Fake New Mexico Audit Raises New Concerns

A New Mexico financial regulator says it's investigating whether there were possible violations of state securities laws by the faking of a New Mexico Finance Authority audit.  The probe by the state Securities Division was announced Monday at a meeting of the governing board of the Finance Authority, which disclosed last week that a fake 2011 audit had been created and was sent to investors and creditors. Authority officials have blamed a former controller, who left in June, for misrepresenting that financial statements had been audited by an outside firm.

The Finance Authority issues bonds and provides low-cost financing to New Mexico governments for capital improvement projects.

The state auditor's office is investigating the fraudulent audit, and a national ratings service is considering downgrading some of the authority's securities.

Copyright 2012 The Associated Press.