Forensic audit could shine light on Bobby Willis' case
FARMINGTON — A official for the San Juan County District Attorney's Office said the state agency responsible for investigating the financial crimes allegedly perpetrated at New Mexico Title Escrow Co. left local law enforcement in a lurch when it dropped its investigation last spring.
The Financial Institutions Division of the New Mexico Regulation and Licensing Department paid at least $331,111 in 2012 and 2013 to Albuquerque attorney Darryl Millet and accounting firm REDW to conduct a forensic audit at the company. A forensic audit is an analysis of a firm's financial information to use as evidence in court.
According to court records, the division directed the Albuquerque accounting firm to cease work in January 2013, and Millet was dismissed as the court-appointed attorney in June 2013.
Chief Deputy District Attorney Dustin O'Brien said no report was ever provided to his office, and, to date, no complete forensic audit has been conducted in the case. Farmington police Detective Sgt. Brandon Lane confirmed his department has not received a report from the division.
Christopher Moya, an industry manager for the Financial Institutions Division, did not respond to a request for comment. Millet also could not be reached for comment.
O'Brien said his office was told the audit was discontinued because additional funds were not available.
The lack of a report further complicates the already complex criminal case against Bobby Willis, a local businessman charged in August 2012 with multiple counts of racketeering, embezzlement and fraud in connection to the collapse in February 2012 of the New Mexico Title Co. and its sister escrow company.
"We could have hired two attorneys to work on it for a year, and they would probably be working more than full time, just to review everything and make sense of it," O'Brien said.
According to court records, Willis organized the escrow company through an entity registered as Golden Rule, LLC.
New Mexico Title Co. was controlled by J.J. Bond Investments and owned by Chadwin Cox, a Denver-area businessman, but its affairs were often commingled with its sister company, and the two businesses shared the same office, according to court records.
Escrow is an agreement entrusted to a third party that is delivered after certain conditions are met, often the closure of a property sale. Escrow is often used in real estate transactions to ensure the lender releases the home purchase funds at or about at the same time the deed is recorded to reflect new ownership.
According to a receiver report filed in district court in Santa Fe in February 2012, New Mexico Title Escrow Co. managed some 900 accounts, but Willis was only charged with crimes directly related to two accounts held by Michael Atchison and Damtech Holdings LLC.
Both prosecutions are supported, at least in part, by statements provided by the victims. Atchison told police he lost $5 million in precious gemstones and jewelry after investing in a phony plan to build a multi-billion dollar hospital in Kirtland. Douglas Damask, of Damtech Holdings LLC, told police the company lost $94,800 held in escrow for a real estate transaction involving C3 Limited Partnership.
O'Brien said his office hoped the state's forensic report would help flesh out what other crimes may be connected to the escrow business. Early reports from the state's forensic audit revealed "quite a few discrepancies" in accounts held by the two companies, according to the criminal complaint, but were never fully investigated.
"From the public's perspective, there were a lot of individuals that were hurt, or said to be hurt, by the escrow fund account being depleted," O'Brien said. "That is what we were looking for from what the receiver did, and we do not know because we don't have a final report from the receiver."
The state Attorney General's Office has taken over prosecution of Willis, partly because of the complexity of the case.
O'Brien said Assistant Attorney General Michael Sanchez may be able to pursue additional charges, because his office has the resources necessary to conduct its own investigation.
Phil Sisneros, director of communications for the office, said he could not speak to the specifics of the case.
Willis is currently being held at San Juan County Adult Detention Center. At an arraignment hearing in district court on Monday, his attorneys requested he be released under court-ordered supervision, citing his failing health. Judge William Birdsall ordered Willis be evaluated to determine whether his medical condition warrants release.
A pre-trial conference has been scheduled for Sept. 29, according to court records.