Former Taos County Housing Authority Director Carmella Martínez and her husband, Paul Martínez, have pleaded guilty to charges related to an embezzlement scheme in which they admitted to stealing more than $786,000 over a nine-year period.

The couple was charged in December 2012 on 49 counts related to the scheme. A press release from U.S. Attorney Kenneth Gonzáles’ office says the couple pleaded guilty Wednesday morning (Aug.) to one count of conspiracy to commit theft from programs receiving federal funds.

Following Wednesday’s proceedings, the couple faces a maximum penalty of five years in federal prison and a $250,000 fine, according to the release.

Under the terms of the plea deal, the couple will be required to repay at least the amount they stole. The release said prosecutors plan to dismiss the remaining 48 counts. Sentencing hearings have not yet been scheduled.

According to the release, Carmella Martínez said Wednesday that she began issuing fraudulent housing checks for Section 8 housing assistance to various payees, including to her husband, starting in 2000. The release says that Martínez admitted that she and her husband conspired to steal federal funds beginning in 2003, and continued to do so until 2011.

News of the embezzlement investigation broke shortly after federal investigators served a search warrant on the housing authority offices in late 2011. Court documents related to the warrant say investigators received a tip from an unnamed employee at the housing authority.

Since allegations of embezzlement were first made, Taos County has acted to overhaul operations at the housing authority. An outside contractor was brought in for several months in 2012 to review the program. A report from the contractor found several deficiencies, including poor staff training and employees who claimed to be immune to discipline because of their political connections.

The county is now hoping to pass control of the housing authority to a regional board that would oversee housing for most of northern New Mexico.

When the county closed its Section 8 list in April 2012, there were more than 757 people listed as waiting for housing assistance.

  • J.R. Logan is a reporter for The Taos News.