Former Governor of Santa Ana Pueblo Sentenced to 51 Months in Federal Prison for Conviction on Embezzlement and Tax Charges
Bruce Sanchez Convicted on Charges arising out of Scheme to Embezzle $3,575,000.00 from Indian Pueblo Federal Development Corporation
ALBUQUERQUE – A former Governor of Santa Ana Pueblo was sentenced late this afternoon in federal court in Albuquerque, N.M., for his conviction on charges arising out of a scheme to embezzle approximately $3,575,000.00 from the Indian Pueblo Federal Development Corporation (IPFDC), an Indian tribal organization formed by the 19 Pueblos of New Mexico for the purpose of developing land that once had been the site of the Albuquerque Indian School.
Bruce Sanchez, 61, was ordered to serve 51 months in federal prison to be followed by three years of supervised release. He also was ordered to pay, jointly with his co-defendant, restitution in the amount of $3,575,000.00 to the IPFDC. The court also ordered Sanchez to pay the IRS $655,276.00, the federal taxes owed on the money he embezzled from the IPFDC and failed to report to the IRS, as a special condition of his supervised release.
In announcing the sentence, U.S. Attorney Damon P. Martinez said, “The IPFDC was established to develop real estate for the benefit of the 19 Pueblos of New Mexico and their people. Bruce Sanchez was entrusted with spearheading that development but instead he lined his own pockets at the expense of the people he was duty-bound to serve.”
“This sentence confirms that those who take advantage of their position, community’s trust, and people, will be held responsible for their actions. This is a positive move forward and a new chapter for the 19 Pueblos of New Mexico. It is also the result of on-going efforts, and strong commitment, by law enforcement agencies and the U.S. Department of Justice,” stated David House, Special Agent in Charge for the Western Region Office of Inspector General Investigations, Department of the Interior.
“Sanchez wrongfully used his positon, as a public servant, to orchestrate an illegal scheme to embezzle $3.5 million dollars from the Indian Pueblo Federal Development Corporation. Sanchez’s scheme diverted much needed public funds for his own personal use then further violated the law by not reporting the funds on his income tax returns,” said Special Agent in Charge Ismael Nevarez, Jr., of IRS- Criminal Investigation. “IRS- Criminal Investigation will continue its collaborative efforts to investigate individuals that violate public trust by engaging in illicit financial fraud schemes.”
Sanchez and co-defendant Thomas Keesing, 62, of Pecos, N.M., were indicted in Oct. 2012, and charged with a conspiracy offense and ten substantive embezzlement offenses arising out of the scheme to steal funds belonging to the IPFDC. The 15-count indictment also charged Sanchez with three tax evasion counts alleging an aggregate federal tax loss of $655,276.00, and a misdemeanor count of willful failure to file a tax return. In Aug. 2013, Keesing was charged by information with three misdemeanor counts of failure to file tax returns and those tax charges were consolidated into the case. The information charged Keesing with failure to file federal tax returns for calendar years 2006, 2007 and 2008, even though he received gross income in the aggregate amount of $2,771,250.00 during those three years.
According to the indictment, between 2003 and 2009, Sanchez and Keesing conspired to embezzle approximately $3,575,000.00 from the IPFDC. During that time, Sanchez was the president and chief executive officer of the IPFDC. Keesing, a commercial real estate developer and the owner of New Mexico Real Estate, Inc. (NMREI), worked as a consultant for IPFDC in 2002 and 2003. Sanchez and Keesing engaged in a scheme to unlawfully profit from the development of the Albuquerque Indian School property by having Keesing submit false and fraudulently inflated invoices for payment from NMREI to the IPFDC. Sanchez approved the invoices even though the payments were vastly in excess of the value of any services provided by Keesing and NMREI. Keesing then shared the proceeds of the fraudulently obtained IPFDC payments with Sanchez. Between 2003 and 2008 and as a result of this illegal scheme, Keesing and NMREI received $3,775,000.00 in payments from the IPFDC, including $3,575,000.00 that was fraudulently obtained. During that same period, Sanchez and Tsachu, LLC, his solely-owned consulting company, received approximately $1,722,823.04 from Keesing and NMREI.
On Jan. 28, 2015, Sanchez entered a guilty plea to Counts 3 and 13 of the indictment charging him with embezzlement from an Indian tribal organization and tax evasion, respectively. Sanchez’s plea agreement detailed the embezzlement scheme through which Sanchez and Keesing defrauded the IPFDC of $3,575,000.00. Sanchez brought Keesing onto the IPFDC development team in 2002 and Keesing performed services for the IPFDC in 2002 and 2003. Thereafter, Sanchez and Keesing entered into a brokerage and development agreement that was never presented to the IPFDC board for approval, and used the agreement as the vehicle to perpetuate their embezzlement scheme. Between Jan. 2005 and Nov. 2008, Keesing and NMREI submitted more than 100 invoices for professional services purportedly provided in connection with the development of the Albuquerque Indian School site. Sanchez arranged for the IPFDC to pay the invoices, and in return, Sanchez and Tsachu, LLC, received more than 100 checks in the aggregate amount of $1,652,823.04 from Keesing and NMREI. Although this illegally obtained money was taxable income, Sanchez did not report the income to the IRS.
Keesing also entered a guilty plea on Jan. 28, 2015. He pled guilty to Count 3 of the indictment charging him with aiding and abetting embezzlement from an Indian tribal organization, and Count 1 of the misdemeanor information charging him with the willful failure to file an income tax return. Keesing’s plea agreement sets forth a detailed description of his role in the embezzlement scheme that defrauded the IPFDC of $3,575,000.00. According to his plea agreement, Keesing shared these illegally obtained proceeds with Sanchez with Sanchez taking $1,652,823.00, and Keesing retaining the balance. Keesing acknowledged that Sanchez provided nothing of value in return for this money and used Keesing as a conduit to receive IPFDC funds to which he was not entitled. Keesing participated in the scheme to obtain additional compensation for work he previously performed on behalf of the IPFDC and for which he felt he was not adequately compensated. Although the proceeds Keesing obtained from the IPFDC were taxable income, he failed to file federal tax returns reporting the income.
Keesing remain on conditions of release and under pretrial supervision pending his sentencing hearing, which is set for Dec. 16, 2015. Keesing faces a statutory maximum of five years in prison on the embezzlement count and up to one year in prison on the tax count. His plea agreement also requires that Keesing pay, jointly with Sanchez, full restitution to the IPFDC for the losses it sustained as a result of their criminal conduct.
The case was investigated by the IRS Criminal Investigation and the Department of the Interior’s OIG, and is being prosecuted by Assistant U.S. Attorney Jonathon M. Gerson.