Lori V. Whitaker, former office manager of the Otis Mutual Domestic Water Consumers and Sewage Works Association, was arraigned on 75 counts of wire fraud in federal court Friday.
Whitaker, 54, of Carlsbad, pleaded not guilty at the arraignment hearing and was released pending trial.
If convicted, Whitaker could face a maximum of 20 years in prison and would have to forfeit any property related to the violations in the case.
Whitaker is accused of embezzling more than $800,000 from the association between March 2015 and February 2017.
According to the indictment, Whitaker was issued a credit card through the association’s Capital One Bank account intended for business use.
However, the indictment documented 75 transactions from that credit card of charges between $400 and $3,000 to casinos and resorts in New Mexico and online payments between $1,200 and $15,000 to Capital One.
The online bank payments for that card were allegedly paid from the association’s payroll account, read a news release from the U.S. Department of Justice.
“This indictment brings us another step closer to bringing closure to the people who rely on the Otis water co-op for potable water and irrigation,” said Eddy County Sheirff Mark Cage in the news release. “The Eddy County Sheriff’s Office is grateful to the FBI for partnering with us and applying their resources and expertise to this complex case, and we look forward to continuing to work with the FBI and the U.S. Attorney’s Office as the prosecution moves forward.”
As the office manager, Whitaker controlled the association’s finances, read the indictment. The association opened a Spark Visa Signature account with Capital One and Whitaker received a card under that account, read the indictment.
Monthly bank statements were sent to the association’s post office box, which Whitaker allegedly had access to and was responsible for paying the bills.
According to the indictment, Whitaker was allegedly issued a Capital One cash advance limit of $5,000, but increased the “frequency and the magnitude” of the cash advance limit to $10,000 “to accommodate her increased activity.”
“Although the Association did not promulgate any formal policies or procedures governing use of the Association credit cards, the Capital One Account was only intended for use on expenses related to Association business,” the indictment reads. “The Board did not authorize Lori V. Whitaker to initiate cash advances on the Capital One Account for personal purposes.”
Whitaker worked as the office manager in the early 2000s until she resigned in 2017.
The investigation arose in 2017 after an annual audit by New Mexico State Auditor’s Office revealed about $850,000 stolen from the association and alleged wrongdoing by Whitaker.
Current manager Cutter Rogers, who is also Whitaker’s son, declined to comment on the indictment. The association’s attorney Tom Martin was not available for comment Friday afternoon.