Calif. campaign treasurer pleads guilty to looting $7M

FILE: This photo shows Kinde Durkee. (Fox News)

SACRAMENTO, California – A former California campaign treasurer pleaded guilty Friday to looting at least $7 million from the accounts of dozens of Democratic candidates and political organizations, in one of America's most egregious political embezzlement cases.

Kinde Durkee, who had operated Durkee Associates of Burbank until her arrest last September, entered the plea to five counts of mail fraud in U.S. District Court in Sacramento. The plea deal carries a sentence of 11 to 14 years in federal prison.

U.S. Attorney Benjamin Wagner said he believed the actual fraud was closer $10 million and described Durkee as "the Bernie Madoff of campaign treasurers," referring to the infamous New York financial manager convicted of operating a Ponzi scheme.

"She embezzled millions of dollars from her many clients," Wagner said during a news conference after the court proceeding. "This is believed to be the largest embezzlement scheme ever by a campaign treasurer."

The plea ended a criminal case that left numerous state and federal candidates with little or no money in their campaign accounts, heading into an election year in which they face newly drawn districts and a new primary system.

Durkee, 59, now faces civil lawsuits from U.S. SenDianne Feinstein, who believes she may have lost as much as $5 million, and other victims.

Durkee also was ordered to pay restitution, in part through the value of her home and business assets, but it was not immediately clear how much money the sale of those assets would provide to victims. A court filing earlier in the week said she and her husband, John Forgy, had agreed to put up for federal forfeiture an office they owned in Burbank.

Durkee also agreed to hand over the assets in her retirement account, estimated to be valued between $100,000 and $120,000.

Despite the demand for restitution, Wagner was not hopeful that Durkee's former clients will see much, if any, of their campaign money returned.

Durkee was released after the hearing until her sentencing, which is scheduled for June 20.

After the court plea, her attorney, Daniel Nixon said Durkee would not make any statements. He said he plans to argue for a lesser sentence even though he agreed that victims lost more than $7 million.

She was released on the same terms as her previous release. Her attorney asked the judge that Durkee be allowed to go to her office building before giving it up.

Prosecutors say Durkee controlled some 700 bank accounts and embezzled money from at least 50 victims, including members of California's Democratic congressional delegation, Democratic state lawmakers and various political organizations.

Court filings say the money went to pay mortgages on Durkee's homes, various business expenses that included health care benefits and retirement fund contributions for her employees, and her mother's care in a home for seniors.

She also used the political accounts to pay for an array of personal expenses, including bills from Disneyland, Costco, Amazon.com, Ulta cosmetics and theLos Angeles Dodgers.

The California Fair Political Practices Commission said the Durkee case was by far the largest political embezzlement case in state history. Officials with the Federal Election Commission said it was the largest they could recall.

In 2010, Christopher Ward, a former treasurer for the National Republican Congressional Committee, pleaded guilty to embezzling nearly $850,000 from the NRCC and other political committees in the largest such federal case in memory. He was sentenced to three years in prison.

Prosecutors said Durkee also filed false information with the FEC and the California Secretary of State, which track campaign contributions and expenditures.

The case arose at the state level in 2010, when the Fair Political Practices Commission began investigating complaints related to state officeholders.

It unraveled as a complex shell game, in which Durkee was transferring tens of thousands of dollars between various campaign, business and personal accounts. The sheer volume of transactions complicated the case and led to multiple delays ahead of the plea deal reached this week.

Prosecutors say Durkee also misappropriated at least $180,000 from National Popular Vote, a group that advocates electing the president by popular vote rather than by electoral votes. Prosecutors say she used money from the group's account to cover health care costs, credit card bills and backfill the bank accounts of other candidates and committees.

Her former clients have been in limbo because their campaign accounts were frozen as investigators tried to trace the money.