SACRAMENTO, Calif. (AP) – A former Democratic campaign treasurer was sentenced Wednesday to more than eight years in federal prison for defrauding high-profile clients such as U.S. Sen. Dianne Feinstein in a case that a judge said tampered with the electoral process.
Kinde Durkee, who has been described by prosecutors as the Bernie Madoff of campaign treasurers, was sentenced to 97 months and ordered to pay $10.5 million in restitution after pleading guilty to five counts of mail fraud in March. It’s unlikely, however, that most of the money will ever be repaid, since Durkee has few assets.
During sentencing, U.S. District Judge Kimberly Mueller emphasized the egregious nature of Durkee’s crimes.
“What she did had an impact on the political and electoral processes on which our democracy is based,” Mueller said.
Dressed in black pants and a black sweater, the 59-year-old Durkee apologized in court to “those who trusted me and I betrayed.”
“I take full and complete responsibility for what I’ve done,” Durkee told the judge, her voice cracking.
Durkee acknowledged in her plea deal to defrauding clients of more than $7 million, though prosecutors believe the figure is closer to $10.5 million.
Feinstein said she lost about $4.5 million in the scam that also targeted dozens of state lawmakers and nonprofit political groups. The restitution order names 77 different victims.
Prosecutors and Durkee’s attorney, Daniel Nixon, said she ran the equivalent of a shell game from her Burbank office, shifting millions of dollars among bank accounts for politicians, community groups, personal accounts and those of her business, Durkee & Associates.
“Ms. Durkee was involved in a business that could not support itself and as a result, she availed herself of her clients’ funds to operate the business,” Nixon said outside court. “She’s an intrinsically good person who did some really bad things here, and today was the day for her to accept responsibility.”
Authorities said she used the money to pay mortgages for her home and business, to pay her employees, care for her parents in a home for seniors and for some pleasure items such as season tickets to the Los Angeles Dodgers.
The judge said nothing suggested Durkee lived a luxurious lifestyle, and she asked that Durkee be ordered to serve in a prison that has mental health services so she could receive counseling.
Durkee is scheduled to surrender to U.S. marshals in Los Angeles on Jan. 2. She remains free on $200,000 bond.
Nixon said in the court filing that Durkee was incapable of managing the business she acquired from its founder in 2000, partly because of her fear of conflict, which led her to avoid pursuing clients’ debts and refuse to fire incompetent staff.
The report also said Durkee has always been known as a kind and generous woman. Durkee’s husband of nearly 30 years, John Forgy, has been unemployed for more than 15 years, “which increased the financial pressure on Ms. Durkee to support them,” the report said.
Durkee’s fees also were cheaper than a lot of her competitors, so she stole funds to make up the costs, U.S. Attorney Benjamin Wagner said outside court.
She was a poor business manager who deliberately defrauded her clients for more than a decade, as well as duping the state Fair Political Practices Commission and the Federal Election Commission, Wagner said.
“Ms. Durkee repeatedly lied to clients, lied to the FPPC, lied to a lot of people, lied to the FEC about what was in the accounts, so it was very deliberate over time,” he said.
In a statement read in court, U.S. Rep. Susan Davis said she felt personally betrayed by Durkee, who took nearly $160,000 from her congressional campaign account, and that Durkee owed an apology to thousands of donors whose faith in democracy is now shaken.
Davis said Durkee had hurt “the reputation of our state and its political infrastructure.”
The crimes could have carried a maximum penalty of 100 years, but Durkee’s plea deal called for a possible sentence of 11 to 14 years.
The judge followed the prosecutors’ recommendation of 97 months for each of the five counts, to be served concurrently, although she said she considered imposing a longer term.
The roster of victims also included Reps. Loretta Sanchez and Laura Richardson; state Sen. Lou Correa, D-Anaheim; Assemblyman Jose Solorio, D-Santa Ana; and political nonprofit groups such as the Los Angeles County Democratic Party.
The scheme was uncovered by investigators with the California Fair Political Practices Commission, who noticed discrepancies in the filings for Solorio and asked the FBI for assistance. The state lawmaker lost at least $677,000 to Durkee, according to the criminal complaint.
As part of restitution, Durkee and her husband have agreed to forfeit the Burbank office from which she operated and to hand over her 401(k) retirement account, valued at about $90,000.
(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
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