Former New Mexico Insurance Regulator Indicted

August 27, 2007

Former New Mexico state insurance regulator Joe Ruiz has been indicted on federal corruption charges for allegedly misusing his office by soliciting payments from insurance companies in exchange for reducing regulatory fines.

A federal grand jury on Friday indicted Joe Ruiz, a former deputy superintendent of insurance, on 31 counts of extortion, mail fraud, wire fraud and corrupt solicitation. A conviction on most of the felony charges carries a penalty of up 20 years in prison.

Ruiz is scheduled to make his first appearance in federal court in Albuquerque on Monday. Telephone messages seeking comment were left at his home in Santa Fe.

The Public Regulation Commission fired Ruiz last year after allegations surfaced that he had solicited charitable donations from insurance companies. He worked as deputy insurance superintendent from June 25, 2001 through July 31, 2006.

According to the indictment, Ruiz asked companies for donations to organizations or individuals “in exchange for recommending a reduced fine, or no fine, to the superintendent of insurance.”

Eric Serna served as insurance superintendent and recruited Ruiz for the deputy position. Serna retired last year in an agreement with the PRC after the agency had suspended him over conflict-of-interest issues, including some involving donations to a nonprofit health foundation, Con Alma, for which Ruiz solicited payments from insurance companies.

Most of the time, Ruiz directed that insurance companies make payments to Con Alma, which was founded by Serna, or to the Southwestern Arts Institute, which the indictment said consisted of just one individual. The person was not named in the indictment, however. The institute bought bilingual books for children, mostly books written by Ruiz with the stories in Spanish and English.

The indictment also said Ruiz intervened in an insurance claim involving a state senator in July 2002. He allegedly brought pressure for a settlement by telling the company he would not take regulatory actions, including fines, if it agreed to make a $10,000 payment on the claim. It stemmed from an automobile accident involving the lawmaker, who was not identified in the indictment. The company paid a $10,000 settlement and it was not fined.

During one telephone call, a company representative “expressed concern about the politicization of this case,” the indictment said. “Ruiz’s response to this concern was to tell the Progressive representative that it looked like he was understanding how politics works in New Mexico. Ruiz then further advised the Progressive representative that the senator was a powerful man.”

According to the indictment, Ruiz would tell insurance companies that they faced large fines for not being properly licensed or registered in New Mexico or having employees or adjusters handling claims in New Mexico who weren’t licensed in the state.

“As a part of his scheme to defraud, Ruiz would fraudulently represent to companies from which he requested payments that it was permissible for the companies to make payments to the persons or organizations Ruiz named instead of paying a fine to the state of New Mexico,” the indictment said.

Acting U.S. Attorney Larry Gomez said in a statement that Attorney General Gary King’s office helped investigate the allegations against Ruiz.

Ruiz has been active in political circles for years and held numerous government jobs, the Albuquerque Journal reported in a copyright story published Saturday. After retiring from Southern Union Gas in 1988, Ruiz said in a deposition that he worked in the office of then-Congressman Bill Richardson for several years and was then recruited by the office of Sen. Jeff Bingaman, D-N.M.

In the early 1990s, then-Gov. Bruce King appointed him as a division director at the Economic Development and Tourism Department.

The federal prosecution is the latest in a series of corruption cases involving state officials.

Last year, former state Treasurer Robert Vigil was convicted of attempted extortion involving investment operations in the office. His predecessor, Michael Montoya, pleaded guilty to extortion in a kickback scheme in which he demanded payments from investment advisers.

Recently, federal prosecutors have brought fraud and other charges against a former Senate leader, Manny Aragon, and several other individuals for allegedly bilking the state out of $4.2 million by inflating construction costs in a courthouse project in Albuquerque.

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