The former chief financial officer of what is now Christus St. Vincent Regional Medical Center and an Albuquerque woman who is in a relationship with former Albuquerque mayor and congressional candidate Martin Chávez have been indicted on felony fraud and conspiracy charges.

New Mexico Attorney General Gary King announced Thursday that Richard Crabtree and Loretta Mares are both being charged with multiple counts of fraud and conspiracy for allegedly collaborating to embezzle millions of dollars from the hospital.

According to court documents, Crabtree approved at least $2.5 million worth of payments to Mares and five companies owned in part by Mares for work related to updating the hospital's information systems. Crabtree, in turn, received payment from Mares or the companies, according to the indictment.

"St. Vincent largely received no or minimal work product" for the payments authorized by Crabtree, according to the indictment, and the work was "frequently unnecessary, of poor quality or completely bogus."

The indictments state that Crabtree and Mares worked as a team to bilk the hospital of the money between 2005 and 2008, creating false letterheads for companies owned by Mares that "existed largely on paper only," skirting hospital administrative protocols and staging displays to mollify other employees and "prevent detection of the scheme."

Crabtree was indicted on nine counts of fraud over $20,000, eight counts of fraud of an amount between $2,500 and $20,000, one count of attempt to commit felony fraud and one count of conspiracy to commit fraud. Nine of the counts are second-degree felonies and 10 of the counts are third-degree felonies, exposing Crabtree to a possible total maximum sentence of 148 years in jail and/or fines of up to $140,000.

Mares was indicted on eight counts of fraud over $20,000, two counts of fraud between $2,500 and $20,000, one count of attempt to commit felony fraud and one count of conspiracy to commit fraud, exposing her to a potential total maximum penalty of 112 years in jail and/or fines of up to $100,000.

According to court documents, Mares and Crabtree co-signed on a loan for a Toyota Land Cruiser. The indictment states that moneys obtained through the scheme were also deposited in various bank accounts held by Mares and Crabtree, and used to make payments on credit cards and country club memberships in Crabtree's name.

The documents also note that some of the money helped fund the construction of a home in Castle Rock, Colo., where Crabtree now lives.

Though the indictments note that Crabtree authorized at least $2.5 million in payments to Mares and her associates, the amounts listed in the indictments against the two individuals are significantly lower.

Crabtree is being indicted on charges of defrauding the hospital of about $419,456, while the indictment against Mares' links her to $338,456 worth of fraud.

Great American Insurance Co. filed a lawsuit in December against Crabtree, Mares, Mares' two brothers, Steven R. Gallegos and Michael Gallegos, and companies owned jointly by the siblings seeking to collect $3.2 million, which the company paid the hospital to cover the losses. The complaint states that Crabtree and Mares had a personal relationship that predated his hiring by St. Vincent in September 2002.

Asked about the discrepancies between the amount of money allegedly missing from the hospital and the amounts listed in the indictments, King's office responded in writing, saying, "Sorry, but we will not be discussing the charges in the indictments any further until we bring our case in court."

King said in a news conference Thursday that his office had not tried to obtain indictments against Mares' brothers. He said he could not comment on whether there were plans to do so in the future. Attempts to contact the brothers have been unsuccessful.

In December, a campaign manager for Martin Chávez -- a three-term mayor of Albuquerque who is running for the U.S. House of Representative seat being vacated by Martin Heinrich -- confirmed that Chávez and Mares lived together.

The campaign manager said in a statement Thursday that the pair are no longer living together but declined to comment further on the relationship.

Although hospital administrators and King's office have known about the alleged embezzlement since 2008, the year Crabtree was fired by Christus, the issue didn't come to light until recently when the insurance company filed its claim.

King's office told The New Mexican in December that it had received the case "several months ago." But later -- after The New Mexican obtained documents showing the case had been opened in 2008 -- said King's spokeswoman had made a poor word choice in an attempt to avoid making specific comments about the case.

King said Thursday that the case against Mares and Crabtree is "more straightforward," than some other white-collar crimes his office has investigated. "So we are hopeful it will move along quickly," King said, adding that it could still take a "significant amount of time" and "a number of months" to resolve, based on the volume of evidence and the caseload of the courts.

Mares -- who also goes by the name Bernadette Gallegos -- could not be reached for comment. The person who answered the phone at the office of Albuquerque attorney Robert Gorence confirmed Mares is a client.

Crabtree has not returned phone messages seeking comment. His attorney, B.J. Crow of Albuquerque, said he'll vigorously defend his client against the charges.

The next step in the process will be arraignments, at which Mares and Crabtree will each have an opportunity to enter a plea. If they plead not guilty, they may or may not be required to post a bond to remain out of jail while the case works its way through the courts.

Contact Phaedra Haywood at 986-3068 or phaywood@sfnewmexican.com.