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FRAUDBARON.com
The Anti-Fraud Professionals'
Source for Fraud News
#516 Updated: 12/02/07 1:21 p.m.

Doctor testifies in Twin Falls embezzlement case
magicvalley.com | 12/1/07 | Andrea Gates
A doctor took the stand Friday in the case of his former office manager, who allegedly took
more than $400,000 from a local women's health clinic over four years.  Karie Lynn
Eldredge, 45, is charged with four counts of felony grand theft. She appeared Friday in the
5th Judicial District Court for her preliminary hearing.  Magistrate Judge Roger Harris found
there was sufficient evidence for the case to proceed to district court, despite an attempt
from Eldredge's attorney, Michael Wood, to squash the legitimacy of the charges.  A civilian
investigator with the Twin Falls Police Department interviewed Eldredge Oct. 8. The former
office manager of Magic Valley Women's Health PC admitted she had been writing checks to
herself since 2004 - then stamping them with a doctor's signature and altering a
bookkeeping program, according to an affidavit filed in court. Despite these alleged
confessions, Eldredge's lawyer tried to highlight discrepancies in the state's case.  Wood
said the four counts of theft charged against Eldredge refer to "cash." And during Friday's
hearing, Wood said, hearsay testimony was presented addressing "checks."  But the judge
told the court legal elements for charging Eldredge with the crimes had been met, and he
bound her case over to district court. Her next hearing should likely occur within 10 days,
the judge said. Law enforcement authorities also assert Eldredge neglected to cut checks
for the clinic's rent and other bills. The company's worker compensation insurance policy
had even been cancelled and Eldredge was trying to get it back before she was fired in
October, the affidavit shows.  A lawsuit was filed by the clinic Oct. 23 in connection to the
business' large monetary losses.  It names Eldredge, her husband, four other individuals
and numerous "John Does."  It also names K&K Services, which according to the Office of
the Idaho Secretary of State is an assumed business name, created Aug. 9, 1999, by
Eldredge and her husband. Assumed business names are not Idaho business licenses.
The civil litigation goes in different directions than the charges levied against Eldredge. The
suit makes additional claims of conspiracy and racketeering. "(They) used the proceeds of
this racketeering activity in the operation of K&K Services and/or other business entities,"
the lawsuit shows.  Eldredge also told the investigator that she had fraudulently written
prescriptions to herself for Vicodin. She said she was addicted to the pharmaceutical drug
and to shopping, court records show. Eldredge blotted her nose with a tissue Friday when
she faced her former employer, Dr. Monte Crandall, as he took the stand.  Crandall said
Eldredge had worked at the clinic for a total of eight years, and served as its office manager
for six. Her responsibilities were large - handling "any expenses for the office," he said.
She was not allowed to use doctor signature stamps on checks, he told the judge.
The Twin Falls police civilian investigator, Erin Dayley, also took the stand Friday. She said
during their interview Eldredge said she felt glad to "come out in the open."  "She seemed
very distraught," Dayley told the court about the interview.  

No prison for embezzlement
southbendtribune.com |11/29/07 | Jeff Parrott
A woman who admitted to embezzling $80,000 from a physician will serve no prison time for
the crime, a judge ruled Wednesday.  Under a binding plea agreement she reached with
prosecutors, meaning the judge had to accept or reject it in its entirety, Judge John
Marnocha sentenced Patricia Young- Rynearson to 18 months in prison on each of four
counts of theft, for a total of six years, but suspended all of that time. She will spend three
years on probation and must pay $80,000 in restitution.  Her victim, Dr. David Baxter, who
ran a small general practice, asked to speak in court before Marnocha formally approved
the plea agreement. Baxter, his wife by his side, said he had come to regard Young-
Rynearson, her son and husband as family over the years. "I'm not here to say anything
against that plea agreement," Baxter said. "But she has not apologized, she has not
shown any remorse, and she has not returned any of the money she stole. She has
accumulated a lot of things. I would really like her to sell those things and begin to make
amends for what she has done."  Earlier this year, Young-Rynearson, 41, pleaded guilty to
stealing about $70,000 from another employer, Sofa Select, after she left Dr. Baxter's
practice. For that crime, Judge Jerome Frese in June sentenced her to three years in prison
as a condition of her probation, meaning he could order her release any time he wishes.
When Young- Rynearson's attorney, Timothy McLaughlin, on Wednesday told Marnocha
about Frese's sentence, Marnocha rolled his eyes, shook his head and said, "Somebody is
going to take that up on appeal sooner or later." Frese often hands defendants suspended
prison sentences, then orders them to serve time in prison as a condition of their probation.
That means the defendant does not receive halftime credit for good behavior, as state
prison inmates typically do. Frese has said the practice gives him more control over a
defendant's rehabilitation.  At Wednesday's hearing, Marnocha asked Young-Rynearson if
she had anything to say. "Just that I'm very sorry, and as soon as I get out, I'm going to
start paying them back," said Young-Rynearson, her hands and feet shackled, wearing a
white prison uniform.  Young-Rynearson's identical twin sister, Kathleen Young-Eperjesi,
also faces theft and forgery charges for allegedly embezzling more than $54,000 from her
employer, Granger Irrigation Inc. Young-Eperjesi's case is set for trial Feb. 19.

