face criminal prosecution. In 1981, former UNM men’s basketball coach Norm Ellenberger was convicted by a New Mexico jury on 21 counts of fraud and forging academic transcripts, as part of the infamous “Lobogate” scandal. Assistant coach Manny Goldstein was likewise convicted while another assistant, John Whisenant, received an acquittal.
Roughly a decade later, former UNM Athletic Director John Koenig would plead guilty to fraud and criminal solicitation, stemming from a case in which he was accused of bilking the university out of $25,000 through falsified travel receipts. Koenig’s lieutenant, former Associate AD Mike Dill, also plead no contest to a single charge of conspiracy relating to the same case.
More recently, last April, former UNM men’s basketball operations director Cody Hopkins was charged by a Bernalillo County grand jury with embezzling over $64,000 from the school, through transactions and withdrawals on a university-issued credit card. Hopkins, who left UNM in late 2015, had initially been accused of stealing monies in a Mauy 2016 UNM internal audit investigation.
“We work very hard to be good stewards with our funds,” Krebs said at that time, “and while this is the work of one individual, we are strengthening our controls and internal systems to prevent this from happening in the future.”
In an interview with NMFishbowl.com two years ago, Hopkins argued that he had been made the fall guy for a UNM athletic department with bigger problems than him.
“I was told on multiple occasions that we needed to do whatever we could do to prevent an audit from happening, because nobody wanted that to happen,” said Hopkins, who is due to face his own trial in Albuquerque later this year.
As NMFishbowl.com previously reported, the AG has also been probing the univeristy’s handling of a sexual assault claim made by a former female student, Teriana Bagley, against ex-football player Nias Martin. Last month, Bagley filed a federal Title IX lawsuit against UNM.
The Krebs charges come at the culmination of an 18-month investigation by the AG’s Office into the financial shenanigans of Lobo athletics.
In a separate civil report also released Wednesday, the AG admonished UNM for the lack of financial controls and transparency in its athletic department.
“What is clear, is that the culture and environment at the management and oversight level of UNM during this time created a situation ripe for public employees to violate state laws and abuse public resources, without any ability to be tracked, identified or ultimately held responsible,” Assistant AG Dylan Lange wrote in the report.
Featured Image by David Becker / Getty