Former Democratic campaign treasurer Kinde Durkee was sentenced Wednesday to eight years in federal prison for defrauding high-profile clients, including U.S. Sen. Dianne Feinstein, of at least $7 million.
Durkee, 59, was sentenced in U.S. District Court in Sacramento. She pleaded guilty in March to five counts of mail fraud. The judge also ordered Durkee to pay $10.5 million in restitution to her victims.
Durkee appeared in court for the sentencing dressed all in black. Reading from a prepared statement, her voice quavering at times, Durkee apologized to her former clients and employees. “I’m truly sorry for the hurt I have caused.” she said.
U.S. District Judge Kimberly Mueller called Durkee’s crimes “significant and egregious.”
She said “the violation of trust cannot be overstated and the potential that certain elections were affected.”
The judge added it was Durkee's “inability to acknowledge her limits that led to her downfall.”
In papers filed with the U.S. District Court in Sacramento last week, federal prosecutors said Durkee spent the money on herself, then filed false campaign disclosure papers to cover it up.
In pre-sentencing documents, Durkee’s attorney said her troubles began when she took over a business she wasn’t able to manage. Durkee failed to confront clients who owed her money, and was loathe to fire incompetent employees, instead paying fines incurred from their mistakes with her own money. As the business' finances deteriorated, Durkee began “borrowing” money from clients' accounts.
Durkee’s attorney, Daniel V. Nixon, wrote: "Although a significant amount of money was used to pay for personal expenses, including mortgage payments and credit card charges, a great deal of the stolen funds were used to keep the business afloat and her employees employed."
Nixon added that the situation eventually “spiraled out of control, she lost track of the amount of the shortfall and it ultimately reached a level that she will be unable to repay in her lifetime."
Durkee took the money from more than 50 clients including Congresswoman Loretta Sanchez and California State Senator Lou Correa. Sen. Feinstein has said she lost about $4.5 million in the scam. The victims will likely recoup only a fraction of their losses.
Earlier this week Durkee’s bank released $2.5 million in clients’ money that had been frozen since the treasurer’s arrest.
As part of her plea agreement, Durkee liquidated her 401K. Her attorney says the $90,000 dollars will be transferred to the court to pay for restitution. Proceeds from an upcoming auction of Durkee’s office building in Burbank will also go to that account.