Carlsbad Woman Arraigned on Federal Wire Fraud Charges Arising Out of $800,000 Embezzlement Scheme
75-Count Indictment Charges Former Office Manager of Otis Mutual Domestic Water Consumers and Sewage Works Association with Perpetrating Scheme to Defraud
ALBUQUERQUE – Acting U.S. Attorney James D. Tierney, Special Agent in Charge Terry Wade of the Albuquerque Division of the FBI, and Eddy County Sheriff Mark Cage announced the arraignment of Lori V. Whitaker, 54, of Carlsbad, N.M., on wire fraud charges at the federal courthouse in Las Cruces, N.M.
Whitaker was arraigned this morning on a 75-count indictment charging her with perpetrating a scheme to defraud her former employer, the Otis Mutual Domestic Water Consumers and Sewage Works Association (Association), out of approximately $800,000.00 over a two-year period. The indictment charges Whitaker with 75 counts of wire fraud alleging that she fraudulently transmitted funds by means of wire communications between March 27, 2015 and Feb. 3, 2017, as part of a scheme to defraud the Association. The funds involved in the 75 transactions charged range from $416.00 to $15,746.64. During today’s arraignment hearing, Whitaker entered a not guilty plea and was released pending trial, which has not been scheduled, under pretrial supervision and other conditions of release.
“This indictment reflects the Justice Department’s commitment to investigate and prosecute fraudulent conduct that adversely impacts the lives of innocent victims,” said Acting U.S. Attorney Tierney.
“The scope of these charges shows the determination of the FBI to work with our partners to make sure justice is done,” said FBI Special Agent in Charge Wade. “I am proud of the FBI agents and staff who worked with the U.S. Attorney’s Office and Eddy County Sheriff’s Office on this case.”
Eddy County Sheriff Cage said, “This indictment brings us another step closer to bringing closure to the people who rely on the Otis water co-op for potable water and irrigation. The Eddy County Sheriff’s Office is grateful to the FBI for partnering with us and applying their resources and expertise to this complex case, and we look forward to continuing to work with the FBI and the U.S. Attorney’s Office as the prosecution moves forward.”
According to the indictment, Whitaker was employed by the Association, a non-profit special purpose government association that provided potable water and a wastewater system to more than 4300 people in Otis, N.M., in Eddy County, as its office manager from 2003 through April 2017. The indictment alleges that, as the Association’s office manager, Whitaker was responsible for controlling the Association’s finances, had access to the Association’s payroll account, and received a company credit card intended for use for Association-related expenses.
The indictment alleges that from March 2015 through Feb. 2017, Whitaker perpetrated a scheme to defraud the Association through which she embezzled approximately $800,000.00 of the Association’s funds for her personal use. According to the indictment, Whitaker executed the scheme to defraud in two ways. First, Whitaker allegedly defrauded the Association by using its credit card account for personal purposes unrelated to the Association’s business. To this end, the indictment alleges that Whitaker repeatedly used the credit card to obtain cash advances and initiate other charges at casinos, which she allegedly was not authorized to do. Second, Whitaker allegedly defrauded the Association by paying off credit card balances through frequent, but unauthorized, online transfers from the Association’s payroll account.
The indictment includes forfeiture provisions, which seek forfeiture to the United States of any property or proceeds derived from the crimes charged in the indictment. It also seeks the entry of a money judgment against Whitaker in the amount of $800,000.00.
If convicted, Whitaker faces a maximum statutory penalty of 20 years of imprisonment. Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt in a court of law.
This case was investigated by the FBI office in Las Cruces with assistance from the Eddy County Sheriff’s Office. Assistant U.S. Attorneys John A. Balla and Richard C. Williams are prosecuting the case.