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Democratic Treasurer Pleads Guilty In $7 Million Fraud Case

SACRAMENTO (CBS13) - A prominent Democratic campaign treasurer pleaded guilty Friday to five counts of mail fraud related to a scheme in which she embezzled millions of dollars from her clients.

Kinde Durkee, 59, of Long Beach entered the guilty plea at the U.S. Courthouse in Sacramento, admitting that the losses to victims exceeded $7 million. The case is believed to be the largest embezzlement by a campaign committee treasurer ever prosecuted, according to the U.S. Attorney's Office.

The investigation was prompted by an audit by an investigator with the California Fair Political Practices Commission. According to the plea agreement, Durkee operated Durkee & Associates, a firm that specialized in providing accounting and campaign reporting services to political committees for state or federal offices, including political campaign committees and nonprofit organizations.

Durkee served as the treasurer for many of her client committees and maintained bank accounts for her clients, including Democratic Senator Dianne Feinstein.

According to court documents, from about 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 Federal Election Commission.

Durkee used the money she misappropriated to pay her personal expenses, including mortgage payments and American Express charges; to pay business expenses, including payroll; and to repay unauthorized withdrawals from other client accounts.

"Greed is the root of all white-collar crime," said Herbert M. Brown, head of the FBI's Sacramento Field Office, in a press release announcing the plea. "Our agents tirelessly investigate these crimes that silently erode our communities, exposing those who purposely defraud, steal and embezzle from those they are entrusted to serve."

Durkee will be ordered to pay restitution to the victims and she agreed to turn over any equity in a property in Burbank where her firm was located. The firm is no longer operating. She also agreed to liquidate funds in a 401(k) account for use in restitution.

Durkee is scheduled to be sentenced by Judge Kimberly Mueller on June 20. She's likely be sentenced 11 to 14 years in prison.

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