Former California Campaign Committee Treasurer Sentenced for Fraud
|U.S. Attorney’s Office November 28, 2012|
SACRAMENTO, CA—U.S. District Judge Kimberly J. Mueller sentenced Kinde Durkee, 59, of Long Beach, California, today to eight years and one month in prison for five counts of mail fraud related to a long-running scheme in which she misappropriated millions of dollars from various federal and state campaign committees, U.S. Attorney Benjamin B. Wagner announced. She was also ordered to pay $10,529,916 in restitution to more than 70 victims of the fraud and to serve a three-year term of supervised release following her prison term.
This case was the product of an extensive investigation by the FBI. The investigation originated with an audit by an investigator with the California Fair Political Practices Commission. Assistant U.S. Attorneys John K. Vincent and Phillip A. Ferrari prosecuted the case.
Durkee pleaded guilty in March 30, 2012. The case is believed to be the largest embezzlement by a campaign committee treasurer ever prosecuted. There is no parole in the federal system, and Durkee will be required to serve at least 85 percent of the prison sentence imposed. As part of her plea agreement, Durkee agreed to turn over any equity in a property in Burbank, California, where her firm was located, and to liquidate her 401(K) account for use in restitution.
“The scheme perpetrated by Kinde Durkee was broad in scope and had a profound impact. She will now spend eight years in prison for exploiting her position of trust and using complex maneuvers to fool her clients into thinking all was well. The U.S. Attorney’s Office will continue to work with state partners such as the California Fair Political Practices Commission to expose and prosecute fraud, embezzlement, and other financial crimes,” said U.S. Attorney Wagner.
“Durkee’s greed manifested as blatant disregard and record-setting losses for the victim organizations. We will never truly know how such actions impacted the quality of life in the organizations’ respective communities,” said Herbert M. Brown, Special Agent in Charge of the Sacramento Division of the FBI. “Today’s sentencing is a testament to the commitment of our agents to thoroughly investigate and expose those who defraud, steal, and embezzle from those who have trusted them with their financial accounts.”
According to court documents, Durkee operated Durkee & Associates, a firm that specialized in providing accounting and campaign reporting services to state and federal political committees and non-profit organizations. Part of that service included filing campaign disclosure forms with the California Secretary of State in Sacramento (for state candidates or officials), or the Federal Election Commission (FEC) (for federal candidates or officials). In addition, Durkee served as the treasurer for many of her client committees and maintained bank accounts for her clients.
According to court documents, from approximately January 2000 to September 2011, Durkee operated a scheme to defraud clients of Durkee & Associates by routinely misappropriating client funds and submitting and causing the submission of false information to the California Secretary of State and the FEC. As a result of the false filings, clients believed that their campaign accounts had more money in them than they actually held. Durkee used the money she misappropriated to pay her personal mortgage payments and American Express charges and to pay for the business’s payroll and other expenses. To cover up the unauthorized withdrawals, Durkee repeatedly moved money between clients’ accounts.
During the sentencing hearing, Durkee apologized for the harm she had caused. In sentencing her, Judge Mueller described Durkee’s crimes as “egregious” and a “deep violation of trust” that impacted the democratic process.