Carlsbad Woman Pleads Guilty to Federal Wire Fraud Charge Arising Out of $800,000 Embezzlement Scheme
Plea Agreement Requires Former Office Manager of Otis Mutual Domestic Water Consumers and Sewage Works Association to Pay $816,630.36 in Restitution
ALBUQUERQUE – U.S. Attorney John C. Anderson, Special Agent in Charge Terry Wade of the FBI’s Albuquerque Division, and Eddy County Sheriff Mark Cage announced today that Lori V. Whitaker, 54, of Carlsbad, N.M., entered a guilty plea in federal court in Las Cruces, N.M., to a wire fraud charge. Under the terms of the plea agreement, Whitaker is required to pay $816,630.36 in restitution to her former employer, the victim of her crime. Whitaker also faces a statutory maximum penalty of 20 years of imprisonment at sentencing, which has yet to be scheduled.
Whitaker was indicted in Jan. 2018, and was charged 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 charged Whitaker with 75 counts of wire fraud and alleged 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 ranged from $416.00 to $15,746.64.
In announcing the guilty plea, U.S. Attorney Anderson said, “With today’s guilty plea, Ms. Whitaker begins the process of taking responsibility for violating the solemn trust that was placed in her to manage the affairs of the Association. This guilty plea reaffirms the Justice Department’s commitment to investigate and prosecute fraudulent conduct that adversely impacts the lives of innocent victims.” “A lot of hard-working people in Eddy County put their trust in this defendant, and she repaid that confidence by stealing a sum of money that would have been eye-popping in a large city, let alone rural southeastern New Mexico,” said Special Agent in Charge Wade of the FBI’s Albuquerque Division. “We hope this case sends a clear message that the FBI and our partners will thoroughly investigate and bring to justice those who seek to enrich themselves at the public's expense.”
Eddy County Sheriff Cage said, “Thank you to our federal partners who worked so hard to help us get some closure for the Eddy County citizens affected by this abuse of their trust and their funds.”
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. 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 charged 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 defrauded the Association by using its credit card account for personal purposes unrelated to the Association’s business. To this end, Whitaker repeatedly used the credit card to obtain cash advances and initiate other charges at casinos, which she was not authorized to do. Second, Whitaker defrauded the Association by paying off credit card balances through frequent, but unauthorized, online transfers from the Association’s payroll account.
During today’s change of plea hearing, Whitaker pled guilty to one count of wire fraud. In entering the guilty plea, Whitaker admitted that from around 2003 until April 2017, while working as the office manager for the Association, she initiated personal charges and cash advances totaling $792,829.09 on her Association credit card at casinos in New Mexico, causing the Association to sustain an aggregate loss of $816,630.36. Whitaker further admitted that she executed charges, cash advances, and payments by transmitting interstate wire communications that traveled to credit-card company servers in Virginia or Georgia.
The 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.