Long Beach Campaign Treasurer Embezzled $7M

A Long Beach woman who oversaw finances for many Democratic political leaders, including Sen. Dianne Feinstein, Southland congresswomen Loretta and Linda Sanchez and Assemblyman Jose Solorio, has pleaded guilty to five counts of mail fraud related to a multimillion-dollar embezzlement scheme.

Kinde Durkee admitted Friday in the plea agreement that her scheme to shuffle around clients' money to pay her personal and business expenses, then pay back embezzled money to other clients she stole from, cost the victims more than $7 million, according to Lauren Horwood, a spokeswoman for the U.S. Attorney's office in Sacramento.

It's believed to be the largest embezzlement scheme by a campaign committee treasurer ever prosecuted, according to Horwood. Messages left for Durkee's attorney, Daniel V. Nixon, were not immediately returned.

Durkee, 59, is scheduled to be sentenced June 20. The maximum punishment she faces is 20 years in prison for each count of mail fraud to which she pleaded guilty, and a $250,000 fine, but prosecutors said in the plea agreement that the sentencing guidelines were between 11 to 14 years in federal prison. Durkee's plea bargain includes a promise to try to restitution to victims, which will include liquidation of her equity in her property in Burbank, where her office was located, and her retirement funds. Durkee also victimized the Orange County Democratic Party and the Orange County Young Democrats, according to the party's executive director, Nick Anas.

``It's sort of a relief she at least pled guilty. Now, hopefully, we can move to the next step of finding a way to get back this money,'' Anas said. The Orange County Young Democrats have had $11,000 in funds frozen by the government during the investigation, Anas said. Anas did not think the financial losses would hurt Orange County Democrats too much politically. 

Solorio, who lost hundreds of thousands of dollars in campaign contributions in the scheme, slammed First California Bank for not stopping the embezzlement.

``As this criminal case begins to close with a guilty plea and long sentence, it's time for justice to be carried out through the civil case against Durkee and First California Bank,'' Solorio said. ``Today's hearing and this week's filing by the U.S. Attorney's office provides further evidence of what we already knew: this was a vast embezzlement scheme that could not have occurred without the knowledge and assistance of First California Bank,'' he said.

``We are beginning to see some justice, and I hope the judges involved are not lenient on Durkee and First California Bank.'' The assemblyman went on to say it was a ``massive betrayal of trust.''

A message left with First California Bank representatives was not immediately returned. The defendant started Durkee and Associates in April 2000 and registered as a limited liability corporation in September 2003. She had complete control of the records and finances of a list of high- profile clients, according to prosecutors. Over the years, she had control over about 700 bank accounts, including those for political campaigns, prosecutors said.

One of her earliest victims was Jerome Horton of the California State Board of Equalization. Prosecutors said she took $200,000 from his campaign bank account between December 2006 and April 2008. Durkee repaid $90,000 to Horton's account between September 2007 and March 2010, prosecutors said. Even when she knew she was under investigation by the Fair Political Practices Commission for the campaign reports she filed for Horton, she repaid some of the money she took from his account by taking about $25,000 from Feinstein, $30,000 from Loretta Sanchez and $15,000 from Linda Sanchez.

Durkee would use the money she took from her clients to pay the mortgage on her Long Beach condo, meet payroll for her staff, pay health insurance bills, and to pay off credit card debt. Some of her personal expenses included Dodgers games, items bought from Amazon.com, Disneyland tickets and even goods bought at Trader Joe's, according to prosecutors. Durkee also used some of the money to pay for her mother's senior residential facility and to cover the bounced checks, according to prosecutors.

She also misappropriated $180,000 from the nonprofit National Popular Vote and National Popular Vote Institute, organizations dedicated to a national popular election for president. Durkee was the chief financial officer for the organizations. Durkee, who had ties to Correa going back to when he was in the Assembly in 1998, took more than $207,000 from the state senator to cover money taken out of the accounts of her other clients.

--City News Service