A day after his wife told a jury that she had conspired with her employer to receive $136,000 in tax-free bonuses between 2004 and 2009, Horacio Lomeli testified that he was unaware of the alleged scheme, or of any corresponding bump in their family income.
Lomeli, a 45-year-old patrol officer with the Arizona Department of Public Safety, is currently on trial at Santa Cruz County Superior Court on charges that from 2004 to 2009, he conspired with his wife and co-defendant Carmen Lomeli, 44, to steal more than $170,000 in cash and third-party checks from Sierra Seed, the Nogales-based company where she worked as a bookkeeper.
Carmen Lomeli testified last Thursday that the checks, which she issued in the names of company salesmen and deposited in her and her husband’s bank account, were actually off-the-books bonuses. On Friday, Horacio Lomeli said it was the first he knew of the purported scheme.
“The first time you heard about it was yesterday?” Assistant Attorney General Kim Ortiz asked him during cross-examination.
“Yes,” he answered after a pause.
“Yes?” Ortiz asked.
“I think so, yes,” he said.
The Attorney General’s Office doesn’t believe Carmen Lomeli’s bonus-in-disguise explanation. They say she stole the checks, and admitted to her former supervisor that she took another $37,000 in cash. She’s charged with six counts of theft and one count each of conspiracy, fraud, money laundering and mortgage fraud.
Prosecutors allege that Horacio Lomeli was in on it as well, and have charged him with the same crimes, with the exception of mortgage fraud.
But during his testimony Friday, Horacio said he was so divorced from the management of the family finances that he never even read their bank statements.
“Who controls the checking account and the finances of the family?” his lawyer Charles Thomas asked during direct examination.
“My wife,” he said.
“Did it start out that way? Did it become that way?” Thomas asked.
“It’s always been like that. It’s just, she’s good at numbers, she would take care of the payments… I guess that’s the way I was raised. You work, you get your check, sign it, give it to your wife, give it to your mom,” Horacio said.
On Thursday, Carmen Lomeli offered similar testimony.
“Carmen, who handled the finances in your home?” her lawyer George Damon asked.
“I did,” she said.
As to what that entailed, she said: “Everything, from keeping the checking account balance to making payments to doing the taxes. Every single transaction.”
During her cross-examination of Horacio Lomeli on Friday, Ortiz tried to demonstrate his active involvement in the bank account where the disputed checks were deposited. She showed projections of an array of checks he had written from the account for items ranging from groceries at Garrett’s, UniSource bills, Lourdes Catholic School and Domino’s pizza.
Horacio acknowledged that he wrote about four checks per month from the account.
Prosecutors have also shown the jury an Excel spreadsheet that Carmen allegedly used from 2004 to 2007 to track the joint account, and that included entries for the disputed checks from Sierra Seed. More than 600 transactions recorded on that spreadsheet were related to Horacio, which they argue also shows his active hand in the account.
Horacio did not dispute the transactions, but testified that he was unaware of the existence of the spreadsheet.
Ortiz also tried to depict the Lomelis as over-spenders, reminding Horacio that they had filed for bankruptcy in October 2002 and showing him court documents reporting that they owed a mortgage on a home in Rio Rico and payments on a 2002 Dodge Ram and 2002 GMC Yukon at the time (Horacio said the Yukon was a 2000).
In June 2004, several months prior to the first deposit of a third-party Sierra Seed check in the couple’s checking account, a federal judge issued a bankruptcy order.
“Is it a fair statement to say that as of 2004, there is no doubt that you and your wife were spending beyond your means?” Ortiz asked Horacio.
But he didn’t agree with her characterization, saying instead that it had been their “right” to file for bankruptcy.
By 2006, the Lomelis had paid off their bankruptcy and were in the process of buying a new home in the Meadow Hills neighborhood – a sale in which Horacio took the lead on the negotiations, he said, in part because the property owner was Turkish and had cultural hang-ups about dealing with women.
However, Carmen handled the mortgage application and did the calculations to determine whether they could afford the purchase, he said. (Horacio testified that the mortgage broker advised him not to attach his name to it because his poor credit score would be detrimental.)
“Did you ask your wife, is this too much house for us? Can we afford this?” Thomas asked during direct examination.
“Yes, we talked about it. I liked the property, I liked the house. But, I said, ‘Can we afford this?’ and she said ‘Yeah, we can, we can do it. If we do changes…” Horacio said, referring to changes such as taking their son out of private school.
The new home purchase saw the Lomelis’ monthly mortgage payments double to more than $3,000 per month, Ortiz noted during cross-examination.
“Would you agree with me, at that time, that just paying your mortgage pretty much wiped out your paycheck for the month?” she asked Horacio.
“Close, yes,” he said, adding: “I was making probably half of that just in overtime.”
