Ex-N.M. Deputy Insurance Superintendent on Trial for Fraud

January 22, 2008

The fraud and corruption trial of former state Deputy Insurance Superintendent Joe Ruiz, who is accused of trying to coerce an insurance company to donate money to his favorite charity rather than pay state fines, will resume this week.

Attorney William Madison, a witness for prosecutors that represent Ohio Casualty, said Ruiz and his boss, Insurance Superintendent Eric Serna, both seemed to be actively involved in the “shakedown.”

“I felt dirty,” Madison said. “I felt like somebody was asking for a bribe.”

Serna has not been charged with a crime in the FBI investigation that led to the charges against Ruiz.

Madison testified last Friday that Ohio Casualty faced $400,000 in fines in 2003 for neglecting to renew $30-a-year licenses to sell insurance in New Mexico.

He told a federal jury that Ruiz offered a 90 percent discount in the fines over the phone, but asked that Madison come to his office at the Public Regulation Commission in Santa Fe to discuss the matter.

Once at the office, Madison said he first met with Serna who told him that the fines could be waived altogether “if the insurance companies act like good corporate citizens and make a contribution to a legitimate 501(c)3,” which is a nonprofit organization.

Madison said he then met with Ruiz, who told him the fine would be dismissed if Ohio Casualty would donate $30,000 to the Con Alma Foundation and $5,000 to the Southwestern Arts Institutes.

Madison said he told Ruiz he would have to check with Ohio Casualty’s senior management before going any further.

After consulting with Ohio Casualty managers, Madison said he telephoned Ruiz and told him the company was willing to pay a $25,000 fine, but only if it was part of an on-the-record court settlement.

“There was dead silence on the line for about 10 seconds,” Madison said.

Madison said it was clear that when he refused Ruiz’s offer, “he didn’t feel very secure.”

The trial was expected to continue through the middle of next week.

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