Developers admit diverting cash from project loan

Updated: Saturday, 20 Aug 2011, 4:36 PM MDT

Published : Saturday, 20 Aug 2011, 4:36 PM MDT

http://www.kasa.com/dpps/news/crime/anasazi-fraud-draws-second-guilty-plea_3918751

ALBUQUERQUE (KRQE) - The developer of the stalled Anasazi Downtown building now looming over central Albuquerque has pleaded guilty to bank fraud.

Vincent Garcia admitted in federal court that he spent more than $360,000 intended for the commercial and residential high rise at Central Avenue and Sixth Street SW on other things including an investment in a casino.

Garcia faces 20 years in prison, and a $1 million fine. The bank he cheated later failed.

The Anasazi remains an unfinished eyesore owned by the feds and recently boarded up at the insistence of Mayor Richard J. Berry to keep transients and copper thieves out.

In December a partner of Garcia's, Derek Barnhill, 46, of Rio Rancho admitted he, too, engaged in bank fraud totaling $474,000 and money laundering of $366,000. He faces up to 20 years in prison, a fine up to $1 million and restitution as ordered by a federal judge.

According to prosecutors and Barnhill's plea agreement, Barnhill and Vincent Garcia jointly owned a development project called Lockhaven Estates, and separately Garcia was building the nine-story Anasazi Downtown.

A federal indictment alleges that in late 2006 and early 2007 Barnhill and Garcia concocted a scheme to submitted false construction invoices to the bank financing the Lockhaven project to pump cash into both the Anasazi project and the Garcia's construction company.

In the plea agreement Barnhill claims that a month later Garcia said he needed $360, 000 as a good-faith payment toward buying a casino. Barnhill said he then altered and resubmitted a previous Anasazi invoice to draw $365,000 from the project's construction loan for Garcia.

In Garcia's plea deal he admitted instructing Barnhill to draw down the construction loan from Columbian Bank & Trust Co.

In addition the indictments in the case, which also name Garcia's son David Garcia as a defendant, list construction drawdowns from the Copper Square Condominium project as allegedly being base on fraudulent invoices. Some of the money was diverting to building a home for David Garcia, the indictment charges.

The money-laundering charges relate to allegations money was moved through various accounts to conceal its fraudulent sources.

The younger Garcia has denied the accusations, pleaded not guilty and is awaiting trial.

Construction on the Anasazi project stopped late in 2008.

Like Vincent Garcia, Barnhill also faces a potential 20-year prison sentence and $1 million fine. Sentencing dates have not been set for either man.