On Thursday, Carmen alleged that Sierra Seed’s chief operations office, Carlos Fisher, and now-deceased owner Rod Hallman had agreed in 2004 to begin paying her a second bonus determined by a formula devised by Fisher. In addition to her regular, on-the-books annual bonus, she said, she began receiving a much larger off-the-books bonus in the form of irregularly issued checks in varying amounts that were disguised to look like expense reimbursements for company salesmen.
During direct examination by Thomas on Friday, Horacio testified that when she worked at Sierra Seed, Carmen “would get her bonuses and she was proud of her bonus.”
But she didn’t talk about the specific amount of her bonus, or mention that she had entered into a scheme to commit federal tax fraud, he told Oriz during cross-examination.
“She said she was getting bonuses. Her bonus. Her bonuses,” he said. “I really didn’t go into too much detail. She’s been working for 17 years, 18 years for the same company. For many, many years she’s been talking about bonuses.”
“She didn’t come and tell you, ‘I’m going to make $30,000 more a year for being such a good employee?’” Ortiz asked.
“I don’t recall. I don’t recall (her) coming and telling me, ‘I’m making $30,000 more.’ I don’t recall,” he said.
“For five years over this indictment, almost $136,000 in Carlos Fisher formula bonus, your wife doesn’t say a word to you about where all this extra money is coming from?” she asked.
“No,” he said.
On Thursday, Damon asked Carmen if Horacio was aware of the alleged illegal bonus scheme.
“I mentioned that I was getting bonus, but he never asked me how much. He really never asked me a lot about finances,” she said.
“As far as being paid bonuses in other people’s names, did he have any knowledge of that?” Damon asked.
“No,” she said.
Thomas asked Horacio on Friday what he would have done in 2004, “if somehow you found out or believed that your wife was doing something illegal?”
“I would definitely contact my legal department from work. Contact my supervisor…” he said.
“You’re a sworn officer. If you become aware of a crime, you know what you have to do,” Thomas said.
“This is your wife of 20 years. Would you have done that?”
In her cross-exam, Ortiz reminded Horacio of his police academy education, which included training in asset forfeiture and racketeering. She also asked him about cases in which a person doesn’t acknowledge committing a crime.
“You’re trained to look at indicators of criminal activity?” she asked.
“Yes,” he said.
Horacio is currently on paid administrative leave from DPS. When Damon asked Carmen if she regretted getting involved in the alleged tax fraud plot, she noted that her husband had been put on leave.
“I killed his career,” she said, sobbing.
Another piece of evidence that prosecutors have presented as alleged evidence against Horacio Lomeli is a torn-up piece of paper that Nogales Police Department Detective Mark Beal found in the toilet of the Meadow Hills home while executing a search warrant on Aug. 10, 2009.
The paper turned out to be a printout of an email that Carmen, then in Guaymas, Sonora, had sent to Horacio outlining a to-do list for him to accomplish before joining her in Mexico.
Because some of the tasks involved bill payments, and because the message included an attached Excel sheet related to the Lomelis’ finances, prosecutors have suggested that Horacio was trying to destroy evidence of his involvement in financial matters.
Beal testified earlier in the trial that he went to the Lomeli home that day looking for Carmen. After Horacio told him she was in Guaymas, he said, he went to solicit a search warrant, leaving Horacio at the house.
Horacio testified on Friday that his son and mother were at the home when Beal first arrived. After Beal left to get the warrant, he said, he took his mother and son to be picked up at the entrance to Meadow Hills and brought to his in-laws’ house. Then he returned home to get ready for work.
Back at home, he reached into his pocket and found a folded piece of paper, he said.
“Then I saw it was a to-do list, a shopping list from my wife, and I’d been working on this list for many, many days, gathering all these items…
“I saw the list, and I just feel this rage, this cold sweat,” he said. “I was so mad that here I am, picking up clothes and toilet paper and shoes for her and blouses and stuff, but then I have to deal with officers in my house, and I was so mad. I was so mad and I just ripped, tore it apart and I threw it in the toilet…”
“Did you flush the toilet?” Thomas asked.
“Were you trying to destroy evidence?”
“No. No, I was just mad,” he said. “If I had her passport in my pocket at the same time I probably would have ripped it up, too. I was just mad.”
Ortiz asked him later why he had returned to the home, instead of going to his in-laws’ house with his mother and son.
“So you could have grabbed your uniform and the stuff that you needed for work and you could have just left the home and let the police search.”
“It didn’t cross my mind,” he said. “The first thing that came to my mind was just to get my mother and my kid out of the house.”
Lawyers on both sides of the case are expected to deliver the closing statements when the trial resumes for its ninth day on Tuesday at 8:30 a.m.