Witnesses testify Krebes ordered them to move money to cover losses from golf trip

This article was first published by Source NM.

Twelve people took the witness stand on Tuesday, giving jurors insight into the golf trip and the subsequent budget maneuvering to cover losses that led to embezzlement charges for former University of New Mexico athletic director Paul Krebs.

Jurors heard from people who went to Scotland with Krebs in 2015 as part of a fundraiser he hosted with the Lobo Club, the group responsible for taking donations for Lobo athletics, and people responsible for the business accounts that he used to cover his losses.

There wasn’t much surprise from the details of the trip that included world-class hospitality, fine dining and play on prestige golf courses for some of the university’s top donors. However, there were some clear red flags about how Krebs moved money from the athletic department’s budget into the Lobo Club, the women responsible for following the order from Kreb testified.

Because Krebs lost money on the deposit he made to set up the trip, he allegedly moved money from what was described as a “contingency” fund set up under the UNM athletics budget, to the Lobo Club, an entity that can only take private donations, not taxpayers dollars from any university budget, athletics included.

Krebs is facing one count of embezzlement over $25,000 and another count of embezzlement of more than $2,500 but under $25,000, each second degree felonies that could bring jail time and a hefty fine.

Yvonne Otts, UNM athletics department director of business operations, shared a bit of the process that she followed under Krebs direction, to move the money from one account to another.Prosecutors showed her an email from July 2015 where Krebs told Otts, “We need to reimburse the Lobo Club for $13,625 out of the contingency fund.”

“It was business as usual,” she told the jury.

Otts said athletics has more than 150 different accounts to cover costs for things such as student athlete expenses, utilities fees and events.

She said each year UNM athletics sets aside $100,000 for this contingency fund to cover “unanticipated expenses.”

Prosecutors asked her if this amount of money was unusually high. “If it happened it was not to this amount of money,” she said.

From there the jury heard from the next in line responsible for transferring the funds under Krebs direction: former Lobo Club financial coordinator Valerie Arbogast.

Arbogast worked in that position with the Lobo Club from July 2010 to April 2018 and said she was the sole person to make sure donations were accounted for and ensure financial books were within the Lobo Club budget.

While she did report directly to the club’s executive director, she said the athletic department did have a large influence on projects and fundraisers.

After Otts got the directive from Krebs, she then emailed Arbogast asking her to process the request to move the money from the athletic department to the Lobo Club. This was a red flag for Arbogast, she testified.

“I wondered why (Otts) didn’t do it,” she told the jury. “I thought it was strange she didn’t make the transfer.”

Prosecutors are trying to set up the argument that Krebs had intent to break university policy in his alleged embezzlement scheme.

They attempted to establish this further through testimony from Sidney Mason-Coon, a policy officer at the University of New Mexico.

However, before prosecutors could make their point, Kreb’s attorneys objected to her testimony. Judge Cindy Leos ordered the jury to leave the room to allow the attorney’s to make their arguments.

They argued that establishing Kreb’s intent to break the law by violating university policies, would muddle the opinion of the jury since it does not fit within their definition of embezzlement, meaning taking something for personal gain.

Judge Leos then sent the jury home and gave both sides until tomorrow morning to present arguments for whether or not Mason-Coon should remain on the witness stand.

The trial, expected to last through Friday, will resume Wednesday at 9 a.m. in the Second Judicial District Court in downtown Albuquerque.

Television cameras from local news stations will likely not be present tomorrow morning. Before court resumed after lunch, Judge Leos made the pool photographer from KOAT pack up his equipment, banning local TV news from filming the proceedings.

Leos said the photographer violated the rules of decorum by filming footage during breaks in the trial, and getting close up images of documents on the table where defense attorneys are sitting.

Only one video camera is typically allowed in courtrooms, so the three local TV stations set up a pool situation to record what is being filmed inside. Leos said KRQE and KOB also violated the rules by live streaming the proceedings on their websites without permission.

Leos allowed reporters from the television stations to remain in the courtroom, along with reporters from Source New Mexico, The Albuquerque Journal and The Santa Fe New Mexican. Still photography is also still permitted.

Shaun Griswold is a journalist in Albuquerque. He is a citizen of the Pueblo of Laguna, and his ancestry also includes Jemez and Zuni on the maternal side of his family. He grew up in Albuquerque and Gallup. He brings a decade of print and broadcast news experience. Shaun reports on issues important to Native Americans in urban and tribal communities throughout the state, including education and child welfare.

This article originally appeared on Las Cruces Sun-News: Witnesses testify Krebes ordered them to move money