Ed Auge pleads guilty to embezzlement; brother enters pre-prosecution program


After paying back more than $180,000 to their employee’s retirement plan, brothers and businessmen Ed and Robert Auge are now on probation for embezzlement and conspiracy.

Julia M. Dendinger-News-Bulletin photo: Los Lunas attorney Michael Sanchez, left, talks with the judge as his client, Ed Auge, right, looks on. Auge pleaded guilty to embezzlement and conspiracy.

After paying back more than $180,000 to their employee’s retirement plan, brothers and businessmen Ed and Robert Auge are now on probation for embezzlement and conspiracy.

District Judge William Sanchez agreed to accept a plea and disposition agreement Friday in which Ed Auge, 59, pleaded guilty to one count of embezzlement over $20,000, a second-degree felony; and one count of conspiracy to commit racketeering and embezzlement, a fourth-degree felony.

In return for Ed Auge’s guilty plea, the prosecution dismissed one count of racketeering and seven other counts of embezzlement. He was sentenced to five years probation, starting from the time the indictment was filed on Nov. 19, 2010.

Sanchez ordered the he be placed on supervised probation for one year, with the remaining time unsupervised.

The judge also granted him a conditional discharge, meaning if and when Ed Auge completes probation, the charges will be dismissed.

Robert Auge, 61, has entered into a pre-prosecution program with the district attorney’s office, in which he admits guilt, but the charges will be dismissed if and when he successfully completes his pre-prosecution probation, which can last from six months to a year. He was indicted on one count of embezzlement over $20,000 and one count of conspiracy.

David Foster, the special prosecutor assigned to the case, told the judge Friday the brothers, who own Auge’s Sales and Service, a car dealership in Belen, were indicted by a grand jury after an investigation showed they took $206,017 in assets from their employee’s pension fund, funneling it into the company’s bank account.

“When Mr. (Ed) Auge was questioned by investigators, he attempted to cover up what had happened,” the prosecutor said. “When questioned about the diversion and theft of the special dividends, he had no explanation for that and said he didn’t know where that money was.”

The judge asked the prosecutor how the theft was discovered, Foster said he wasn’t sure, but Auge’s defense attorney, Michael Sanchez, told the judge the investigation was initiated after there was a question about the retirement plan.

“The Auges were asked to respond in a document, in a letter, and in their response, they were self admitting what had happened,” the Los Lunas attorney said. “They explained the fact that they weren’t trying to hide anything, but what they had done.”

Michael Sanchez told the judge the Auges have reached a settlement with the Department of Labor, and have repaid the employees’ retirement plan in the amount of $187,000.

Foster said because the brothers have reached an agreement with the Department of Labor, and have paid the amount what was agreed to, the state agreed to go along with a plea agreement.

“Because of (Auge’s) willingness to address this and accept the consequences … we have no position on conditional discharge,” Foster said. “The fact that he (Ed Auge) has accepted responsibility is commendable.”

During the sentencing phase of Friday’s hearing, Jay Armstrong, pastor at United Methodist Church of Belen, spoke on behalf of Ed Auge, saying he’s known the family for 18 years.

“I’ve been his pastor and I’ve also bought cars from him,” Armstrong said. “I know that he’s raised three fine children with strong values and work ethic.”

Armstrong told the judge of Auge’s community ties and service, including his time with the chamber of commerce, various service clubs and the church.

“I know that Ed has made mistakes, and that’s why we’re here,” he said. “But I know him; Ed is a good man, and I’ve never believed this happened intentionally to try to enrich himself.”

Ed Auge also addressed the judge, first apologizing to the court, and then to the members of the retirement plan. He said he didn’t intend to hurt anyone or for “this to happen.”

“A mistake was made and we wish it didn’t happen, but we’re going on from here, doing our best to repay and refund the money to the plan,” Ed Auge said. “Certainly, this will never happen again. We know we’re not in a position to ever have this type of plan again or have fiduciary duties over a retirement account.”

The Belen businessman said his family has been a part of the community for a long time, and in business for nearly 70 years. He said they’re proud of the opportunities and the service to the community his family has provided, such as providing jobs.

“I would think our reputation among our former employees, and the community as well, is a good one,” he said. “We’re good people who try to do the right thing.”

Michael Sanchez told the judge his client has accepted responsibility for his actions and knows what he did was wrong.

“It should have never happened, but it did happen,” Michael Sanchez said. “Ed is really a pillar of our community. He has no prior arrests, no convictions of any kind. They have been good to this community and have a very staunch reputation.

“As a result of all of this, the Auges are no longer in a business like they once had,” he said. “The stigma that is attached when these types of things happen when a community loved you, and all of a sudden somehow doesn’t love you as much as it used to. Those are punishments — that’s how a community punishes individuals in regards to actions they’ve taken.”

-- Email the author at cgarcia@news-bulletin.com.