Lacy's wife is a Shumway, a relative of the notorious Earl Shumway, who in the 1980s and 1990s bragged about ransacking thousands of sites, including graves - "Around here, it's not a crime. It's a way of life," he famously said. Shumway was eventually convicted and sentenced to more than six years in jail, though only after he had informed on other pot-hunters, rounded up in a raid in 1986.
The combined effect of the two raids, says Lacy, is a community living in fear that innocent people will be locked up for owning a pot that has been in their family for generations.
"Blanding will never get over it," the sheriff says. "And it's not going to stop people collecting."
Curator Marci Hadenfeldt strolls through the cool, softly lit floors of the Edge of the Cedars museum, past cases of exquisitely decorated pots, baskets, tools and jewelry - one of the largest collections of Anasazi artifacts in the Southwest.
Most displays have an official note identifying the artifact, describing where it was excavated, and the era it dates to. Hadenfeldt stops at the largest collection - shelves of ceramic pots, hundreds of them, dazzling in their colors, shapes and geometric designs. The note next to the case states "Provenience Unknown."
Hadenfeldt sighs. Though the collection, much of it dug up illegally by Earl Shumway, is stunning, it is worthless in an archaeological sense.
"When things are looted you lose the context and the story of the piece in addition to the archaeological record," Hadenfeldt says. "The items are lovely and we can conjecture about where they might have come from, but we can't be sure."
There are signs throughout the museum explaining the laws, exhorting visitors to be good cultural stewards by leaving artifacts in place, even small pieces they might stumble upon hiking. "This is not just a good thing to do," the signs say, "it is the law."
But it is impossible to police. Every so often the museum will receive a box of pottery pieces, along with a note of apology, in the mail - sherds collected by hikers who later have regrets. The gesture is useless, Hadenfeldt says. The damage was done when they were removed in the first place.
There are dozens more artifact collections around town - in private homes, in trading posts, and in a most unlikely looking log cabin on the outskirts of town.
Huck's Museum and Trading Post is an astonishing place, its modest exterior hiding a vast trove of history and archaeology - rooms filled with arrowheads, thousands of them, metates, pots, atlatls, gourds, sandals, bone rings, beads, feathers, axes and jewelry.
"Huck" is Hugh Acton, stooped, whiskered and gravelly voiced, who jokes that at 81 he's an artifact himself. He charges $5 for a tour, and then spends over an hour shuffling from one room to the next talking passionately about the pieces and how he acquired them.
Acton, who has been collecting all his life, says he does so out of a genuine love for the past, and a desire to share it with everyone. His artifacts came from legitimate collections and dealers, he says, and are not for sale. It is legal to own artifacts that have been in circulation for decades, before laws protecting them were passed.
Acton grows serious talking about the raids, which he said have made collectors and dealers so jittery that people are nervous about doing business as usual.
"It should cure people of digging," Acton says, "but it won't."
At the Thin Bear Indian Arts trading post on the other side of town, Bob Hosler, 75, says the same thing. "It's not moral to dig in graves, but you can find this damn stuff everywhere," says Hosler, who claims to have once aimed a shotgun at pot-hunters digging on his land.
Hosler's small, dark store is crammed with traditional Indian jewelry, arrowheads, baskets and pots. Some are ancient artifacts that he found on his property, he says. Others he has owned for years.
Like other traders, Hosler believes illegal digging will persist because it's ingrained in the local culture and because the market is so lucrative. High-end galleries in Santa Fe can sell Navajo blankets and kachina dolls for hundreds of thousands of dollars. There are dozens of sites selling Indian artifacts on the Internet. As recently as May, Sothebys auctioned a classic Navajo blanket for $53,000.
The raids, which he calls "government entrapment of old men," have only cemented attitudes about pot-hunting and about federal interference in local affairs, Hosler says.
As he vents, a couple of women walk in carrying trays of handmade beaded jewelry. They are members of the Benally family, from the Najavo reservation south of Blanding and they have been trading with Hosler for years. They have nothing but kind words for the dealer, who greets them in Navajo and asks after their families.
But they have very different views about the raids.