Former N.M. insurance regulator pleads not guilty

September 24, 2007

Former New Mexico insurance regulator Joe Ruiz pleaded not guilty to federal corruption charges that arose from allegations he misused his office by soliciting payments from insurance companies in exchange for reducing regulatory fines.

Ruiz declined comment after the federal court hearing except to say he felt “lousy” because he’d had a heart attack and had been released from the hospital to attend his arraignment before U.S. Magistrate Robert Scott.

A federal grand jury indicted Ruiz, a former deputy superintendent of insurance, on 31 counts of extortion, mail fraud, wire fraud and corrupt solicitation. A conviction on most of the felony charges carries up 20 years in prison.

Ruiz said he had not seen the indictment until about two minutes before the arraignment.

Attorney Tim Padilla told the judge that Ruiz understood the charges and that he and his client had discussed the potential penalties. Ruiz was released on his own recognizance. Scott restricted his travel to within the state.

The state Public Regulation Commission fired Ruiz last year after allegations that he had solicited charitable donations from insurance companies. He was deputy insurance superintendent from June 25, 2001 through July 31, 2006.

According to the indictment, Ruiz asked companies for donations to organizations or individuals “in exchange for recommending a reduced fine, or no fine, to the superintendent of insurance.” Padilla said he did not believe Ruiz received any benefit from his alleged actions.

Ruiz was recruited for the deputy insurance superintendent’s job by then-superintendent Eric Serna.

Serna retired last year in an agreement with the PRC after the agency suspended him over conflict-of-interest issues, including some involving donations to a nonprofit health foundation, Con Alma, for which Ruiz solicited payments from insurance companies.

Most of the time, Ruiz directed that insurance companies make payments to Con Alma, founded by Serna, or to the Southwestern Arts Institute, which bought bilingual books for children, mostly written by Ruiz with the stories in Spanish and English. The indictment said the institute consisted of one individual, who was not identified.

The indictment also said Ruiz intervened in an insurance claim involving a state senator in July 2002, allegedly pressuring for a settlement by telling the company he would not take regulatory actions, including fines, if it agreed to a $10,000 payment on the claim. The claim stemmed from an automobile accident involving the lawmaker, who was not identified in the indictment. The company paid a $10,000 settlement and it was not fined.

The indictment also said Ruiz would tell insurance companies they faced large fines for not being properly licensed or registered in New Mexico or for having employees or adjusters handling claims in New Mexico who weren’t licensed in the state.

Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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