Gallup gang charged with pilfering $400,000

Copyright © 2008
Gallup Independent
By Phil Stake
Staff writer

GALLUP — Eight area residents were charged Thursday in connection with a racketeering scheme that pilfered $400,000 from McKinley County’s Medicaid program between 2001 and 2004. Among the individuals charged, one is a former case worker for New Mexico Human Services and six are Medicaid clients.

“This case could eventually see the prosecution of more than a dozen people including clients, private citizens and previous employees ... ,” District Attorney Karl Gillson said in a news release.

Carla Noftzger, 43, formerly a McKinley County case worker for New Mexico Human services, is the so-called “ringleader” of the operation. Until 2004 when she resigned pending an internal investigation of her accounting, Noftzger controlled moneys available through the state’s Medicaid Travel Program, which provides travel expenses to children and parents who must leave their community in order to receive effective medical care. In such cases, the Medicaid Travel Program helps pay for travel, lodging and meals — usually these benefits are provided to children in rural areas, according to Betina Gonzales McCracken, communications director for the New Mexico Human Services Department.

After the investigation started, Noftzger moved to Edmond, Okla.

Her apparent co-conspirator was Ruben Martinez, 37, of Gallup, Noftzger’s boyfriend, according to the District Attorney’s office. Both Martinez and Noftzger are charged with one count each of racketeering, which is a second-degree felony; 17 counts each of fraud; and six counts each of conspiracy to commit fraud.

Gillson said he intends to prove that Noftzger and Martinez sapped Medicaid funds by writing checks to clients, usually for amounts around $900, then telling the clients to cash the checks at a local bank. The clients were then instructed to return 70 percent of the cash and keep the rest. This occurred many times between 2001 and 2004.

But enough time passed between commission of the crime, and commencement of the investigation, that the earliest fraud counts will not be prosecuted due to the state’s statute of limitations, Gillson said Friday.

About the clients who aided in the racket, Gillson said:

“These were folks who could use extra income. They had little or no criminal background.”

He said that the lack of prior criminal background is part of the reason that nobody has yet been arrested.

“In my opinion, there is no threat of them fleeing the jurisdiction ... of them not showing up for the arraignment ... if they flee, we’ll have them arrested.”

In four years time, Noftzger, Martinez and a so-far unknown number — at least eight — accomplices allegedly stole $400,000 from the MTP, which is roughly the same amount provided to the entire state’s MTP during each of the past four years.

Each person charged Thursday will be arraigned within the next 30 days, but the exact date of arraignment has not yet been set.