A version of this was published in The Santa Fe New Mexican
Nov. 8, 2005
On the day that Secret Service agents raided the State Treasurer’s Office in 2003 to seize computers used in a counterfeiting operation, Leo Sandoval, then an administrator in the office, scrawled a hand-written confession, admitting not only to making fake money, but acting as the bag man for kickbacks to former Treasurer Michael Montoya.
“I gave $1,000 (in counterfeit) to Mr. Paul Silva, my girlfriend’s brother who told me he was going to Tucson, Ariz.,” Sandoval wrote in the confession dated Dec. 17, 2003. “I strongly advised him against using this money for anything. He told me he was going to use this as a prank against a drug dealer in Tucson.”
Silva had been arrested a few days earlier in Tucson on counterfeiting charges and had told the Secret Service that Sandoval had given him the fake money in repayment of a debt, according to a May 2004 report by the Secret Service to U.S. Attorney David Iglesias.
Federal law enforcement officials have said that the counterfeiting case was the spark that resulting in the September indictments of former treasurers Montoya and Robert Vigil on federal charges of extortion. Vigil, who was treasurer at the time of the indictments, resigned last month in the face of possible impeachment in the Legislature.
Iglesias has agreed not to prosecute Sandoval on counterfeiting charges or for his role in the alleged kickback scheme in exchange for Sandoval’s cooperation in the Vigil and Montoya cases.
Sandoval’s confession, the Secret Service report to Iglesias and other previously unreleased documents involving his role in the treasurer scandal emerged last week in a court filing by Vigil’s lawyer Sam Bregman.
Bregman is asking federal District Judge James Parker to throw out evidence seized in an FBI search at Vigil’s home. The lawyer claims that FBI Special Agent Drew McCandless committed perjury in his affidavit to secure the search warrant.
Part of Bregman’s motion deals with McCandless’ description of Sandoval’s counterfeiting case.
The affidavit says that Sandoval — identified only as a “cooperating witness” in the document — was under investigation for counterfeiting, but “the charges were dropped as the Xeroxed money contained sports hero pictures and was intended for Christmas gifts.”
In a Nov. 2 letter to Bregman from Iglesias and prosecutor Jonathan Gerson, argued that McCandless isn’t guilty of perjury because “The FBI determined that (Sandoval’s) purposes in duplicating the currency was to create holiday gifts using pictures of sports figures and others.”
However, as The New Mexican pointed out in a Sept. 20 article, a December 2003 Secret Service affidavit details how Sandoval passed counterfeit bills not only to Silva, but also to Phillip Arellanes, who was arrested in late November 2003 for allegedly passing counterfeited $100 bills.
Neither the Secret Service affidavit nor Sandoval’s confession mention anything about sports heroes or Christmas gifts.
Sandoval in his confession also admitted to counterfeiting government documents.
“I made a driver’s license for Mr. Silva also,” he wrote. He wrote that he made Arellanes a driver’s license, a social security card, a birth certificate and a voter registration card.”
In his written confession, Sandoval gave a brief description of his role as middle man in Montoya’s alleged kickback plan.
“When I started working for the Treasurer’s Office I was asked to pick up some contributions/donations from a broker in Los Angeles,” Sandoval wrote “I came to find out that these contributions/donations were reoccurring (and) they were kickback for purchases of flex repurchase agreements.”
Sandoval wrote that he made “several subsequent trips to Los Angeles” to meet with two other investment advisors, including a man he calls “Peter Simmons.”
McCandless’ affidavit for search warrant identifies a man named Peter Simons, who was an investment advisor to the state from October 1997 to November 1999, during Montoya’s tenure as treasurer. Simons, the affidavit says “is a cooperating witness who has been immunized from prosecution in this investigation. Simons delivered money to Sandoval approximately six times, “in ever increasing amounts” the affidavit says.
“Later on Kent Nelson was introduced to Mr. Montoya by Angelo Garcia,” Sandoval wrote. “Over the next two years all transactions went through them.”
Nelson is a San Diego investment advisor who became a “cooperating witness” against both Montoya and Vigil. Garcia, who was a fundraiser for Vigil, also became a witness for the state.
“After that, Kent Nelson sent money to Angelo, Angelo gave me Michael’s share (and) I gave it to Mr. Montoya,” Sandoval wrote.
“I kept a list of all those transactions that took place (and) there is a book with them also.”
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