Democratic campaign treasurer Kinde Durkee is expected to plead guilty to stealing millions from the accounts she controlled for her California political clients, according to two sources close to the case.
The news came as the U.S. Attorneys Office filed fresh charges against the veteran Democratic treasurer, who was arrested last fall. A spokeswoman for the U.S. Attorney in Sacramento could not confirm whether Durkee is expected to plea, but said the filing of such documents typically indicate plea negotiations are in the works.
The 17-page complaint, filed Tuesday in the United State District Court for the Eastern District of California, details fraud and embezzlement stretching back more than a decade, accusing Durkee of "routinely misappropriating" funds from clients' accounts and filing false reports with the Secretary of State and the Federal Elections Commission. The document says at least 50 victims lost a combined $7 million-plus due to her actions.
The document says the money, which was transferred between accounts and to her firm, Durkee & Associates, without client authorization, was used to pay personal expenses, including a mortgage and credit card bills, and payroll and other business expenses.
In one 2010 transaction listed, Durkee allegedly used $23,000 intended for U.S. Sen. Dianne Feinstein's federal campaign account to help pay a $30,000 American Express tab that included charges from the Los Angeles Dodgers, Amazon.com, Disneyland and Trader Joe's grocery store. Other payments made with client money went to health insurance companies and residential services for her elderly mother. In some cases, she allegedly transferred money or diverted deposits to cover for previous unauthorized withdraws from other clients' accounts.
Democratic Assemblyman Jose Solorio, a Durkee client who prosecutors say lost more than $600,000 in the hands of his former treasurer, praised the news of the plea deal in a statement. The Santa Ana Democrat said he urged investigators to "be aggressive in making sure Durkee serves as many years as possible in federal prison."
"In finalizing a long sentence term, I'm hoping the FBI and courts send a message to treasurers, accountants and book keepers around the country that defrauding their clients is a serious matter," he said in the statement.
Politico first reported Tuesday evening that Durkee could enter the guilty plea as soon as Friday. Prosecutors will seek a sentence of 11 to 14 years in prison as part of the agreement, according to Politico.
Despite a history of violations and fines from the state Fair Political Practices Commission, Durkee had amassed a client list that included some of the biggest names in California Democratic politics as well as a number of nonprofit organizations. Feinstein, who says millions are missing from her re-election account, wrote a $5 million check to her campaign account to make up for the losses. The senior senator is one of several politicians who have filed lawsuits to recoup some of the allegedly stolen money. The lawsuit also names the California bank Durkee used for her business, arguing that the number of money transfers between accounts and overdrafts Durkee allegedly used to cover her embezzlement scheme should have raised a red flag for the institution.
The arrest set many clients scrambling to sort out their own financial situations, a difficult task given the scope of the alleged embezzlement and the falsified campaign balance reports Durkee allegedly submitted to state election officials, and raise more money to replenish their campaign funds ahead of the upcoming elections
A preliminary hearing in the case has been delayed several times, with court documents citing the need for additional time to review evidence. It was last scheduled for March 30 at 2 p.m.
Editor's Note: This post was updated to reflect allegations in new charging documents released this evening. Updated at 10:10 p.m. March 27, 2012.