Durkee Pleads Guilty to Fraud

By Karen Gullo and David Watts Barton, Bloomberg, March 30, 2012

Kinde Durkee, a former campaign treasurer to Democrats in California including U.S. Senator Dianne Feinstein, pleaded guilty to charges she embezzled thousands of dollars from political committees that hired her.
Durkee, 59, was accused of misappropriating more than $7 million from 50 victims in what U.S. prosecutors said may be the largest embezzlement ever by a campaign treasurer. She admitted today to five counts of mail fraud in federal court in Sacramento.
For more than 10 years starting in 2000, Durkee moved client money into other accounts without authorization and used it to pay her mortgage, credit card bills, phone bills and other expenses, prosecutors said in a March 28 charging document. She also took money from some clients’ accounts and deposited it in those of other clients to cover the unauthorized withdrawals.
“Kinde Durkee’s casual embezzlements over a decade added up to devastation for many of her clients,” Sacramento U.S. Attorney Benjamin Wagner said in an e-mailed statement. “Like any fraudster, she depended on trust to perpetuate and conceal her scheme. In the world of politics, no less than in the world of finance, clients should be wary of relying on trust alone when choosing a guardian for their funding.”
Wagner said Durkee had signature authority for about 400 bank accounts over the years. She took $156,000 in 2010 from Feinstein’s campaign committee bank account, according to the government. The money was used to cover mortgage payments on Durkee’s home in Long Beach and American Express and Sprint bills, prosecutors said.
Other Durkee clients, including Democratic U.S. Representatives Susan Davis of San Diego and Loretta Sanchez of Santa Ana and the Los Angeles County Democratic Party, reported losses of $200,000 or more, according to court papers.
U.S. District Judge Kimberly Mueller scheduled sentencing for June 20.
“She accepts full responsibility for her actions and she came to court today to acknowledge what’s she’s done,” her attorney, Daniel Nixon, said after court. Asked about her motivation, he said ’’that will come out at sentencing.’’
Nixon said prosecutors will seek a sentence of 11 1/4 years in prison based on their assessment of the number of victims and losses of $7 million to $20 million.
“We feel that’s excessive,” Nixon said, adding that Durkee will seek a lower sentence.
The government will seek restitution for victims, according to the statement from Wagner’s office. As part of the plea agreement, Durkee will forfeit her equity in the Burbank, California, property where her now-defunct firm operated, as well as her 401(k) retirement account, prosecutors said.
“The likelihood of the victims being made whole is very slim in my opinion,” Wagner said at a press conference.
Durkee, who ran Durkee & Associates, submitted false information to federal and state campaign finance regulators during the period she was embezzling funds, prosecutors said. Many of Durkee’s clients thought their campaign accounts had more money than they actually did because of the transfers,
according to the government.
The case is U.S. v. Durkee, 12-00123, U.S. District Court, Eastern District of California (Sacramento).