Former DHS Worker Sentenced to 37 Months in Prison for Fraud
Oklahoma City, Oklahoma – Yesterday, KATHARINE ANNE DAUGHERTY, 57, of Bethany, Oklahoma, was sentenced to serve 37 months in prison in connection with a scheme to take money by false pretenses from the United States Department of Labor, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
Daugherty worked for many years as an Adult Protective Services Specialist with the Oklahoma Department of Human Services ("DHS"). At DHS, Daugherty oversaw the financial accounts of persons placed under the guardianship of DHS Adult Protective Services. In 2009, an Oklahoma state judge appointed DHS as the guardian for "L.J.A.," an elderly man in a Bethany nursing facility. Daugherty was added as a trustee and signatory to L.J.A.’s bank account in May 2009. L.J.A. received monthly disability compensation benefits from the Office of Workers’ Compensation Programs within the United States Department of Labor. L.J.A. died in March 2010, and his entitlement to federal benefits ended upon his death.
On September 11, 2012, Daugherty was charged in a one-count Information with wire fraud. The Information alleged that from March 2010 to May 2011, Daugherty defrauded the Department of Labor through false documents that induced the agency after L.J.A.’s death to continue paying monthly benefits to L.J.A.’s bank accounts that Daugherty controlled. According to the Information, Daugherty caused the Department of Labor to issue more than $27,000 in fraudulent benefits after L.J.A.’s death.
On September 27, 2012, Daugherty pled guilty to the wire fraud count. Daugherty admitted that after L.J.A.’s death, she closed out his case at DHS, but did not notify the Department of Labor of his death. She admitted that in July 2010, months after L.J.A.’s death, she used DHS letterhead to write a letter asking the Department of Labor to mail L.J.A.’s benefits to her at the DHS office. She also admitted that she submitted to the Department of Labor a forged state-court order that appeared to continue DHS guardianship well after L.J.A.’s death. She admitted that in December 2010, she set up and controlled a bank account in L.J.A.’s name to deposit the federal benefits issued in his name. Finally, at the plea hearing, she admitted to using for her personal benefit money that came into L.J.A.’s accounts after his death.
At yesterday’s sentencing, United States District Judge Joe Heaton sentenced Daugherty to 37 months in federal prison, followed by three years of supervised release. Daugherty was ordered to pay restitution to the United States Department of Labor in the amount of $5,451.99. She was also ordered to pay $1,985 in restitution for theft from an unrelated victim under DHS guardianship. Daugherty must report to federal prison on February 4, 2013.
This case is the result of an investigation conducted by the United States Department of Labor – Office of Inspector General and the Oklahoma Department of Human Services – Office of Inspector General. The case was prosecuted by Assistant United States Attorney Chris M. Stephens.