Sunland Park, N.M. – There is perhaps no other city in the country like Sunland Park, N.M.
The dusty border town minutes from El Paso, Texas, has been called "a city in chaos" by the state auditor, because a slew of public officials are facing felony charges that they ran City Hall like a personal piggy bank, tried to steal an election in order to remain in power and ruled the 14,000 residents through intimidation and fear.
The state is now moving to take over financial oversight of the city, as the council scrambles to try and name a new mayor.
The explosive case even involves Mexican prostitutes, strippers and an undercover video of a mayoral candidate getting a lap dance from a topless woman. The video allegedly was used to try to force him to drop out of the race.
Authorities say the extortion investigation has revealed widespread voter fraud and public corruption in the small city just south of the Rio Grande.
"It started with extortion charges, and from that it then led us to the voter fraud cases," says Dona Ana Third Judicial District Attorney Amy Orlando, who is prosecuting the growing case.
So far, her office has charged 12 people, many public officials and city employees, including 28-year-old Mayor-elect Daniel Salinas, who faces dozens of charges in four separate cases. He was barred from taking office, and the city has been without a mayor since the election on March 6. Isabel Santos is serving as mayor pro tem in the meantime.
The criminal charges against all the defendants range from voter fraud to bribery to extortion to conspiracy to kickbacks to blackmail.
"The whole common scheme was to get Mr. Salinas elected," Orlando told Fox News. "It was all done to further Daniel Salinas and the other people who wanted to stay in control of all the money, all the resources, which just hurts all of the citizens of Sunland Park.”
Among the allegations are charges that city workers registered people who didn't even live in New Mexico and convinced them to vote for Salinas during early voting.
In addition, absentee ballot applications were allegedly intercepted before reaching the city clerk, so that Salinas’ opponents could not hand them out to their supporters.
"They pressured the poor, old people, the people who don't know English. They were forced to sign without knowing what they were signing. It’s incredible, it’s disgusting," mayoral candidate Gerardo Hernandez told Fox News.
Hernandez says he was ahead on election night during in-person voting, but after the absentee votes were counted, he lost to Salinas by 84 votes. He charges the election was stolen from him "by manipulating the absentee and early voting."
It is a wonder that he stayed in the race. It was Hernandez who was caught on tape getting a lap dance from a topless woman. The video mysteriously surfaced during the campaign in an attempt, he says, to destroy his candidacy and force him to quit.
Salinas and others are charged with extortion over the tape. Prosecutors say the Salinas faction used city money to make the tape and pay for the topless dancer.
"They tried to get me out of the race," Hernandez said. "I said, well, I'm not going to withdraw from the race. If you want to show it to the media, show it. I am not going to withdraw. That's extortion."
He says despite the salacious video, most of the people in Sunland Park support him because "they knew it was a set-up. They knew we're human. I felt it was a very cowardly act."
Prosecutors are also investigating about 170 votes that they believe are fraudulent, including the ballots of residents of nearby El Paso who illegally voted in Sunland Park.
One couple, Juana and Arturo Estrada, told Fox News that the director of the Sunland Park Senior Citizens Center, Silvia Gomez, told them that they could register and vote in Sunland Park, even though they live across the state border.
"I told her we live in Texas,” said 56-year-old Arturo Estrada, who came to the United States from Mexico when he was 18 and worked as a carpenter in Chicago to support his family until he retired. “She said no problem,” and then registered Arturo and his wife, Juana Estrada, for the upcoming election.
The couple says they stressed to Gomez that they hoped to build their dream home in Sunland Park, but they still resided out of state and were not city residents. Gomez has been charged with conspiracy to commit false voting and, according to court papers, admitted to investigators "that she had registered several people to vote using her address."
So far, prosecutors have found 13 people who were registered to vote from her house, including the Estradas. No one was home when Fox News visited for comment.
"It has always seemed like this case has been a political witch-hunt," says Salinas' attorney, Joshua Spencer. He told Fox News that Salinas, who is not charged with a voter fraud count, "absolutely did not" try to steal the election.
"The people made their decision, the people voted. The votes speak for themselves. Mr. Salinas won the election while he was accused of this crime (extortion), the people knew about it, so it wasn't a secret and they still voted him as mayor. He didn't steal the election, he won the election."
Spencer says that Salinas cannot be held accountable for possible illegal acts carried out without his knowledge by supporters. He also wants an FBI investigation of the state investigation, saying that for his client, the case has "ruined his political reputation,” and that the charges “have physically and emotionally drained him.”
Salinas remains behind bars, unable to post the $150,000 bond. Spencer says his client will again plead not guilty at the next arraignment Monday, on the latest charges.
But Orlando, the prosecutor, insists she will not be deterred.
"The fundamental right to vote, that's what our democracy is based on," she said. "So even if you take away one vote by it being illegal, you take away the voice of someone that is there and voting honestly. They vote us into office and … they want to know that they can trust their elected officials. ... So when you find out that there is an election that is being mishandled and is being corrupt because of hiding of ballots or trying to take an unfair advantage, of course that makes all politicians or elected officials look bad. And I think that makes citizens feel, who can they trust if they can't trust the people they are electing?"
Hernandez said he is saddened by the fraud he says he has witnessed..
"The vote is the sacred right of the United States, of citizens of the United States," he said. "We are the example of democracy for the world, for the entire world. It shouldn't be happening."
The allegations have also so disheartened Arturo and Juana Estrada that they refuse to vote again. "I changed my mind,” Arturo Estrada said. He told Fox News he trusted the Sunland Park authorities, and the result was a visit from the police.
He emphasized that he and his wife are hard-working, law-abiding citizens. They had planned to vote in the upcoming presidential election, but no longer have faith in the electoral system.
“We don’t want to vote no more, nowhere,” he said.
Fox News' Meredith Orban contributed to this report. If you suspect voter fraud or election problems where you live, tell us: Voterfraud@Foxnews.com.
Follow Eric Shawn on Twitter: @EricShawnTV