Federal Employee Admits Vacation Fraud
ap.google.com | 11/30/07 | Don Thompson
SACRAMENTO, Calif. (AP) — A former federal worker who persuaded employees nationwide
to donate nearly 1,000 hours of their own paid leave so he could take time off for fictitious
cancer treatments pleaded guilty to fraud Friday.  Robert Joseph Thom, 45, of Oceanside,
admitted guilt for 10 counts of wire fraud that carry a combined sentence of up to 20 years
in prison. He is to be sentenced Feb. 8 in U.S. District Court.  Thom was an information
technology specialist with the U.S. Geological Survey in Southern California when he signed
up nearly a year ago for a national donor list. He falsely claimed that he had undergone
"multiple urgent surgeries for the removal of malignant tumors," according to court records.
He forged four letters from a doctor, all attesting to his ongoing medical problems, according
to a September indictment. A February letter claimed he needed more time off after
developing infections. The last letter, in June, alleged that Thom had developed a malignant
brain tumor.  Thirty Department of Interior employees responded to Thom's plea for help.
They donated more than 982 hours of leave time with a value of nearly $40,000 so he could
keep getting his salary and benefits while he was off work.  Donations came from Alabama,
Alaska, California, Hawaii, Nevada, Oregon, Virginia and Washington, court records say.
It wasn't until August that the Geological Survey's Sacramento office sent Thom's doctor
copies of the letters, according to an affidavit by an Interior Department investigator.
The doctor responded that the letters were "a complete and utter fraud," according to the
affidavit. Thom was a real patient, but he had never been treated for cancer, the doctor told
investigators. His attorney, Dennis Waks, declined comment.  Prosecutors said Thom has
agreed to make full restitution. He remains free on bond. Thom, who was hired by the
Geological Survey in 2004, is no longer a federal employee.

Feds charge ex-American Savings manager with bilking elderly customer
bizjournals.com | 11/30/07 Staff Writer
A former American Savings Bank employee who allegedly took money from an elderly
customer she befriended has been indicted by a federal grand jury on charges of bank
fraud, theft of public funds and embezzlement.  Marilyn DeMotta, a former assistant
manager at the bank's Hawaii Kai branch, allegedly involved herself in the personal financial
affairs of a bank customer and moved money belonging to that customer into other
accounts at the bank as well as at other banks, according to Edward Kubo, U.S. attorney
for Hawaii.  DeMotta, who was indicted Nov. 15, is charged with four counts of bank fraud,
four counts of embezzlement by a bank employee and two counts of theft of public funds,
Kubo said in a statement released Friday. DeMotta, who was fired by the bank in February
2005 and now lives in Las Vegas, faces up to 30 years in prison and a $1 million fine on
each count of bank fraud and embezzlement, and up to 10 years and a $250,000 fine on
each count of theft of public funds.  DeMotta has said previously that she was only trying to
help the customer with her finances and tax issues.  She said the customer had voluntarily
loaned her the money. The customer, Ada Lim, 92, of Honolulu, filed a lawsuit against the
bank in 2006, charging that executives failed to protect her from DeMotta, despite
suspicions about her. Lim said DeMotta befriended her, offered to help her manage her
money and then drained $900,000 from her account. American Savings Bank, a subsidiary
of Hawaiian Electric Industries (NYSE: HE), settled with Lim for more than $1 million earlier
this year.

Court rejects ex-Tyco exec plea to dismiss SEC case
reuters.com | 11/30/07 | Paritosh Bansal
NEW YORK, Nov 30 (Reuters) - A U.S. federal judge denied a request by a former senior
executive at Tyco International Ltd (TYC.N: Quote, Profile, Research) to throw out civil fraud
charges brought against him by securities regulators.  U.S. District Judge Robert Sweet in
Manhattan denied a request by Richard Power, who held several senior financial reporting
positions, to dismiss the complaint filed by the Securities and Exchange Commission,
according to a written ruling that was made public late on Thursday.  Power was one of
three former Tyco executives sued by the SEC in December last year. The other two have
settled the case.  The SEC alleged that Power and former executive Edward Federman
designed and implemented fraudulent accounting practices at Tyco. It alleged they inflated
Tyco's operating income by hundreds of millions of dollars through the use of a sham
transaction.  Power reported directly to Tyco's former Chief Executive Dennis Kozlowski.  
Kozlowski and former Chief Financial Officer Mark Swartz were found guilty of stealing more
than $150 million from the conglomerate and are in prison.  Power's lawyer could not be
reached immediately for comment.
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