Santa Fe (AP) — Former New Mexico lawmaker Vincent “Smiley’’ Gallegos and three others were indicted on felony charges in connection with a defunct Albuquerque-based housing program that owes the state $5 million.

Gallegos, the former executive director of the Region III Housing Authority, was charged with fraud, money laundering and conspiracy in two sets of grand jury indictments filed Friday in state District Court in Albuquerque. His attorney said he would be cleared of wrongdoing.

Also indicted were the authority’s former bond counsel, Robert Strumor; accountant Dennis M. Kennedy; and lawyer David N. Hernandez.

The indictments followed an investigation by New Mexico Attorney General Gary King’s office. A spokesman said King would have no comment.

The charges against Strumor and Kennedy include fraud, money laundering and conspiracy. Hernandez was charged only with tampering with evidence, related to invoices.

The Region III Housing Authority failed to repay $5 million in bonds sold to the State Investment Council in 2003 and 2004.

The indictments allege misuse of the bond proceeds.

Gallegos resigned in 2006 as the executive director of the agency, which covered Bernalillo, Sandoval, Torrance and Valencia counties and was intended to provide affordable housing.

A Democrat, he represented a Clovis district in the state House from 1987 through 1996.

“This is actually much more complicated than it looks, and it will go much farther before we are through,’’ said Gallegos’ lawyer, Paul Kennedy. “We have every confidence that Smiley will be vindicated in the end.’’

One set of indictments relates to a $300,000 loan made by a Region III-related entity in January 2005 to a company owned by Gallegos. The indictment alleges that Gallegos “did embezzle or convert’’ the $300,000 to his own use through a money-laundering scheme.

The second set of indictments accuses Gallegos of fraud or embezzlement in the amount of $343,000. Although it’s not specified in the indictment, that may refer to the alleged misuse of bond proceeds outlined in a 2006 State Investment Council report.

The State Investment Council says Region III used that amount of money ostensibly to buy five properties in Edgewood, but those properties already had been acquired by Region III.

Other allegations in the second set of indictments involve the transfer of money in and out of bank accounts belonging to Region III and a related entity.

The State Investment Council in the 2006 report said the authority had misused bond proceeds to pay salaries and benefits, make loans, and buy vehicles.

The council last year filed a lawsuit against Gallegos and Strumor in an attempt to recover the $5 million.

That lawsuit, which is still pending, alleges that Gallegos provided false information to the council and misspent much of the $5 million, and that Strumor misrepresented how the authority would spend the bond money.

Region III was taken over in August 2006, following the default, by the Mid-Region Council of Governments, which is still working to dispose of the authority’s assets.

And the regional housing authority system has since been revamped by the Legislature. The seven previous affordable-housing authorities have been consolidated into three, which have curtailed powers and oversight by the Mortgage Finance Authority.

It was the second indictment in recent months alleging wrongdoing by a New Mexico public official.

In April, Public Regulation Commissioner Jerome Block Jr. was indicted, along with his father, for alleged misuse of public campaign funds in last year’s election. They are Democrats.

State Republican Party Chairman Harvey Yates Jr. said Gallegos’ indictment “reinforces a growing sentiment that we need to reverse the path on which this state is headed.’’

“For far too long, self-serving political insiders have exploited, at taxpayers’ expense, their positions for personal or political gain,’’ he said.