Opening arguments begin in embezzlement trial against former UNM athletics director

First witness said he was directed by Paul Krebs to offer discounted golf trips that was eventually covered by tax-payer dollars

By: - July 18, 2023 4:01 am

Paul Krebs stands in the Second Judicial District courtroom on July 18, 2023, ahead of his trial for two embezzlement charges that allegedly occurred while he was the athletics director for the University of New Mexico. (Photo by Shaun Griswold / Source New Mexico)

In 2015, Kole McKamey traveled to Scotland for the golf trip of a lifetime with people who could drastically change the direction of athletics at the University of New Mexico with a very high-dollar donation.

This week, he’s on the witness stand in the Second Judicial District courtroom testifying in a case against the organizer of the event, Paul Krebs, the former athletic director at New Mexico’s largest university who now faces two counts of embezzlement.

Krebs sat with his two attorneys at the defense table dressed in a dark blazer, light pants and silver and cherry tie that is a slight hue away from the cherry he was typically fashioned with at Lobos games.

He is charged with one count of embezzlement over $25,000 and another count of embezzlement of more than $2,500 but under $25,000. Both are second degree felonies.

On Monday, Krebs faced potential jurors in the morning and then heard opening statements from a prosecutor with the New Mexico’s Attorney General’s Office, his attorney and testimony from McKamey. 

Dozens of supporters sat behind him, many dressed in pastel golf clothing from their morning rounds. A fitting fashion statement since golf is what landed Krebs in this legal trouble.

Prosecutors in August 2019 alleged Krebs used his position as athletic director to move thousands from that budget, funded by state taxpayers, to cover losses from the Scotland golf trip that was designed to be a fundraiser for the Lobo Club, the university’s arm that takes in private donations for Lobo athletics.

There isn’t much question about whether Krebs broke policy at the university, his attorneys are centering the argument to question if he broke the law.

“Let me start by saying Mr. Krebs is charged with embezzlement,” defense attorney Paul Kennedy said. “He is not charged with breaking the rules at UNM.”

This standard was already conceded by the attorney general’s office when it dropped five counts from the indictment that included tampering with evidence, criminal solicitation to commit tampering with evidence, tax fraud, unlawful interest in a public contract, larceny and an additional embezzlement charge.

On June 16, Judge Cindy Leos dismissed four of those charges because evidence was insufficient, “due to an error in the indictment.”

The attorney general’s office said in court filings Krebs may have violated policy and best financial practices at UNM with his conduct, but conceded it could not prove beyond a reasonable doubt that he committed a crime.

While that bogey from the attorney general’s office appears to be the premise for Kreb’s defense, the trip to Scotland and how Krebs pushed to make it happen despite clear lack of interest is the way the prosecutor  on Monday set it’s argument that Krebs broke the law.

“He indicated to his staff that to bring in more donors to the trip that their golf package would be paid for,” prosecutor Andrew Coffing said in his opening statement. “Three donors accepted the deal, the golf was paid for by the UNM Athletic Department fund. $24,500. This is strictly against the rules.”

To explain the golf trip play, prosecutor John Duran brought McKamey to the witness stand to discuss his role in the fundraiser that was intended to bring in money for Lobo sports that could be a “transformational gift, something that moves the needle,” McKamey said.

Krebs came up with the idea for the trip in 2014. He found a program that would give donors five plays at prestige golf courses in Scotland and lodging in exchange for an $8,000 donation to the Lobo Club. Any potential donors would need to cover their travel expenses.

He enticed donors with NFL Hall of Famer and UNM Lobo Brian Urlacher as a featured celebrity guest. McKamey, a former quarterback for the Lobos, had been recently hired by the UNM Foundation to solicit “major gifts” from people to donate at least $25,000 and his first major assignment was to get people to pay and join the golf trip.

Quickly, the fundraiser hit a bunker.

Urlacher backed out of the trip. One person who committed got sick and died. Other potential donors didn’t want to go on the European vacation because it fell on Father’s Day weekend.

Suddenly, McKamey needed to fill three spots in order to meet the requirements for the trip Krebs set up. And the athletic director came up with a plan to cover his losses, McKamey testified.

“He said basically, ‘offer them a discount. They gotta get themselves out there and we’ll take care of the rest,’” McKamey told the jury. “I filled the three spots after that.”

Prosecutors say this action is the reason for the first indictment. By covering the $8,000 plus taxes for three people to play five courses professional golfers usually play on, Krebs covered his responsibility to set up the trip, but then used university money from the athletic budget to pay back the more than $24,000.

Krebs’ lawyers argue that the money came from discretionary funds that are a part of the athletics budget that allow him to spend as he deemed fit. They said he moved the money after he returned from the trip, right before the end of the school’s fiscal year.

McKamey, just weeks into his new job with the UNM Foundation, an entity that fundraises for programs university wide, joined the golf trip with his father-in-law. 

He testified that his direct supervisor told him the trip was ill-advised and he shouldn’t go. However, he was encouraged by Krebs to join the Scotland trip. 

“It was incredible. It was flawless. Trip of a lifetime,” McKamey testified. “I knew I was happy to be a part of it.” In retrospect to a question he was asked by a prosecutor, he responded it was “not very good.”

Tuesday, defense attorneys for Krebs will have their opportunity to cross-examine McKamey and his statements.

“There was urgency, the trip was coming up soon, (Krebs) needed people, an amount to make even foursomes to play,” McKamey said before court adjourned. “I needed to get the job done.”

The three people McKamey brought in to finish his job and who benefited from Krebs direction’ to waive their fees  — Raleigh Gardenhire, Darin Davis and Paul Gibson — are on the witness list and could testify Tuesday.

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Shaun Griswold
Shaun Griswold

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.