Ledes from the Land of Enchantment

Jury finds ex-UNM athletic director not guilty of two embezzlement charges

Relief washed over Paul Krebs as he lifted his head when District Court Judge Cindy Leos read the jury verdict saying he is not guilty of two counts of felony embezzlement.

Jurors came back with the verdict around 10:30 a.m. Friday, the fifth day in the trial brought by prosecutors from the New Mexico Attorney General’s Office against Krebs, the former athletic director at the University of New Mexico.

The original indictment included seven counts of alleged misuse of public money, but those counts were dropped by prosecutors weeks before the trial because there was not enough evidence to proceed with those charges.

Turns out there was also not enough evidence presented to the jury that Krebs embezzled money from the university to cover losses from a 2015 Scotland golf trip organized to raise high-dollar donations for Lobo sports.

“Tremendous amount of relief,” Krebs said, describing his feelings outside the courtroom after the verdict. “I had faith that the jury would see the truth and that justice would prevail.”

Defense attorney Paul Kennedy stood affirmed with the position he took in his opening arguments on Monday when he said prosecutors would not present evidence to show Krebs took public money from the university for his own gain.

“He testified he didn’t take any money, and the auditor testified there was no embezzlement, it’s hard to know what we were here for,” Kennedy said after the trial.

Current and former top administrators at UNM — including the director of internal audits, a former president and a vice president that was one of the few people above Krebs — all testified there were red flags for how money was moved from university budgets to pay for the golf trip.

The internal auditor even reported Krebs to the state auditor’s office for potential violations of the anti-donation clause in the New Mexico Constitution.

But breaking policy is not breaking the law, and the jury agreed.

“As soon as they start talking about (policy), you know they don’t have any evidence. They don’t want to talk about the law, they want to talk about policy,” Kennedy said. “That’s where they retreat to when they don’t have any evidence.”

Prosecutors did show evidence that Krebs directed employees underneath him to use more than $24,500 to pay for part of the Scotland trip for three people he wanted to court for a big money donation to athletics.

More evidence also showed Krebs moved money from a “contingency fund” to cover more than $13,000 in losses related to the trip. His lawyers argued that money, part of a taxpayer allocation to the athletic department, could be used at his discretion and in no way was ever taken from the university for Krebs personal gain.

The jury agreed.

“There are reasons for this prosecution beyond the actual facts of the case,” Kennedy said, but refused to elaborate. “Unfortunately you are in a high-profile position in a governmental agency, you come under a lot of scrutiny and sometimes not fairly.”

New Mexico Attorney General Raúl Torrez expressed disappointment in the verdict and called on the state legislature to update criminal statutes to strengthen laws against public corruption. 

“We are prepared to work with the legislature to make sure that this kind of activity is clearly and unambiguously prohibited under the law and reassure taxpayers that public resources are not used for private purposes or the interests of a privileged few,” Torrez said in a statement issued after the verdict.

Afterwards, Krebs wiped tears from his face then hugged his wife Marjori and his brothers who sat behind him the entire trial.

“I can’t say I was surprised but I was relieved, because you just don’t know,” Marjori Krebs said. “But you do have to trust in the judicial system. Justice was served, Paul got his day in court and now he is exonerated.”

With his criminal charges now behind him Paul Krebs, 66, can head back into retirement. He worked in college athletics for 37 years in Oklahoma and Ohio before his career took a drastic turn in New Mexico with charges related to public corruption.

“I don’t wish this on anybody, it was a horrible experience.” Krebs said. “Anybody who has ever worked with me would tell you that my integrity is unquestioned and this was a very difficult situation.”

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