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LACOMBE WOMAN SENTENCED TO PRISON TIME IN CONNECTION WITH HURRICANE KATRINA FRAUD

FOR IMMEDIATE RELEASE
September 23, 2010

DENISE STOBAUGH, a resident of Lacombe, Louisiana, was sentenced yesterday in federal court in front of U.S. District Judge Sarah S. Vance to twelve months and one day in prison for two felony counts of theft of government funds in connection with a Small Business Administration disaster loan and a Louisiana Road Home Program grant she obtained in the aftermath of Hurricane Katrina, announced U. S. Attorney Jim Letten. In addition, Judge Vance ordered the defendant to pay restitution in the amount of $150,000 as well as serve three (3) years of supervised release during which time the defendant will be under federal supervision and risks additional imprisonment should she violate any terms of the release.

According to court documents, in 2005, the defendant, DENISE STOBAUGH, along with her co-defendant and husband, KEITH STOBAUGH, applied for a low interest disaster relief loan from the U. S. Small Business Administration based on damage purportedly suffered by their home as a result of Hurricane Katrina. Based on the application and representations about the damage, the SBA granted the defendants a low interest disaster loan of $38,800 in governmental funds.

Additionally, court documents reflect that, in 2006, the defendant, DENISE STOBAUGH, applied for financial assistance from the Louisiana Road Home Program for the same purported damage their house suffered as a result of Hurricane Katrina. Based upon her application and representations, the LRHP approved an award of $150,000 in funds belonging to the United States Department of Housing and Urban Development, who administered the program. In reality, according to court documents, the home owned by DENISE and KEITH STOBAUGH suffered very minimal damage from Hurricane Katrina.

On December 17, 2009, both defendants pled guilty to the crimes charged. In the case of DENISE STOBAUGH, she pled guilty to two counts of theft of government funds in connection with the SBA loan and the LRHP grant; in the case of KEITH STOBAUGH, he pled guilty to one count of misprision of a felony in connection with the SBA loan. Her co-defendant, KEITH STOBAUGH, was sentenced on May 12, 2010, in front of U.S. District Judge Sarah Vance, to three (3) years probation, 100 hours of community service, and a $1,500 fine.

The case was investigated by agents from the United States Small Business Administration, Office of Inspector General, and the United States Department of Housing and Urban Development, Office of the Inspector General. The case was being prosecuted by Assistant U. S. Attorney Matt Chester.

 

 

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